Leasehold and Over The Top Maintenance Charges

Terrysdelight

Hi Everyone

My son is looking at a little property which is leasehold. One of the things we noticed when viewing was that it had wooden windows so my son would like to change that to double glazing. We've just looked at the legals for the last three years and basically all the tenants I feel are being ripped off with service charges.

Looks like they are redecorating every three years and charging extorionate fees. They are now going to replace wooden windows 'which don't need replacing' with new wooden windows? Looks like they don't want PVC because you can't paint these every three years and then charge silly amounts.

Are the leaseholders able to form there own management company or challenge these unnecessary works?

To me, the maintenance company is writing it's own cheques!

Many thanks for advice.
Terri

BitterAndTwisted

Maybe the current leaseholders don't think that the service-charges are unreasonable. If your son thinks they are then he should buy somewhere else.

Richard_Webster

There are loads of blocks where the freeholder employs a managing agent who rips people off.

In most cases a majority of the residents accept the position and do not complain so it is very difficult to get enough people behind you to do things like exercising the Right to Manage or to collectively buy the freehold. Typically they are not interested and you can't get a majority.

If you think the lessees are being ripped off, buy another flat. Don't ever walk into a situation where it is going to be continual agony with the managing agents.

In some cases they are so awful that the flats become unsaleable because as son as a buyer's solicitor realises ho is involved and how they have been behaving he advises his client not to go ahead, so if you have nay such fears don't buy something you might not be able to sell.

Having said all that you need to be objective and compare it with other similar flats to see how the service charges etc compare.

hazyjo

Is it a period property or a newer one? Just wondering about the windows... If it's Victorian or a character property, I can understand completely why they'd go for wooden. Also, it might be that the tenants took a vote on wooden or PVC and, due to the expense, voted on wooden. Quite often in flats, people move on within a few years. It might be that the PVC quote was much higher than the wooden one and people didn't want to be finding large sums of money if they weren't going to stay there for 5+ years.

Jx

Terrysdelight

hazyjo wrote: »

Is it a period property or a newer one? Just wondering about the windows... If it's Victorian or a character property, I can understand completely why they'd go for wooden. Also, it might be that the tenants took a vote on wooden or PVC and, due to the expense, voted on wooden. Quite often in flats, people move on within a few years. It might be that the PVC quote was much higher than the wooden one and people didn't want to be finding large sums of money if they weren't going to stay there for 5+ years.

Jx

The property is 1970's. The costs of the new windows is more expensive than UPVC. To the average person, I'm thinking if you would replace windows (which certainly don't need replacing), you'd put in the UPVC and save on the 3 yearly painting.

I think Richard is probably right, people just accept what is being done and pay up. I am the sort of person that doesn't like being ripped off so I think my son will need to think carefully before chasing after this flat.

Can the residents appoint additional contractors to give quotes for works. Are you allowed to say to the maintenance company - the windows don't need replacing?

Just want to know what rights the tennants have. Wish my son could afford freehold!

Terrysdelight

BitterAndTwisted wrote: »

Maybe the current leaseholders don't think that the service-charges are unreasonable. If your son thinks they are then he should buy somewhere else.

Thanks for your comments - they don't answer my questions, but thanks anyway bitterandtwisted.

moromir

Some things to note:

The management company, although administered by a Managing Agent, must have company director/s. These director/s are (as far as I know) usually flat owners and should be consulted on major works like replacement windows.

There is usually something called a sinking fund which allows for major works like exterior redecoration without additional cost on top of the service charge. Find out if there is a sinking fund or whether these works are expected to levy additional charges against the owner.

If works are expected to cost over £250 per flat extra on top of service charge, I believe the lessees should be consulted,theres a form and a procedure for this but I am unsure of what its called I'm afraid.

You seriously need to see a copy of the Lease. This will answer the majority of your questions. Provided it has been written half decently it will answer the following:

M.C from here on in = management company which may or may not have an agent to do its administration.

1. Whether the M.C or the owner is responsible for maintenance of windows (ie redecoration).

2. Whether the windows form part of the demised premises and therefore whether the replacement of said windows is the responsibility of the owner or the M.C.

(This sounds contradictory but I have seen leases where the owner is responsible for changing the windows if required but the M.C is responsible for decoration every x years).

3. Whether the M.C. is obligated to redecorate the block every x amount of years.


Other notes:
There should be an annual company AGM that owners can attend and voice any concerns re Service charges

The M.C. should provide an annual budget to show where they have got their figures from.

The M.C. should (as good practice) obtain more than one quote for major works although the Directors are well within their rights to opt for a more expensive contractor if that can be justified (ie better quality of materials, better standard of work etc).

To be quite honest, unless they are thoroughly and absolutely corrupt, they're probably doing an o.k. job and with no offence intended, it is possibly more likely that you don't fully appreciate how much it costs annually to employ gardeners, maintenance men, cleaners, block insurance, if its a tall block the decorators will need cherry pickers hired etc, people out to unblock the drains when some idiot puts fat down it, etc etc it soon adds up!

Terrysdelight

Thanks Moromir. I totally take on board what you say. I do have a leasehold property in the same area and am familiar with costs so I did have good reason for my caution. On deeper delving into the lease, it appears the MC is to redecorate the exterior every 7 years, unless the leasholders have done it themselves. Also, some of the flats have actually got double glazing. MC is actually having the works done every 3 years (instead of 7) - so it looks like it hasnt been picked up on.

It really is a bizare coincidence as when going through all the papers, I realised the managing agents is a company I had dealings with several years ago. I was buying a leasehold property through an estate agent (who happen to be the very same managing agents on the flat my son wanted to buy). The flat was basically a builders do up job and quick sell. The estate agent told me that the property belonged to a 'friend of his' - when surveyor went in he freaked! Outside had been newly rendered but had been done with wrong mix and it was falling off straight away with a slight touch. The electric fuse box was mounted under the kitchen sink behind the ubend! There was a trap door in the living room which gave access to a small cellar - they had carpeted over this but surveyor lifted it to go down and the builders had 'dumped' all there rubbish under there. There were ton's of other things. I pulled out of the sale.

So now, after looking at all the invoices for the works, it transpires that the managing agent of my son's flat, is giving all the work to the very same 'friend'.

I knew I had a good reason for my alarm bells. My son is now looking at some properties in a cheaper area so he can get a freehold instead. Less headache mum thinks!

Thanks everyone

Martin81162

Terrysdelight wrote: »

Hi Everyone

Are the leaseholders able to form there own management company or challenge these unnecessary works?

To me, the maintenance company is writing it's own cheques!

Many thanks for advice.
Terri

If 75% of the residents are leaseholders they can enfranchise and set up their own management company, but you'd have to have legal advise before doing anything.