"Unreasonable" service charge and repair bills & lack of adequate sinking fund

andyjjj

Please help!

I am a leaseholder in a block of 38 flats (10 are leasehold) and have just been informed that I will have to pay in the region of £8000-£9000 to contribute to building repairs that have just taken place.

The housing association has a sinking fund but over the 30 years that the property has been collecting this, only £27k is in that fund, and there are 38 flats. So by my calculations only £710 has been collected per flat over the 30 years, so there is a massive shortfall for the work that has just taken place.

We were sent letters about the works but all those letters said was how much it was going to cost and that we could make 'written observations'. It was never explained that the leaseholders would be liable to pay for these costs and even in a meeting beforehand with them and the resident this was not even spoken of.

Out of the 38 flats, 10 are leasehold and the other 28 are owned by the Housing Association being rented out.

I have only lived at the property for 5 years and upon purchasing there was no warning that major works would need to take place and that I would be liable for footing repair costs of the last 30 years.

I believe this is an unfair and "unreasonable" charge, and that the Housing Association has been negligent and has grossly mis-managed this property by not assessing it's needs for when repairs would be needed.

I also believe that I should only be liable for 5 years worth of repairs since I have only lived there for that long and that previous wear and tear and mis-management of the sinking fund should not be laid at my door.

Emmzi

Pointing out the risks of this and investigating were the job of your solicitor. You should review the documents from the purchase and discuss with him/her what investigations were maade at the time of purchase. The HA has not been negligent; you solicitor may have been; or you may have forgotten something you were told prior to purchase.

bitsandpieces

You should also have seen the accounts before you purchased - so should have known about the small amount of money in the sinking fund? Was the need for repairs known about 5 years ago?

There are procedures which the HA need to have gone through in order to be able to charge leaseholders for work. I would be surprised if they were so incompetent that they messed this up - so I imagine that you will have to pay - though it's worth checking. Others on here know more about this type of thing, though, so sure others will be along to advise.

Ulfar

What are the doing that costs £369 000 in repairs ?

andyjjj

They have replaced the roof, which only needed fixing. And they have replaced all the single-glazed windows with double - this was also unnecessary. And they have refurbished the lift (partly)

On top of that I pay £1250 pa for the service charge.

There was no warning upon purchase that these works were coming....

Also the costs for the windows escalated due to the contractor taking 5 months to do it when it was only supposed to be a month.

Ulfar

You need to read up on the steps that should have been taken.

If the HA didn't follow the procedures it is sometimes leads to them being unable to charge you the money.

Roof and Windows, this still seems like a large amount of money. As for escalating costs for windows surely it is the contractors problem if they took longer, they should have honoured their quote.

andyjjj

Ulfar wrote: »

You need to read up on the steps that should have been taken.

If the HA didn't follow the procedures it is sometimes leads to them being unable to charge you the money.

Roof and Windows, this still seems like a large amount of money. As for escalating costs for windows surely it is the contractors problem if they took longer, they should have honoured their quote.

Well they did send out letters saying what they were doing and how much in total it would cost, but these letters did not at any point state that we would have to pay for them and there was no estimated cost about how much I'd have to pay. There was also a residents meeting beforehand and they didn't say anything about costs at all in those, however the meeting that just happened was them informing us that we'd have to pay - I would have thought this should have been discussed beforehand.

They rent out the other 28 flats and have total control over how much goes into the sinking fund. They admitted that they had no idea of when repairs/work would have needed to be done and had no assessment of this. I think they expected the building to last forever.

I surely must have some grounds for neglect/mis-management?

Fire_Fox

andyjjj wrote: »

I am a leaseholder in a block of 38 flats (10 are leasehold) and have just been informed that I will have to pay in the region of £8000-£9000 to contribute to building repairs that have just taken place.

The housing association has a sinking fund but over the 30 years that the property has been collecting this, only £27k is in that fund, and there are 38 flats. So by my calculations only £710 has been collected per flat over the 30 years, so there is a massive shortfall for the work that has just taken place.

We were sent letters about the works but all those letters said was how much it was going to cost and that we could make 'written observations'. It was never explained that the leaseholders would be liable to pay for these costs and even in a meeting beforehand with them and the resident this was not even spoken of.

Out of the 38 flats, 10 are leasehold and the other 28 are owned by the Housing Association being rented out.

I believe this is an unfair and "unreasonable" charge, and that the Housing Association has been negligent and has grossly mis-managed this property by not assessing it's needs for when repairs would be needed.

Lots of questions ....

Why didn't you know how much was in the sinking fund, was this not explained to you by your conveyancing solicitor? Have you never asked for or received a breakdown of what your service charges are spent on (including sinking fund)? Who did you think was going to pay for the repairs if not the leaseholders plus the housing association (for the rented units)? What evidence do you have that the roof and windows did not need replacing? Do you know anything about the 'better homes' strategy? Did you have a full structural survey carried out when you purchased? Did you submit any representations during the consultation process? Do you have a copy of your long lease and have your read it?

andyjjj wrote: »

They have replaced the roof, which only needed fixing. And they have replaced all the single-glazed windows with double - this was also unnecessary. And they have refurbished the lift (partly). Also the costs for the windows escalated due to the contractor taking 5 months to do it when it was only supposed to be a month.

On top of that I pay £1250 pa for the service charge.

There wad no warning upon purchase that these works were iminent.

I have only lived at the property for 5 years and upon purchasing there was no warning that major works would need to take place and that I would be liable for footing repair costs of the last 30 years.

I also believe that I should only be liable for 5 years worth of repairs since I have only lived there for that long and that previous wear and tear and mis-management of the sinking fund should not be laid at my door.

Your solicitor will have asked the housing association what works were planned for the next five years. Firstly you appear to be out of that timeframe, and secondly it is not unreasonable for major works to need doing sooner than initially expected as the property deteriorates. Furthermore there have been changes in legislation over that time which means public sector landlord are obliged to undertake energy saving and health and safety improvements to their properties. When you take on a leasehold property you take on all the rights and responsibilities, you cannot limit yourself to five years of deterioration!

You are throwing some big allegations out there, I suggest you refrain as these might be construed as libellous or slanderous depending on how your allegations are communicated. It doesn't appear to me that you have understood the process of service charges and major works, hence your statements are without foundation.

This website explains your rights and responsibilities as a leaseholder, it should be read alongside your long lease. Your long lease sets out what repairs and maintenance you are responsible for contributing to and at what level, including the sinking fund. It is not necessary for any other documentation to spell out your liability.
http://www.lease-advice.org/publications/

GDB2222

There's a lot of single glazing being replaced with double because of the better homes initiative. Were the old windows actually defective?

It's a bit late to complain, now the work's been done, but you can take them to the LVT.

Fire_Fox

GDB2222 wrote: »

It's a bit late to complain, now the work's been done, but you can take them to the LVT.

On what grounds, surely only if the works are not of a "reasonable standard"?

andyjjj

Seems I have nothing to go on them.

Thanks for the links Fire Fox.

The only thing I can see is that for the Windows they only obtained 1 quote, although I think they tried to get others but did not succeed.

On that site it says
"The paragraph b statement -The landlord then issues a statement (free of charge) setting out the estimated cost from at least two of the estimates and a summary of the observations received and his responses to them... "

We definitely only received 1 estimate. although I imagine we would have had to pipe up at that time...

Didn't know of the BetterHomes initiative and they've never stated it was done for this, so I can't see that it was a legal requirement.