Is buying this flat a crazy risk?

Fire_Fox

tommygirl3 wrote: »

- Service charges increased from £1.2k pa to £1.7k pa from my first year living there. They blamed it on having to fix the lifts and employing another porter. I've heard from the local EA that the service charges for my flat is now nearer £3k a year.

- The remaining 60% of council tenants did not pay service charge or major works. The council's party line is that they apportion the charge based on the flat size. In reality, they stretch the total amount amongst leaseholders.

- Don't depend on the estimated major works bill. They always go over. I sold my flat once I heard rumours the council was going to re-do the roof, replace lifts, CCTVs, landscape the communal garden, replace windows, etc. Estimated bill was around £10k for my flat. Revised estimate is now up to around £22k and rising. Out of curiosity, I've been following the Residents' Association's campaign to enquire why the bill has risen and they suggested the council of giving the job to their mates and didn't invite other companies for competitive tender.

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There are laws against doing what you suggest the council did! Leaseholders have the right to request an annual statement of service charge expenditure and this must be certified by an accountant. Leaseholders also have the right to inspect supporting documentation such as invoices. Are you seriously suggesting a qualified accountant fraudulently signed off the expenditure?? :eek:

Councils and housing associations do not have to invite competitive tender, they usually use their approved contractors. I suggest the residents' association does not understand how incredibly expensive it is to repair and replace lifts, nor what rights they have as leaseholders, nor what restrictions there are on lodging objections to major works with a social superior landlord.

There is no requirement for any freeholder to minimise costs in the service charges, they simply must be "reasonable" and "reasonably incurred" and work must be to a "reasonable standard". Your friends would do best to dispute whether the works are necessary by appointing their own surveyor.
http://www.lease-advice.org/publications/

AliceBanned

Thanks FireFox. The link is very useful. It can be a bit of a minefield but I guess any leaseholder is in a similar position so I don't understand why many council tenants (I think this has happened a lot in London) appear to have been "stung". I am a bit confused about having just an "estimate" of major repairs though. I know they have to put jobs out to tender but I'm wondering whether this is still a loophole. Will look into it in more detail. Thanks