Leasehold flat: £1200 payment demand for exterior decoration.

tomstickland

I own a leasehold flat in a block of 9.
The management company charge approx £90 per month for admin. ie: gardening, cleaning, electricity for communal areas etc.

The windows had not been painted for a long time when I moved in. The paint was peeling and some rot had started. I painted my windows myself since they looked such a state.

Two weeks ago scaffolding appeared and on the following Monday workmen turned up and started rubbing down the paintwork. I had a good chat with them.

It took them two weeks to paint all of the window frames, the door frames and doors, the porch woodwork and the roof facia boards.


I've just been speaking to my neighbour who told me that:
-they painting company charged £18,000 for the work.
-They quoted for 6 weeks work.
-The management money reserves aren't enough to cover that
-Each flat owner will have to pay their share of the difference.

I've not had any official communication from the management company yet.
However, I want to prepare myself on this.
What happens if they land me with a £1K bill for this "extra work"?

Can I ask for detailed quote breakdown, their annual accounts etc? Can I contest the charges? Can I get them to challenge the painting company who have done the job in 1/3rd of the time?

I don't mind paying for what's needed, but when their charges are already high and it's in the lease contract that they keep the exterior in good condition I consider this work to be something that I'm already paying for.

cattie

Welcome to the world of management companies Tom. Pity you've been landed with this so soon after moving in.

I don't think you've got much chance of challenging the management company as the freeholder appoints them to manage the block on his behalf.

However, you've been around these boards long enough now to know that for proper advice regarding your rights as a leaseholder you need to contact these people http://www.lease-advice.org/newintro.htm

Doozergirl

I might be making it up as I go along as I haven't checked the legals and have just done as I've been told, but I believe they need to serve you notice under Section 20 of the Landlord and Tenant Act 1985 (or something similar) before they do anything.

You then have the right to make observations and I think before that period you are still entitled to obtain your own quotes which they have to consider. The quotes our management company got for the replacement of the communal windows (3 + 1 door) came to £11,000. One leaseholder managed to get a quote of £6100 without really trying and we know we could do it for nearer to £3,000. It's ridiculous.

Seems a bit odd that they've done it without prior payment if there isn't enough in the sinking fund. Our managing agent certainly won't do anything until they've been paid. They must trust you!

I should edit this tomorrow more detail as I've been drinking a little bit of Belle Epoque , but I know you're the type of guy to do his homework, so you'll probably know more than I do by tomorrow.

Can I also point you in the direction of my thread about the right to manage:
http://forums.moneysavingexpert.com/....html?t=271485

hazeyj

Any management company/agent cannot spend more than 3K without consulting either the leasehold directors of the management company first to seek approval or leaseholders directly. Are you sure this wasnt already in the budget? To be honest I cant see any management company/agent spending that sort of cash if they no there isnt the money in the service charge kitty to pay the bill.

tomstickland

OK, the ominous letter has arrived.
Addressed to the wrong person (previous leaseholders) in a taped back together envelope with I think one bit missing.

Further to the recent completion of the statutory consultation process, I am pleased to advise that we received no comment from leasholders and therefore instructed Bagnells to carry out the works. As you will have seen, they commenced workd on Monday 18th September and the works should last approximately 6 weeks.

We will use existing reserves to contribute to the costs fo the these works although tere us a significant shortfall which must be paid by leaseholders as an additional one off charge..

Brought forward balance: £121.31
Redecoration costs: £1095.14

Total owed: £1,216.45

So they want £1200 for which my 3 windows were repainted and my 1/9th share of the exterior woodwork and two doors.


I'm going to write stating:

1) My correct address
2) This is the first correspondance I have received from Mainstay (might previous leaseholder might have been receiving it?)
3) I have therefore not taken part in the consultation process
4) The work has been completed in 2 weeks, the workmen told me that they had finished when I spoke to them on Friday.
5) Request to see the quote from Bagnells
6) Request for accounts regarding service charges and the decoration fund. There is a £1450 per annum "cyclical redoration fund" on the limited account statement i have.
Seeing how they haven't redecorated for at least 5 years, they should have had around £7.5K in that fund.

I was told that Bagnells had charged £18K for the work! Hence a £10K difference, which would explain about £1K per flat.

Maybe the problem shifts to Bagnells massively overquoting.

On the plus side, I now have the correct name for the property manager and can do some tracing work for direct contact in future.

cattie

Tom if the previous leaseholder had received the notice then he should have informed you that works to the block were in the pipeline at time of sale.Also if there was an estimate of costs of work provided by managing agents, this should have been passed onto his solicitor to pass onto your solicitor for your information.

hazeyj

Hmm yes it does sound dodgy. Have you recently bought the flat? If you have then the management agent/company will have been asked by your sols if there was any significant charges expected in the future. It does certainly sound like their accounts are in a mess. I would make an appointment to go and see them and go through the accounts with them so that they explain to you EXACTLY where the money has gone. You are entitled to ask them to do this as a leaseholder.

A percentage of your managent agent (if it is an agent) fee should be for your managing agent/company to provide accurate accounts and budgeting services. They are clearly not doing this.

Ultimately though, the cost would have to be divided out equally between leaseholders if it would leave the service charge in defacit or is something that has had to happen ie urgent repair matter that wasnt in the set budget. But each leaseholder both new and old would have to be informed of this.

I would ask when they actually sent the letter to leaseholders stating that this work needed to be done and the service charge would have a defecit because of it and also ask why it wasnt included the buget when it was set as I am pretty sure that the building must be repainted every five years as set out in your lease.

They should have also got three qoutes and should have provided you with a copy of these.

Sorry about duplication the poster above posted whilst I was typing.

Is it a management agent or a management company (ie the freeholder etc)?

tomstickland

Ok, here's my letter:

Dear Mr Wiffen,
I am writing in response to your letter of 26th September 2006. This is the first correspondence I have received from Mainstay since I became the leaseholder of number 32 Boakes Drive on 23rd May 2006. The letter was redirected to me from the address of the previous leaseholder who lives at:

Grosvenor House,
Park Road,
Stroud,
Gloucestershire.
GL5 2JG

Your letter states that “further to the recent completion of the statutory consultation process, I am pleased to advise that we received no comment form leaseholders and therefore instructed Bagnells to carry out the works”.

I have not taken part in this consultation process. Please inform me when the letters were sent and I will check whether the previous leaseholders received them or not. I would appreciate new copies of the consultation letters.

You state that “ they commenced work on Monday 18th September and the works should last approximately 6 weeks”. They did indeed start on Monday 18th, and this Friday (30th September) the site foreman told me that they had finished, with only some minor cleaning to be done. So it has taken them 2 weeks, a significant reduction compared with their quote.

They also asked me whether I could refit a Brass door panel since they would otherwise have to wait until someone from the other part of the block came home with the keys, or they’d have to return to Bristol. I agreed since it seemed reasonable at the time. In light of me now knowing more about what they charged for the work I now feel that this was unreasonable.

I have heard from a neighbor that the Bagnells quote was in the order of £18K. This might well be a reasonable quote for 6 weeks work, but is unreasonable for 2 weeks. Please supply me with their quotation or reference number so I can contact them directly if necessary.

I have in my possession limited account information regarding the service charges for the unit at Boakes drive. By careful study of these I have inferred how it works. It appears to me that Fund A covers the block of flats and gardens and Fund B covers areas on the estate outside the communal gardens. Hence each flat has to pay their 1/9th share of the total of funds A and B. The 2005 budget shows that the totals were £6000 for fund A and £2748 for fund B. The combined total is £8,748. Each flat therefore has to pay £972, which is £81 per month or £486 twice a year. These numbers approximately agree with the payment history I have for flat 32.

Assuming that my understanding of the account information is correct, then from the Fund A Budget I see that £1,450 per annum is assigned to a “cyclical redecoration fund”. I understand this to mean that £1,450 per annum is kept aside to build up a fund over a number of years to cover the work. From the condition of the windows then I estimate that they had not been painted for around 5 years. That would suggest that around £7000 had accrued in the redecorating fund. Combining this figure with the £18,000 quote it would appear that there was a £11,000 shortfall and this would explain the one off charge of approximately £1,200 per flat.

Please confirm whether my calculations are correct or not, or supply me with more detailed numbers.

My main concern at the moment is that Bagnells appear to have charged an amount out of proportion with the work that they have done. Hence it is a priority that I find out more about what they have quoted for. Ultimately, if they are really only doing 2 weeks work instead of 6 then most of the £1200 owed from each leaseholder is actually paying for the inflated charges, not for any work on the unit.

My own estimate as to realistic costs, based on some internet research, are shown below. I’ve been charitable and allowed 3 weeks rather than the 2 it seems to have taken. All numbers are approximate and rounded to convenient values.

Scaffolding hire: £2,000
Cherry Picker hydraulic platform: £800
Two decorators @ £350 per day: £5,000
Materials: £400
Carpenter: £500
Total: £8,700

Hence I’d not be surprised if the job was quoted at somewhere near £10K. It really does seem odd that they’ve quoted somewhere close to £18K, almost twice my pessimistic estimate.

My secondary concern is that I have not taken part in the consultation process and certainly would have not agreed to a quote such as £18K for the work. It did not help that the most recent letter was sent to the previous leaseholder. I will write to them and ask them if any other letters have been received from Mainstay in the last few months. I will check with solicitor as to when my details should have been amended and hence whether Mainstay are at fault in not properly communicating with me.

I will be taking legal advice from a number of sources on several aspects of this situation. I have no objection to paying for necessary work if it is reasonably priced and I am properly consulted. In this case I doubt whether the work is reasonably priced and I do not think I was consulted.

I certainly feel that Mainstay should challenged Bagnells about the discrepancy between their quote and the work that they have done so far.

Yours sincerely,

Tom Stickland.

Thinking about some of the other things my neighbor said the I'm starting to worry that all the other flats receieved the quotes and then just stupidly agreed that £18K was a reasonable figure.
Meanwhile the main problem for me is that
1) The management company didn't update their records with my address
2) The previous leaseholder didn't bother forwarding any of the letters to me

I'm coming round to thinking that the management company have probably acted properly apart from making the error on the address. So how am I going to deal with the fact that I'm facing a big fee because of other people's mistakes? Essentially I might end up paying £1200 for overpriced work due to a series of lazy/disorganised people and some bad luck on the timing.

I'm going to write to the previous leaseholder and ask if this letter was the first that they had received for me.

hazeyj

Did you sol prepare a deed of covanent when you completed? Your managing agent/company will have received a copy of this and so become aware of the change in ownership.

If they have been taking direct debits for service charge etc then they are aware of you and havent updated their records which is sheer incompetance.

I would also ask them why this cost hadnt been included in the budget as that it what you pay them to do soas to avoid sitations like this and how many qoutes they obtaind before instructing the contractors.

Also, I would go back to your sol to ask them what the management agent/company's comment was when asked if there was any work to be carried out in the future that would cause your service charge to increase and/or not covered by the service charge budget AND ask them if the previous owner left a "reserve" ( i think this is what its called) to cover this shoudl it happen.

When I bought my flat my solicitor asked the vendors to provide a reserve of £500 as it was not clear if the service charge would increase due to some lift maintaince that had been carried out incorrectly.

If you can make your letter easier to read ie in bullet form then you might get a better response.

dmg24

Are you sure that your solicitor did everything that they should have with regard to the management company? When I bought my property the solicitors did absolutely nothing to check either the lease or the role of the management company.

Having said that, with experience of my management company (Peverel), I am weary of all management companies! After nine months and endless communication from me I am still receiving letters from them addressed to 'The Occupier'!

hazeyj

Remember that if its a managing agent they can be replaced. I instigated the sacking of our last agent.