Leasehold issue. Gagging for advice. Section 20. Please read.

reallynicebloke

In March 2007, a friend and I bought a flat together. It is an ex-council property and is now maintained by a private organisation. In fact, at around the time we bought the flat, the council were transferring their responsibilities of dealing with such properties over to the newly formed private enterprise. After we put in the offer, the standard legal checks were done and our solicitors came back to us declaring that there was an outstanding bill of about £500 owing due to some guttering works. I told our solicitors to pass on to the then-owners that until the bill was paid, we would not be going ahead with the sale. In the end, the owners (reluctantly) agreed to cover the costs and the situation was resolved. The following month, we moved into the property.
About fifteen months later, we had a letter through from the housing organisation. It stated that “window installation work” was due to commence shortly on the flats, and they would soon provide my flatmate and I with an estimation of our percentage of the charges. I contacted the owners and queried this, as I had no idea our windows were due to be replaced (I rather liked my windows and, half way through a recession, I didn’t intend to pay for new ones). I was abruptly told that under section 20 of the Landlord and Tenants Act, I was obliged to pay towards these new windows and their installation was due to be carried out in the next three months.
I went to a number of meetings with the owners and also wrote a series of letters. The general line that they played was “Look, when you purchased the property in March 2007, the Section 20 notice had long been implemented. Your solicitors should have passed this information onto you. If they didn’t, then speak to them about this. You would have been told of the planned ‘major works’ to the flat and if you didn’t like it, you shouldn’t have put in an offer on the place.”
Ok. And this is where things got interesting. I contacted my legal people who dug out my file, and, in fact, they send me a copy confirming that the housing organisation had NEVER actually declared the planned works at all. I even have a copy of their response to the question querying about major works due to be carried out. The answer, in pen, is ‘none.’ Oh dear. So, we had no way whatsoever of knowing when we purchased the property in March 2007 that this huge bill was hanging over it, even though plans for the installation of the windows had begun just over a year earlier. When I went back to the organisation and said “actually, we have the paperwork here stating you declared absolutely nothing about section 20,” they changed their ‘tactic’ and said, “Well, the then-owners of the flat should have told you about it.”
Er, no. Because a) the then-owners would have likely denied all knowledge anyway and b) the then-owners weren’t asking for the work to be carried out.
I started talking to legal people who were very sympathetic and said there was undoubtedly a case. They stated we would have to go to court citing misrepresentation, and provide evidence that if we had known about the £3k bill attached to the property in March 2007, we likely wouldn’t have bought it. However, if you go back to paragraph one at the top of this fine piece of writing of mine, you will see that, well, we have some evidence. If we weren’t prepared to pay a £500 guttering bill, why would we have agreed to pay a £3k one for windows?
Comments and ideas please.

Fire_Fox

I don't see how your guttering is evidence as that was a liability for works already completed - you were paying for the new guttering in the purchase price, obviously you wouldn't want to pay for it twice by settling the outstanding bill. Furthermore you might have been pleased the windows were to be done in the near future as they could have been in very poor condition or not of your preferred style.

My advice is to check that your legal advisors are specialists in leasehold properties, and check that you do need to pursue this in court rather than at a Leasehold Valuation Tribunal. Service charge disputes are commonly dealt with by an LVT and it's common for small claims actions to be referred across, which wastes both time and money. It's perfectly possibly to represent yourself at an LVT, they are much more layman-friendly than a court.

You *may* find that you are able to limit your liability to £250 on the basis of the consultation was not carried out properly - the error in declaring the proposed works during the conveyancing:

"While the principal purpose of the consultation process is to seek the leaseholders' views on the landlord's proposals, the effect of the provisions is to limit the landlord's ability to recover if he does not comply. If the landlord fails to carry out the full consultation procedures, in the correct manner, he is not able to collect or recover service charges above the level of the statutory minimum amounts, that is, £100 per leaseholder per year in respect of a long-term contract, or £250 per leaseholder for works to the building. The landlord will have to cover the loss himself, which may have implications for the Housing Revenue Account and, possibly, the District Auditor."

http://www.lease-advice.org/publications/
(This website is huge and covers most eventualities so read inside and out, they also offer a free telephone advice service)

blckbrd

Until you sign on the dotted line and become the leaseholder for a property, you have no rights under the legislation governing service charges/s20 consultation.

Your claim for misrepresentation would be against the seller as the LL only has a responsibility to provide information to the leaseholder in the pre-sale enquiries. The seller would (should) have been aware of the proposed works and should have passed on the information.

If there was a live s20, the info provided was clearly incorrect so the person who sold to you would need to try and claim against the LL (even though they should themselves have disclosed) in response to your claim against them.

It sounds like a Notice of Intention (NoI) was served - either on a framework contract which sets up a panel of construcors to carry out a progamme of works or for an individual contract where a contractor may be nominated. In each case, the NoI can be served years prior to the Notice of Estimates or the works themselves.

Look at the Lease website as FireFox suggests for information on which schedule has been used for the consultation so you can check for correctness.

reallynicebloke

Ok guys.

Have had two further conversations with the property owners/organisation that own the building today. Very hard to keep my temper.

Here is their argument:-

"The "notice of intention" was given in March 2006. The then-owners were notified in writing (which I have a copy of.) Then, in March/April 2008 (when I lived at the property), the section 20 thingy was started which you were also notified of. The tennants should have told you about the "notice of intention" when you showed interest in purchasing the property in March 2007. If they didn't, take it up with them. Whilst your solicitors sent us questions asking if works were planned on the property, we said no as we weren't yet sure if the notice of intention would cover your flat - We were planning window installation work across a very large area."

In my view, the idiot-organisation - who are so f

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g rude, it's unbelievable - are very much to blame and I don't care what they say - Their 'no' response to my question was an error, plain and simple. The notice of intention should have been enough to indicate in their responses that "window installation work may well go ahead." Their simple 'No' response instead indicated something that no work whatsoever planned (when, in fact, it was) so their answer as a) wrong and b) misleading. What legal justification can I use to instead take action against the previous tennants for non-declatation of the works? They didn't even mention it, even verbally or in writing. If they had, there's NO WAY I'd have bought the property. Who would??!

It's misrepresentation all the way, but I don't know where to go with this. Any ideas please?! C'mon. Have chatted with a few solicitors today but they were all "This isn't really an area we work in." They were sympathetic, however, and the Leasehold Tribunal Service were pretty much saying "Take 'em to court."

Doozergirl

The Leasehold Advisory Service are your friends here, however you need to lay down clearly the timeframe of all events as at the moment, your story is very convoluted.

It is most definitely an issue that the managing agent did not declare intended works. THe whole reason for writing to the freeholders and their agents is because you cannot necessairly trust what the current leaseholder is saying - they have a vested interest in selling and it could well be the cost of works that causes them to want to move!

It is essential that the managing agents follow due process for major works - as you've been told, the process must be followed to the letter - look at the LAS website regarding major works to try and establish whether that process has been followed (disregarding the 'no' answer for a bit) - if it hasn't then you are only liable for the first £250 of the work iirc.

I'm probably not much help but you really are trying to find the right hole in their story and a decent solicitor or somebody clever at the LAS to find you the right one.

reallynicebloke

I'm not actually trying to find a hole in the story - I'm merely trying to accertain the legal implications of nobody telling me that a notice of intention was served on the property (eventually leading to section 20) when I had the legal checks carried out on the flat. Who's liable and under what law can I do them? But thanks for the above response guys...Any more ideas?

tomstickland

Speak to lease-advice.org
If the consultation exercise has not been properly conducted then you are only liable to £250 of the costs.
There is a Leasehold Valuation Tribunal service that can decide on this sort of issue.

I'm struggling to make sense of what actually happened. It would be good if you could write a more clear time line of what happened.

Owners in 2006 did receive a notice

The tennants should have told you about the "notice of intention" when you showed interest in purchasing the property in March 2007

What have the tenants got to do with it? The leaseholders were responsible for informing you.

Whilst your solicitors sent us questions asking if works were planned on the property, we said no as

Well, that's their fault then. If your solicitor asked the question and the management company said no (because they weren't sure) and you have that in writing, then you were told that no work was being done.

Fire_Fox

reallynicebloke wrote: »

Have had two further conversations with the property owners/organisation that own the building today. Very hard to keep my temper.

It's misrepresentation all the way, but I don't know where to go with this. Any ideas please?! C'mon. Have chatted with a few solicitors today but they were all "This isn't really an area we work in." They were sympathetic, however, and the Leasehold Tribunal Service were pretty much saying "Take 'em to court."

I'm not actually trying to find a hole in the story - I'm merely trying to accertain the legal implications of nobody telling me that a notice of intention was served on the property (eventually leading to section 20) when I had the legal checks carried out on the flat. Who's liable and under what law can I do them? But thanks for the above response guys...Any more ideas?

Why do you need more ideas? It doesn't yet appear you have exhausted the avenues we have suggested. Why are you dealing with the freeholder/ management company by phone - you need a paper trail? Have you bothered to read the LEASE website? Have you spoken to the LEASE telephone advice line? Have you located a solicitor that does specialise in leasehold disputes?

Akom

I really feel your pain on this one.

When i bought my flat we were told that works were due in a couple of years time estimated @ £5000. Not a real show stopper given the notice however the works have now been carried out and we have been hit with a bill of £27k and the k's not a mistake. Some of my neighbours have been hit with £49k on a 2 bed flat worth £150k.

I wont bore you with all the details but there is major up roar as you can imagine. We've been in the local paper and the news and also have Eric Pickles on side as well as all the local councillors. This is going to be a very long and bloody battle.

Only positive is it has brought the community together.

Good luck with your fight.

reallynicebloke

F

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g hell.

Give me an outline of the details.

Who's the organisation and why such massive bills?

blckbrd

What Akom has said is sadly not unusual but is far the norm... funding like New Deal and Decent Homes monies mean that every nook and cranny of a block or estate can be repaired/maintained/renewed/improved and the idea is to do it all in one go to save money

Horrendous doesn't cover it.