We have had the wonderful opportunity of speaking to Russell Tillison, the Head of Legal at FirstPort. With a vast amount of experience, Russell gives valuable insight into what is sometimes perceived to be the ‘less glamorous’ residential property law sector. Russell’s passion for real estate and property law is evident, as he speaks on the UK’s Chancellor’s autumn statement, the challenges he faces in his role, the joys of working for UK’s largest residential property management company and how he manages his entire legal team.
How did you end up specialising as a real estate solicitor? What was the main motivation behind you specialising in property?
I come from a property family. My father is a chartered surveyor, my brother is a commercial agent and my wife is a property solicitor too; you could say that it is in my blood. The aspect of property that grabbed me most is the very and tangible nature of it. I love the fact I can see, touch, feel and personally associate with the subject.
Working for a property management company means that we get to work and interact directly with our customers, meaning we are closer to residents than other parts of the industry. We constantly put ourselves in the customers’ shoes to make sure we are delivering the best service and the relentless focus on customer experience is something I really enjoy.
What does a typical day as Head of Legal at FirstPort encounter? Was there anything that surprised you when you started working there?
It’s a real cliché but there is no typical day for me at FirstPort, which is why I love it so much. My relatively sizeable team (10 lawyers plus support staff) and we pride ourselves on keeping as much work as possible in-house, which means I work on a range of areas in the business. This ethos means that one moment we can be advising on a thorny data protection issue and the next it’s a tricky lease interpretation matter. I feel very privileged to lead a team which wraps around every aspect of the business – from management to insurance, lettings, sales and more.
One of the best surprises when I joined FirstPort was the appetite in the business, from the CEO down, to embrace the legal team as a genuine partner. Through my place on the Executive Board I have direct exposure to all areas of the business, and the collaborative and inclusive ethos which governs it. This in turn means my team and I can provide considered and pragmatic counsel to the differing business areas, and this ensures there is a common approach running through the company.
What cases are you commonly faced with in residential property management? What can you advise to clients, to avoid unnecessary legal issues?
By far, the biggest challenge faced by the industry is a general naivety to the nuances of leasehold. Residential property has historically been perceived as the less glamorous ugly sister of commercial property, but in actual fact it has a considerably greater amount of technical black letter law around it. The industry has many facets to it but they all come with the same big pitfall; if you fail to do proper due diligence, it is likely it will end up costing you dearly.
This is true whether you’re talking about carrying out a proper review of service charge provisions in a residential lease (for which you need only look at the recent Supreme Court decision in Arnold v Britton, where property owners on the Gower Peninsular were left with leases that by the end of their term would require an annual charge of £1,000,000 to be paid by each owner); or at the other extreme, the granular detail that needs investigating as part of an acquisition of the huge ground rent portfolios that are traded by funds for hundreds of millions of pounds. This makes my job more challenging, but as we are a highly specialised team of property experts, we are confident that we understand the risks and the best ways to navigate them!
How did your prior experience at Barclays Bank prepare you for your Head of Legal role?
Being seconded by Dentons to Barclays Bank was a fantastic experience. At the time, I played a role in the Chief Operating Officers legal team as the sole UK based commercial real estate counsel. Whilst I was supporting both the domestic portfolio of branches and offices, I also had conduct of the international real estate deals for the various BPO centres and back office functions. One of the most important parts of the role was establishing a feel for the corporate risk appetite and then seeking to align all jurisdictions as closely as possible with the business objectives. This equipped me both with the skills needed to work for a multi-disciplinary business such as FirstPort, but also a broader understanding of business objectives and planning which serves me well on FirstPort’s Executive Board.
Chancellor Phillip Hammond sets out to publish a Housing White Paper to address housing problems; from your perspective, what do you think is the most important thing to address?
I do not envy the Chancellor one bit. There are so many areas that he could focus on, from the well-trodden discussions around leasehold reform, to championing the case for the use of commonhold as a genuine alternative tenure. To my mind however, his main focus needs to be how to address the crippling housing supply issue and get the UK’s house builders to hit and even exceed their annual targets.
There also needs to be a broader conversation about different housing options. FirstPort has extensive experience in retirement property through our FirstPort Retirement arm as well as Retirement Homesearch, the UK’s number one retirement property specialist. This year we released a report into retirement property with the think-tank, the International Longevity Centre (ILC-UK), which highlighted that there will be 10 million people in the UK aged 65 or over in ten years, yet only 160,000 retirement properties are predicted to be built in that time. Just building homes for people starting on the ladder will not be enough – more could be done at all ends of the market.
Continuing from The Chancellor’s autumn statement, the UK government’s recent stamp duty reform (SDLT) has led to a sharp fall in property sales; how has this affected your work and clients and what do you hope the Chancellor’s alternative approach will result in?
I sometimes wonder whether the SDLT changes are a convenient scapegoat here. It’s undeniable that we have a seen a drop off in the volume of property transactions; however, lack of supply coupled with the uncertainty facing the UK economy in the wake of the Brexit vote has created the perfect storm.
I’d love to see the market flooded with new properties and efforts from the Chancellor to get construction of new homes moving again at a decent pace. It’s also promising to see we’re beginning to see more honest conversations about alternative options to ownership. At FirstPort we understand that the rise of build-to-rent and the private rented sector (PRS) means there are different options out there. We see our customers enjoying some of the benefits alternatives offer, such as apartment blocks or developments with high-quality amenities or in-house maintenance teams, so it’s encouraging to see the government move away from a sole focus on home ownership as the only answer.
How differently do you have to face cases involving national clients, in comparison to regional? What different challenges do they pose?
We are lucky at FirstPort to manage properties for some of the UK’s largest property investment funds and house builders. But we equally enjoy working with ‘Resident Management Companies’ at a more local level. We tend to find the funds are looking for lots of market intelligence and the use of ‘big data’ whereas the more local Resident Management Companies require a more hands on, relationship based approach.
Is there anything else you would like to add?
I would like to give special mention to one of FirstPort’s most recent initiatives which we are particularly proud of. Six months ago, we became the first company to officially partner with Barclays to offer their Digital Eagles mentoring programme. We seconded a number of our staff to train them up as ‘FirstPort Digital Eagles’ to help spread digital awareness and skills both to their colleagues, but also the residents on our developments. As you can imagine, partnering with an iconic business such as Barclays and using their product and a spinoff of their branding involved complex legal negotiation, but the outcome has been a free service to our residents and staff that we’re immensely proud of.
