£11k Service charges on leasehold flat.

chilihead

Ulfar wrote: »

You can obtain owner details by checking land registry, you will have to pay for it.

Ulfar - thanks, but I have already looked into this. The land registry will not show the correct contact details for anyone that has sublet to tenants on the quiet - which a lot of leaseholders seem to have done.

I can get the leaseholders names, yes, but the contact details are the address which the tenants reside at, and not the leaseholders.

Ulfar

If the details held on land registry aren't right have you tried asking the tenants for the details. Is there a notice board in the block that you can put a poster up. Not all of the landlords will be doing it on the sly.

You only need 50% or more to buy the freehold. You need to get to 13 and are 6 short.

Some of the landlords will be just as eager to get the costs down as you are, £11k will eat into their profits a lot.

Is there an annual tenants meeting that the minutes go to all leaseholders, if there is get the request to buy added to the agenda and have it minuted that anyone interested should contact you.

CarineG

Hi Chilihead,

Any news on your situation?

££sc££

Sounds like you've turned to the right people for advice already. I can't really think of anyone else. It's not worth seeing CAB as you really need a specialist in this field. I guess only other option is a solicitor.

RE: management company taking a %age of repair costs. Think this is quite common but it's often called the management fee for organising works.

I think what Lease or any other advisors will be looking at is if the management company have followed appropriate section 20 consultation. Under the Commonhold and Leasehold Reform Act (CLARA) 2002, there is a prescribed steps freeholders have to go through before carrying out major works. Major works is currently defined as any work that will cost each leaseholder more than £250.00. If this is not complied with exactly the most the freeholder can get back from leaseholder is £250.00. Yep this has cost a lot of freeholders a lot of money! If the section 20 consultation is not followed exactly and leaseholders are billed for more than £250, the leaseholder should apply to the LVT for a determination.

The procedure (for qualifying works above £250 per leasehodlder)..
Freeholder serves Notice of INtention (giving 30 days for observations on works and nominations of contractors).
Freeholder obtains estimates, including estimates from contractors nominated by leasehodlers (or attempts to).
Freeholder/management company issues a paragraph b statement setting out estimated costs and summary/responses to any observations made and serves a notice specifying where the estimates may be inspected and invting observations.
Freeholder allow 30 days for observations on estimates.
Freeholder enters into major works contract.

Further details prob on lease websie or in Leasehold Management (my bible!) by peter robinson.

Best of luck, sounds a mare hun

CarineG

Hi Chilihead,

You could also try logging a complaint with the Royal Institute of Chartered Surveyors which your managing agent most probably is accredited by.
They have a strict code of practice and all their accredited companies have to follow.
You will find some information in the link below:

http://www.rics.org/site/scripts/documents.aspx?categoryID=625

I am trying this with my grievances.

chilihead

Hi

Carine - yes - am lodging a complaint with RICS using their complaints procedure.

I still have not had a response to my recorded delivery letter sent to the MA requesting a copy of the specs/quotes. As I think I mentioned previously, we have independent chartered surveyors, scaffolders, roofers etc ready to review the specs/quotes and offer advise as to the materials used/guarantees etc.

I received a response late last night from Lease Advice - details below. It's long and detailed, but maybe someone will find it useful.

Whilst the leaseholder cannot usually challenge the landlord’s right to carry out repairing obligations outlined in the lease, the landlord’s failure to carry out consultation in line with the S.20 requirements can leave them vulnerable to a challenge about the costs levied on a leaseholder for those works.

The Consultation Process - Is it Defective?
Where a landlord proposes to undertake works to the building that will cost any individual leaseholder more than £250, they must follow certain formalities and consult with the leaseholders.

The Consultation Requirements
Your landlord (or the Managing Agent (MA) if your landlord has appointed one to carry out his obligations) must follow the statutory consultation procedure outlined in Section 20 of the Landlord and Tenant Act 1985 (as amended by the Section 151 of the Commonhold and Leasehold Reform Act 2002) before they undertake any work. The legislation outlines a step by step consultation process under which the freeholder or the MA must advise you of the nature of the works planned, the reasons why the work is necessary and then consult with you on the costs. During the consultation process they must provide you with quotes from a contractor for the estimated cost of the works and invite you to provide the details of another contractor you feel they should approach.

A failure, on the part of the landlord to strictly adhere to the consultation procedure would mean that your liability in terms of the costs of the works would be limited to £250, even if the actual amount you are billed is significantly more. If there is a dispute between the leaseholders and the freeholder about whether the consultation requirements have been complied with, the matter can be referred to the LVT for a determination.

In emergency situations, where immediate steps need to be taken by a landlord to prevent further damage, they can authorise works without consulting the leaseholders. However, they will need to obtain a ‘dispensation’ for their failure to follow the consultation requirements by making an application to the LVT.

More detailed information on the consultation process is outlined in the booklet you can access using the following link http://www.lease-advice.org/documents/S20_Consultation_Private_Landlords.pdf

I would urge to read the booklet if you have not already done so. It is only in circumstances where the landlord has failed to consult at all or where the landlord’s consultation was defective in such a way that it caused the leaseholder ‘prejudice’ that a Leasehold Valuation Tribunal will limit the leaseholder’s liability to £250.

It is important for you to note that there are different versions of the consultation process. The main consultation requirements outline a 3 stage process. In situations where a landlord has a ‘preferred contractor’ (eg a single company who they have contracted with to provide building services to their housing stock), the consultation with leaseholders is more limited. You need to establish which consultation process was used and compare the correspondence you have received from the landlord to the templates outlined in the booklet. If your landlord has failed to follow the requirements you maybe to establish that the consultation was defective.

At various stages through the consultation, your landlord must invite your written observations to which he must ‘have regard’. This is an opportunity for leaseholders to raise any issues about the subject matter of the consultation with the landlord. It is meant as a means of raising relevant points. For example, if the landlord is proposing to undertake repair works to a roof in a situation where the roof was replaced within the last 5 -10 years, a leaseholder may reasonably ask why the landlord is not dealing with the repairs under the guarantee provided with the new roof or under a relevant insurance policy rather than passing on the costs to the leaseholders. The consultation regulations require the landlord to ‘have regard’ to the observations but does not define what ‘have regard’ actually means. In some cases, the landlord is required to provide a summary of the observations raised together with a general response to the observations. In other cases the landlord is required to provide a specific response to a leaseholder’s observation. They type of response your landlord will be required to provide will depend on the version of the consultation process your landlord is using. What is clear from the cases on this point is that the landlord is not required to comply with any suggestions raised by the leaseholders in the observations. However, if the landlord fails to respond to a relevant issue raised by a leaseholder as an observation, this may be useful evidence of the landlords failure to ‘have regard’ in the context of any application to the LVT to challenge the adequacy of the consultation.

Are the Charges Reasonable?
If on closer examination you find that the consultation carried out by your landlord complied with the statutory requirements you may still be able to challenge the reasonableness of the service charges arising from the works.

Subject to what is said in the lease itself, Leaseholders in England and Wales enjoy significant protection against being forced to pay unreasonable service charges for managing and maintaining their building. The relevant legislation includes the Landlord and Tenant Act 1985 and the Commonhold and Leasehold Reform Act 2002.

The law says that service charges are only payable to the extent that they are reasonably incurred and, where they are incurred in respect of services or works, only if the services or works are of a reasonable standard. Unfortunately, what is meant by ‘reasonably incurred’ or a ‘reasonable standard’ is not defined in the law and will depend on the facts of each individual case.

You may claim that the costs are unreasonable because they are significantly higher than what other contractors would charge for the same works. If the standard of works is poor, you might to argue that the costs are unreasonable due to the poor quality and that they should be reduced to reflect this.

However, your chances of succeeding on a challenge that (i) the costs are unreasonable and, (ii) that the services are not to a reasonable standard, will depend on the evidence you can obtain to support your case.

As a leaseholder seeking to challenge the charges levied by your landlord you must provide evidence to the LVT to explain why the charges are unreasonable. In most cases, the programme of works proposed by a landlord are relatively small scale and as such is not a difficult exercise to seek comparable quotes or estimates from other contractors to compare these against.

Evidentially, it is much more difficult to get useful comparables where there are large scale works or contracts being considered by social landlords. If you followed your landlord’s consultation, at some stage you should have had access to the specifications for the works. You can try and use these as a basis for requesting quotes from other large contractors. The difficulty experienced by most leaseholders is that large contractors will not often engage with individuals for the provision of such information. Even if you were able to get some figures, it is unlikely that you will be able to make much sense of these unless you are in the building trade and used to dealing with such large projects.

Site Establishment Costs and Fees for overseeing works are not in themselves unreasonable and as headings for costs; they have been held to be recoverable. What is critical is whether the costs levied in your particular case were unreasonable given what they represent. This is often a factual matter that can only be determined once the detail of what the costs actually covered is known.

If you cannot get the evidence yourself you could try to use previous decisions of the LVT as a basis for looking at the different costs headings being proposed by your landlord in this case. You would be checking to see what kinds of costs were accepted as being reasonable. For further information on the principles used to challenge service charges read our Service Charges booklet you can access using the following link
http://www.lease-advice.org/documents/Service_Charges.pdf

blckbrd

What will RICS be able to do OP? They can't give a determination on any defects in the s20 process or your liability to pay service charges for qualifying works. That is the role of the LVT.

To my mind you should focus on challenging your management company using the relevant legislation in the appropriate arena. I'm no lawyer but if i had carried out the consultation with you as you describe, I'd have invested in plastic undies by now and be thinking how many tins of value beans, wholemeal sliced and It Tastes Nothing Like Butter I could afford on JSA.

chilihead

By following the complaint procedure, it might go in my favour if this case goes to court/LVT as it shows I have tried to resolve the situation before taking it to court.

In this situaton, it's not what RICS can do to the MA, but it shows I am willing to communicate with the MA and follow RICS guidelines to try and work through the issues.

It's just for a paper trail and to cover my backside - and it really doesn't take up much time at all.

CarineG

Hi Chilihead, following the complaint procedure of the MA is the first step as this will be recognised in court like you said. It's what LEASE told me too. The RICS cannot do anything in terms of revoking their accreditation but they do investigate the matter and it doesn't look good for a managing company to be investigated by the RICS.


I do feel your pain. After the building works for our building being ascertained in 2007, no sinking fund has been set up and no money collected for these works by the managing company even though it is clearly stated in the lease. I officially complained to the RICS and through the MA complaint procedure a week ago. The MA has not responded to any of my letter this year or to my complaint so far (they are looking into it).

This morning, I received by recorded letter their estimates for the works: £9630 per flat payable in full or spread over 12 months with interests. That is an extra £800 a month!!! :eek:

I cannot believe the way they have proceeded with this. We are now in the same boat Chilihead.

As far as I can see in my case, the MA are in clear breach of the lease for not putting money aside from 2007. At least, it should bring a few of the leaseholders closer together as there is no doubt this is going to go to the LVT now.

Not the kind of news I wanted to hear today

CarineG

Oh and did I say that the 12 month credit for payment of this bill is organised by one of the sister company of the managing company hence they have not interest in us putting money aside for us...