Funding for flat block repairs

Nobody gives loans for £200k without serious collateral - basically I'd imagine you'd have to mortgage the freehold which is only going to increase the legal costs and cause problems down the road when some people will be compromised by others refusing to pay. You'll also be paying interest, probably quite high if the properties are worth less due to bad roof (by definition), so it makes it harder for a lender to get their money out again if there's a problem.

I'd say you have a cashflow problem, not a cash problem. It may be cheaper to do all the rooves at once BUT you cannot afford to, so will have to do them incrementally. Raise the sinking fund contribution to a viable rate, and get started once there's enough for the first tranche of work. It's the only option you really have.

There is another, far worse, option - getting a management company involved. They'll take far longer and charge far higher fees than a few volunteers, and you can be sure they'll take a kickback built into the builders fees too. Maybe if you present this as an either/or option to people (raise sinking fund contributions vs getting rinsed by private management company) they'll see you're offering good value.

BTW this is why I am bad at sharing and like benevolent dictatorships as a model - you've got the worst ever kind of 'splitting the restaurant bill' scenario here, where your own financial future and assets are tied into the private interests of other (often absent/uncaring) parties.

Gibsy wrote: »

Hi

I'm a director on the management committee for a group of 28 flats in 7 blocks. The flats date back to 1910 and the original roof has outlived its useful life and needs to be replaced. We've been quoted approx £200,000 to fully reslate the roof and we are now looking for funding. There is no enthusiasm amongst owners for a £7000 bill per flat to cover the cost and so we need to seek a loan or grant for the work. Myself and the other directors are simply volunteers with no experience in this area.

Is anyone able to advise on good sources of funding for this sprt of project? We hold our bank account with Coop bank and will of course start there but other suggestions would be welcome.

Many thanks

You need urgent professional advice on the whole scheme. If the work needs doing then the freeholders have to pay. AFAIK it is their responsibility to raise the finance individually.

Get everyone to take out a £7,000 unsecured loan over 5 years, around £130 a month.

Much more better way of financing the works I thunk.

The House Buying/Renting etc. board might be a better place to ask about this now. What exactly do the leases say about major works:

"It is important to understand that the landlord's power to levy a service charge and a leaseholder's obligation to pay it are governed by the provisions of the lease. The lease is a contract between the leaseholder and the landlord and there is no obligation to pay anything other than what is provided for in the lease.

The lease may contain specific terms obliging the landlord to carry out certain works or provide certain services and, if a service charge is to be payable, the lease must contain a power for the landlord to recover the cost of those works or services from the leaseholder. It must specify whether the charge is recoverable in advance or in arrears of the provision of works or services, and whether it is to be collected on a regular basis, perhaps annually or on a specified quarter-day, or whether it is to be levied as costs arise. The lease may be very specific in its wording, setting out quite precisely the works or services to be chargeable. Alternatively, the clauses may be very general, simply referring to costs of the repair and maintenance of the structure of building.

It can generally be assumed that a service charge will be payable and will cover the repair and maintenance of the fabric of the building and the fittings, the lift or the boilers etc, as well as cleaning, lighting and maintenance of common areas. Other obligations depend on the scope of services provided. In some cases this is done simply by referring to the landlord's costs in meeting his obligations, as set out in one of the schedules to the lease."

http://www.lease-advice.org/publications/documents/document.asp?item=14