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

Fire_Fox

If you are going to carry on jumping to conclusions then you probably won't have anything to go on!

andyjjj

In the letter they send they also did not detail any of the caveats that are required to be clear and transparent about the works, such as what is shown in appendix 4 on:
www lease-advice.org/publications/documents/document.asp?item=19

"Section 20 of the Landlord and Tenant Act 1985 (as amended) (the 1985 Act') provides that a landlord (as defined by Section 30 of the 1985 Act) must consult leaseholders who are required under the terms of their leases to contribute (by payment of service charges) to costs incurred under qualifying works, where the contribution of any one leaseholder will exceed £250. 'Qualifying works' are defined by Section 20ZA of the 1985 Act."

Fire_Fox

You are reading the wrong advice booklet, you need to be reading the one below "Section 20 Consultation for Council and other public sector landlords". Also read 'Service charges and other issues' and 'Application to the LVT' as well. None of this is any use without having also read your long lease, which is the contract you signed up to when taking on a leasehold property.

As you haven't bothered to answer any of my questions, it's very difficult to know whether your landlord (or indeed conveyancing solicitor) has been clear and transparent, but AFAIK that does not mean they have to baby you through the process.

GDB2222

Fire_Fox wrote: »

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

You'd have to look at the lease, but if the lease talks about repairs rather than improvements there may be a case. Lots of single glazed windows in perfectly good condition are being ripped out at the moment because of new government standards for social housing.

The trouble is that it's not terribly helpful to make this point at this stage, after the work's been done. The tribunal is not going to be impressed with some who sits back, waits for the work to be done, and only then raises these issues.

PlutoinCapricorn

Surely the public sector is not permitted to operate a sink fund, so the OP must be in the private sector and Better Homes does not apply.

I would google "service charges"+"major works"+"sink fund" and look for helpful background information and cases. Citizens Advice may help too.

Fire_Fox

Citizen's Advice Bureau were a pointless waste of space when I contacted them about a service charge dispute, they just gave me a list of solicitors that do legal aid none of who specialised in the correct area of law! Much better chance of getting accurate advice from LEASE. There are LVT decisions on the LEASE website too.

andyjjj

Would the 'sinking fund' only be contributed to by the leaseholders?

i.e. in a block of 38 flats of which 28 are rented out by the Freeholder, does the Freeholder contribute the same amount to the sinking fund per flat as the leaseholders do?

Or is that down to the discretion of the Freeholder?

Fire_Fox

andyjjj wrote: »

Would the 'sinking fund' only be contributed to by the leaseholders?

i.e. in a block of 38 flats of which 28 are rented out by the Freeholder, does the Freeholder contribute the same amount to the sinking fund per flat as the leaseholders do?

Or is that down to the discretion of the Freeholder?

Service charges and major works are always shared as per your long lease which you really need to read alongside the LEASE website as already suggested. It's possible the sinking fund would only be contributed to by the leaseholders, BUT when the major works are carried out your money would only be used to pay the proportion specified in your long lease (not necessarily 1/38 might be more or less depending on the size of your unit) and the housing association would pay the remainder.

andyjjj

Fire_Fox wrote: »

Service charges and major works are always shared as per your long lease which you really need to read alongside the LEASE website as already suggested. It's possible the sinking fund would only be contributed to by the leaseholders, BUT when the major works are carried out your money would only be used to pay the proportion specified in your long lease (not necessarily 1/38 might be more or less depending on the size of your unit) and the housing association would pay the remainder.

Thanks. My solicitors currently have my long lease which they are returning to me so I will consult this asap.

Richard_Webster

Would the 'sinking fund' only be contributed to by the leaseholders?

The sinking fund would only be expected to pay that proportion of the cost of the works that related to the sold flats - the Council/HA would have to pay for the work to the flats that had not been sold.

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?

You should have had a survey when you bought and if there were parts of the building that needed replacing then the surveyor should have pointed that out.

Your solicitor should have pointed out that the lease gave the Council/HA the power to make improvements (e.g. double glazing) and charge you for them - assuming that it does. It is unfortunately the case that Council/HA blocks tend to have sudden increases in charges for major works in a way not found so much in private developments.

OP should also count himself lucky that there is any sinking fund. When they first drew up the wording for Right to Buy leases for selling flats in Southampton in the 1980s nobody thought to include a sinking fund provision in the first flat lease - it was all done in a terrible rush - the legislation was in force even before Council staff had seen a copy of it - I know because I used to work there! So in Southampton when there are major works to a block you get a bill for the whole of your proportion of the cost with no sinking find to soften the blow.