Roads retention being used to complete road works.

tarajayne

We are finally after almost six years getting the roads surfaced on our developement. Part of it has been covered by a Section 38 and two cul-de-sacs not, us living in one of them. Twenty houses are not covered so having to pay for this, six of those including us had retentions as a sort of insurance against this cost. These monies are now to be released to us and the roads cost is coming in at just over £60k. We are refusing to pay more on top of our retention, as we feel that putting in £5k more than covers us. The retentions total £30k so we feel that the six of us putting these funds in the pot have already helped those without retentions as all but two were fully aware this situation could arise and chose not to negotiate them. We were on Sunday however invoiced for £6180, long story but the guy organising is also banking on money from other residents who live on the roads being surfaced by the council which isn't going to happen, he also hasn't allowed for our legal costs at getting this money released. The invoice states the money is due this Friday the 8th. As its a residents management company how legal is this invoice, can we refuse?

tarajayne

And now we've had a response to an email I sent telling us our retention is not meant for our own use?

rpc

I'm confused by the numbers - 20 houses to pay for works costing £60k and you are being billed for £6k? Why isn't your share £3k?

Who is "the guy organising" and what status does he have?

missile

I had an issue with a house we bought from the developer. He sold adjacent land to self builders with a clause that they were responsible for the cost of the road. The developer died before the road was completed and the dispute got a little ugly. The self builders tried to bill us for a share of the road.

You need to see a solicitor asap.

tarajayne

Because they have taken the retentions that the six hold of £30k, put them into their imaginative pot, then also asked the rest of the developement not affected by this for £450 each which they haven't a chance of getting. Then they have divided what is left by twenty. So those without retentions are gaining from those of us who did have. We are more than happy to put our whole retention in of £5k minus legal fees but we are saying we won't pay a penny more and they should be bloody grateful at that as our foresight has lessened their share already. I did contact our solicitor this afternoon.

tarajayne

Oh and he's a director of the residents management committee.

tarajayne

It's this paragraph from their response that has me mad...

Although you have a! retention, along with six other phase 3 residents, these retentions were not additional costs at the time of the purchase of your house – they were funds not passed to the developer in case the roads were not completed by them.!! Retentions are intended to act as an incentive to the developer, not related to the actual cost of the roads.!
We are asking all Phase 3 residents to pay a share of the shortfall – this means that all will contribute from their own funds equally – retentions are not individual owners’ funds and cannot be considered as an individual household’s payment towards this cost

As far as we understood, and our solicitor said our retention was our insurance against having to pay for the roads should they not be completed. If the developer had done them he would have eventually had this money.

tarajayne

Otherwise what was the point in paying the solicitor in the first place to negotiate the flippen retention in the first place as it was a pita getting them to agree to it.

rpc

Go back to the solicitor that you bought through. Get his view and get a letter sent to the residents association. Your solicitor will also be able to advise on the legal standing of the invoice - you may be required to pay for the road or there may be no compulsion.

I think your interpretation is correct: road is done at no cost and you then pay the retention or the road is done at your cost and the retention is yours to spend on it. This bloke seems to want both.

Out of interest, what is his situation? Will he financially benefit from counting your retention as communal money? Did he have a retention? I can't help but get the feeling that either this is an amateur who doesn't understand things or it is someone who is cooking the figures to his benefit.

tarajayne

He didn't have a retention, he knocked on our door before he bought and had several chats with my DH before he bought as to the situation with the developer as at that point it was common knowledge things were going wrong as the bank had stepped in. DH told him our road was not covered by the Section 38 and he needed a retention but he didn't get one. He did however manage to haggle £70k off the asking price (and I don't begrudge him a penny of it). Because six of us have retentions the other fourteen even if they have to pay the full costs themselves have already gained a reduction of about £1k due to our carefulness. For example, the costs of £60k say, then if divided equally between the twenty we would all pay £3k, but because there is already £30k from retentions they only need to cover the other £30k divided by fourteen. What they want is all our retentions then to divide the balance again by all of us, and also get £450 from residents further down the developement where the council is paying to resurface the road anyway. So in the end he only pays £1810. So our invoice was our £5k retention plus £1810. Sorry, don't know if any of this is making sense.

rpc

That makes perfect sense and is perfectly wrong, as far as I can see.

He negociated money off. You negociated a retention. Perhaps he should chuck some of his discount into the pot?

You aren't going to get anywhere without legal advice. Get onto your solicitor asap and get him to send this bloke a letter that clearly sets out how the road should be paid for. Your solicitor will also be able to advise whether you have any legal obligation to pay for the road at all (you may not). Of course, if there is no obligation to pay and nobody does then the road may not get done! But it is another little bit of ammunition.

I would be tempted to see if you can get the mechanics of paying for the road into the hands of a solicitor, whose fees can be shared between all residents.