Leasehold flat: £1200 payment demand for exterior decoration.

hazeyj

westernpromise wrote:

Indeed - I am just pointing out that, unless you know what they based 6 weeks on, your knowing that they did the work in only 2 doesn't necessarily get you very far. If it was 6 weeks' work for 2 guys, maybe they put 6 guys on it instead and got it done in 2. If you see what I mean.

I reckon your best avenue of attack here is that the process was not followed. I doubt the contractor will reduce the fee retrospectively, because the estimate was accepted presumably on a lumpsum rather than a "time and materials" basis. Once the mgt co agreed that, it is, I guess, neither here nor there how long it actually took.

Question - what will happen if you win, the bills are reduced to £250 and the mgt co then has a £10k deficit? Won't they just pass that back to you, as well?

I had a colleague once whose mgt co wanted £25,000 per flat to underpin a Victorian mansion block. Various lessees took them to court over it, and of course the mgt co just added its own legal costs onto everyone's service charge.

Re the above...They can add it to the service charge but unless it benefits the building as per the terms of the lease leaseholders are not legally bound to pay the bill. Court costs incurred cannot be added to the service charge account as this is a cost incurred by the managaging agent. If they were to instruct proceedings against the leaseholder they would be laughed out of court.

Also the management agent would not be able to chase leaseholders for that money as it is against the terms of the lease. The management agent would be forced by law to absord that cost themselves. Especially since they havent followed correct procedure as in the case of the op.

Just because something has been billed to the service charge doesnt necessarly mean the leaseholders have to pay. If its a substancial amount like the OP case then the agent/company will have a hard time collecting the money expecially as its now been proven that not all leaseholders didnt get their letters and also they never actually got written permission to do the works just stated in the letter that if they didnt have any objection they would go ahead. Written permission is always needed for any large amount of money to be billed to leaeholders in the future.

We forced our last freeholder to absord £14k defecit from our service charge for fees incurred during a insurance case. They didnt get any money back from a insurance company as the freeholder were found to be at fault so they added this to our service charge account...They had to absord it much to their disgust.

tomstickland

I've just had a two hour conversation with another leaseholder.
He's got the consultation documents. It looks like they did approximately follow the correct procedure.

However, no figures were provided for the expected cost per leaseholder. I can't find any reference to a requirement for this in the lease.org guidelines apart from the fact that consultation is required if any leaseholder is going to have to pay more than £250. So the agent must have known that it would cost more than £250 per flat.

Any sensible person would say something like "cheapest quote is £18K which is £10K in excess of our funds, so each leaseholder will be expected to make a one off payment of £1000."

Next, the £18K was for interior & exterior work.
The surveyor told me that they were told to do only the exterior, which would cost £11K.
The bill payment demand only mentions exterior decoration, but says it will take 6 weeks, a figure you'd generally associate with doing all of the work. Now, I don't want to get involved in any more length of time conjectures, but I'd generally say that 6 weeks suggests a lot of work.
At the very least, there is inconsistancy in the information.

I'm not sure what this means regarding the consultation document. ie: consulation was for £18K of work and only £11K was done. Have we been billed for full £18K?

We guessed a number of bill situations.
eg:
-£18K charge, minus £8K fund, £10K shortfall, approx £1K per flat.
-£11K charge, minus £8K fund, £3K shortfall, but some charges etc, call it £450 ish extra per flat, they've combined this with normal £550 service charge for 6 months, hence £1000 owed.

Whatever way, I don't see why we should have to guess what's happening; their bill should clearly lay out how they arrived at the sum.

My personal situation is simpler because they have not consulted with me, hence I owe them £250.

hazeyj

your right.

hazeyj

Tom, I still cant understand why they havent been buildingthe service charge up for this amount. It will be in the lease that that have to decorate the exterior and interior every xx years so they are not providing proper budgeting services for you.

Also, if they havent mentioned any figures in these letters to leaseholders which is wrong.

If an agent is going to spend more than 3k then they have to get written permisison from the directors of the management company...did you ever find out who this was?

If they didnt get this permission then theyve made another mistake.

You need to have a good read of your lease(s). You will have two if you have a share in the management company and see what exactly they are supposed to do.

I think a good sit down face to face meetin with leaseholders and the agant would help. Out of interest how much do you pay your agent per flat?

clutton_2

i think that somewhere in all this, someone needs to ask the question (irrespective of present mistakes) - what is in the long term interests of the building ? does there need to be a larger contribution to the contingency fund for future unexpected works ? This asset belongs to you all, and it would be unfortunate if long term maintainance issues got lost in all this. lots of luck tom, i admire your tenancity.

tomstickland

OK, thanks for the input.
The major questions at the moment are:
-did they have to inform us of the expected cost per leaseholder?
-they need to explain whether they spent £11 or £18K
-if they spent a different amount from the quotes, is the process invalid.

Off to find some answers now.

tomstickland

Out of interest how much do you pay your agent per flat?

Approx £900 per year.

what is in the long term interests of the building ? does there need to be a larger contribution to the contingency fund for future unexpected works ?

The long term aim is to self manage and possibly buy the freehold of the building so that each leaseholder has a share in the building freehold.

tomstickland

lease-advice.org have advised me that:
-the agent is not obliged to inform the leaseholders of the expected cost per leaseholder.

-consulting on both interior and exterior work and then only actioning exterior work is acceptable, since the total cost per leaseholder would then be less.

tomstickland

Some good news: I've just had a call from one of the directors of the freehold company. He sounded pretty relaxed about a possible sale of the freehold to the leaseholders.

If only a few leaseholders were up for buying the freehold, could we form our own company to buy it?

kjl26

tomstickland wrote:

Some good news: I've just had a call from one of the directors of the freehold company. He sounded pretty relaxed about a possible sale of the freehold to the leaseholders.

If only a few leaseholders were up for buying the freehold, could we form our own company to buy it?

A majority of qualifying leaseholders have to want to buy it - to qualify you must have a long lease and meet various other minor conditions, and no more than 25% of the building must be for non-residential use (I think). Have a look at http://www.lease-advice.org/cegsframe.htm.

Katie