Exorbitant council charges for major works on leasehold properties?

ET1976

I am considering buying the freehold of my building from the council (with the other leaseholder - just 2 maisonettes in it). However, the only benefit I can see to doing this is to take control of the maintenance ourselves rather than being beholden to whatever the council decides to do.

I have so often read about/heard of the huge charges councils make to leaseholders for major works, but I'm struggling to see whether these are justified, or whether councils really are ripping people off (as the general feeling seems to be). Surely they would not be able to keep doing this, with the LVT system available to leaseholders to challenge unnecessary works/costs?

We are currently having our roof replaced (which is costing less than 3.5k each so a fair amount I think), and short of rebuilding the house - which seems pretty unlikely given that it's in the middle of a terrace of 4 (and attached to 2 freehold houses) - I can't see what other major works could be done, which means the hassle of owning the freehold would seem to outweigh the benefit.

Does anyone have any opinions/facts/experience of this issue?

Thanks.

Fire_Fox

As the veteran of a three year dispute with our (now thankfully ex) private sector management company, I tend to read and reply to a lot of leasehold posts on this board. IMO many leaseholders don't ever bother to find out what the rights and responsibilities of a leaseholder are, never mind the same for the freeholder before they throw their toys out of the pram! There is an awful lot of legislation for a private sector freeholder to comply with, never mind the additional rules and regulations in the public sector. It's very easy for people who have bought a discounted council property under right to buy - having previously been mollycoddled by a landlord who won't evict and will repair - to complain that they are being ripped off.

ET1976

So you reckon we'd be better off staying as leaseholders?

g_attrill

Previous threads have brought up general maintenance, eg. repointing, painting, fascias/soffits, windows, communal electrics/grounds/fences/driveways, tv/satellite etc. (many might not apply to you). Some could be argued as "essential" even though they might be cosmetic or the sort of thing that other freeholders might think could be left for 10/20 years or could be arranged at a much lower price. Eg. a council might put it to three large maintenance companies for tender, but they might be twice the price (or more) than a local tradesman.

Fire_Fox

ET1976 wrote: »

So you reckon we'd be better off staying as leaseholders?

I think you should formally ask the council what major works they have planned for the next five years, I also think you should ask local estate agents what the difference in value/ saleability would be with share of freehold over the council as superior landlord. Finally I think you should discuss with the other leaseholder how much time you are each willing to invest in researching the legislation and managing the property. Have you both read the LEASE website inside out and back to front?

ET1976

Regarding the general maintenance - there is almost nothing to do as there is nothing communal at the property apart from the walls, roof and guttering/drainpipes. In the 9 years I have owned it they have painted the outside once and replace some guttering, which was very reasonably priced (in fact, I have had refunds from my annual £70 maintenance charge because they haven't spent it). So I'm not really bothered about the small stuff, even if they were to overcharge.

No major works planned for the next five years. Surely that could change at any time though? Plus I plan to keep the property for at least another 15 years.

I don't think there will be much effect on saleability either way - it's in an extremely sought-after area where buyers are queing up, even in this 'climate'. Looking at other examples (although there have been very few with share of freehold on the market), I don't think it would have much effect on value either.

Regarding the legislation and management - that is what puts me off (I certainly haven't read the website back to front, and I'm the one driving this, not my neighbour). The threat of tens of thousands of pounds in maintenance charges would be the only thing that would outweigh that disadvantage.

timmyt

if you will own the freehold no diff than that of a terraced property, then depedning on the price it is clearly more attractive on a sale. always. but how much will it cost you

you can then simply do no maintenace except when it really needs doing

there is a chance the freehold may come with covenants where you still have to contribute to some specific communal payments if you pay them now......hard to say without sight of the papers.

as a starting point a freehold is always better tha a leasehold...never buy leasehold if you can afford not to...you do not own your own building and you pay to repair someone elses!

dander

The thing with maintenance charges is they will vary a lot with the type of building and facilities provided. Lift maintenance is hugely expensive, if your block has lifts then you are possibly going to face a bill for replacing all the lifts at some point. Some council blocks are listed, so if they decide to work then it may have to be done by specialists and to different standards and cost more. All leaseholders no matter where they are in the block will have to pay a share, so if it's a tall block and work has to be done involving scaffolding, you'll pay for that even if you live on the ground floor. Some council estates offer communal heating etc. You need to think through all the things that are shared on your estate and figure out what might come up.

You talk about a small building - are you just a single small building where everything has been sold off, or are you part of a bigger estate? A lot of the work the council has been doing over recent years is about bringing council homes up to standard - "decent homes". If none of the properties in your block are actually concil homes anymore, then I'd have thought you'd be at the bottom of the list for improvements anyway.

ET1976

It's a small building. As I say, nothing communal at all, apart from the unavoidable roof and walls.

It's a terrace of 4 houses, 3 of them are still in their original, uncoverted state and are freehold (I guess the council must have sold these off at some point along with the freeholds), and mine is one of the inner houses. All the 5 properties in the terrace are privately owned.

I suppose what concerns me, having had the experience of being forced to have the roof replaced even though there is nothing wrong with it, is that the council can just march in at any time and say the walls need replacing or something equally ridiculous, as it seems that they are able to enforce major works without having a shred of physical evidence that they need doing.

Edited to add: the roof replacement is part of the Decent Homes work, even though there is no social housing whatsoever anywhere attached to or nearby my property.

Fire_Fox

ET1976 wrote: »

I suppose what concerns me, having had the experience of being forced to have the roof replaced even though there is nothing wrong with it, is that the council can just march in at any time and say the walls need replacing or something equally ridiculous, as it seems that they are able to enforce major works without having a shred of physical evidence that they need doing.

Edited to add: the roof replacement is part of the Decent Homes work, even though there is no social housing whatsoever anywhere attached to or nearby my property.

It doesn't matter that there is no social housing, under a long lease the council are your (superior) landlord, and much of the same legislation applies as it would with someone on an AST or protected tenancy. You shouldn't have been 'forced' to have the roof replaced you should have been consulted, at least two sets of documents sent to you. If the law was not complied with only £250 is recoverable: http://www.lease-advice.org/publications/documents/document.asp?item=20

dander

I suppose one of the disadvantages of having the council as leaseholder is that they have to arrange budgets and contracts in advance, so they're not set up to react if a major problem with a roof occurs - therefore they are going to try to pre-empt trouble and do things like this before it might be strictly neccessary. However, on the plus side, they do always have access to money to do these things, and can go ahead with the work and claim payments from leaseholders later.

If, however, you chose to form and run a management company yourself, you have to rely much more on leaseholders paying up. Some management companies ask leaseholders to contribute to a major works savings account so there's always a fund for repairs, some just wait until there's a problem and ask everyone to contribute, but of course you always run the risk of troublesome leaseholders refusing to pay up - arguing about how much etc etc.

There's pluses and minuses on both sides I think, it's just which minuses are more minus for you!