Service Charge

TVPIPE

Scenario
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A four flat property with separate owners.
Each owns 1/4 of freehold and also a lease.

There has never been a service charge in place, however the building need repairs sooner rather than later.

How would we go about establishing a service charge - as in the paperwork involved - as we are keen to have an official service charge rather than each owner simply paying each year after a verbal agreement - would this need a solicitor etc..

we have searched the internet but without much success...

are there any templates around -or other advice.

Richard_Webster

The very first thing is to read your leases. They may well set out how a service charge is to be collected and what items it can cover.

If, for instance, the lease allows money to be collected as part of a service charge for future work to go into a sinking fund you can do that. If it doesn't, you can try to reach informal agreement to do it, but later on down the track someone may refuse to pay and you won't be able to make him unless his lease has been altered to require the payment.

Each flat owner must agree to his lease being altered - you cannot just make some agreement by majority vote and assume that is it. the Landlord can only make the lessee flat owners do what the lease entitles him (meaning them collectively) to require them to do

If the shared freeholders literally own the freehold between them as individuals then they must decide to do things unanimously - so one person can hold out. If a company owns the freehold and each of you has shares/membership of it then in general a majority vote will prevail - but only as to discretions given to the Landlord in the lease. If the lease says that the Landlord may establish a sinking fund for future major expenditure but doesn't have to do so majority can decide whether or not to do so, and that can be enforced. However if there is no power to do that the leases would have to be altered first.

Equally if the lease obliges the landlord to do something then a majority vote not to do the thing can still be upset by a single objector who says that he doesn't care what the others think, his lease says that the landlord must do whatever....