section 20 consultation process and LVT query

emsvex

Hello
I wonder if you can help with some advice.
I own a flat in a block of six. The managing agent is also the freeholder.

On 24th June this year I received a letter from the managing agent, asking for leaseholders opinion on proposals to replace the communal windows and front door. Estimated cost was given of being in the region of £1000 per flat. There were no further details about when work was to be done, how costs would be covered or any mention of consultation periods.

Myself and at least two other leaseholders responded separately that whilst we agreed the work would be nice, (the windows and door being the originals from 1976) before giving our final consent we wished to see the quotes and be given final costs. I also suggested quotes be obtained from two local firms. I believe one other leaseholder made suggestions for a local firm too.

I have heard nothing more from the managing agent.

The end of last month I was woken to the sound of smashing glass. I discovered a window replacement company at the request of the managing agent putting in new windows and front door.

I am the only leaseholder actually living at their property. The remaining 5 properties are let out and the leaseholders to these properties no longer have a front door key to their properties as the lock was changed at the time of the new door being fitted.

I have spoken to a solicitor and on his advice have sent a letter to the managing agent, saying I'm not happy and drawing his attention to the consultation process section 20 of the 1985 Landlord and Tenant Act. I have not had a response to this letter.

Instead over the weekend I received a copy of the invoice and bill for £1165 covering my portion of the work, to be paid as soon as possible. Included with the invoice is a quote dated 11th June for another company. This indicates that the 'proposed work' had already been decided upon prior to the first letter being sent to us.

I have discussed this with the four leaseholders I am in contact with and we are concerned that the managing agent can procceed with work that none of us have given consent to and with no clarity of costs or notification. I am in the process of trying to make contact with the remaining property to see if that’s the case with them.

The managing agent is not aware the leaseholders are in contact with each other. On receipt of the bill one of the leaseholders contacted the agent quering the work. The managing agent is now claiming to that leaseholder that work was done as an emergency and that the other leaseholders had agreed to it! This is clearly not the case.

Having read more and more about section 20 I would really appreciate some clarification

Are the managing agents actions acceptable?
As he has sent quotes, albeit after the event, would that be seen as fulfilling his obligations? (neither quote are from companies put forward by leaseholders and one of the quotes is from company contracted)
Can the managing agent make demands for immediate repayment for sums greater than £1000 or are affordable monthly repayments acceptable?

We have no reserve fund on the building. The managing agent has paid using money from elsewhere.

My solicitor has mentioned LVT as he believes there are technical breaches. However I am cautious of the term 'technical' and don't wish to put myself though additional stress, and the financial outlay of a tribunal without probable success.

I don't have a good relationship with the managing agent/freeholder having challenged him before on maintenance charges. He was charging for items of rubbish to be removed when there hadn't been any rubbish. And cleaning and gardening wasn’t done for approx a year yet we were still being charged. This year I have sent him a number of emails about problems at the property which he has never responded to. The general consensus is that he won't do anything unless there is a financial gain for him.


Many thanks for your input Ems

Fire_Fox

How much have you read about the consultation process? There is an excellent summary here, also of applying to the LVT http://www.lease-advice.org/publications/
If the work is urgent your freeholder must apply to the LVT for dispensation to do away with the consultation process. Otherwise they must consult properly unless EVERY leaseholder agrees, and the law is clear about the format and timescales. If they do not do this the limit they can claim is £250 per leaseholder.

AFAIK you have no legal right to pay for major works by instalments, either the amount is due under your long lease and the legislation or it is not, it is the leaseholder's responsibility to ensure they have their own personal 'sinking fund'/ rainy day savings. IMO do not muddy the waters by intimating you have difficulty paying, that may make it look like your complaints are "frivolous, vexatious or otherwise an abuse of the process" (see LVT decisions).

If you take legal advice be sure to get a solicitor that specialises in leasehold disputes and going to the LVT, I spoke to several a few years back and some knew as much as I did from amateur research, some less, only one knew much more. LEASE also have LVT decisions on their website which are well worth reading and some LVTs produce instruction videos. It is cheap to represent yourself at the LVT and from what you say if you prepare a logical case you should easily win enough to cover your costs on the service charges or major works or both.

Stop communicating by e-mail or telephone and put all your complaints into writing, it's very easy to say an e-mail didn't arrive - you might have got the address wrong, it might have gone into a spam folder, they might have changed e-mail address and so on. Send two copies from different Post Offices and keep the proof of posting slips. Have other leaseholders do the same and copy all your letters to each other. If you end up at the LVT it needs to be very clear that you have long had reservations about the service charges being 'reasonably incurred' or the work being to a 'reasonable standard' (one of the Landlord-Tenant Acts). The Supply of Goods and Services Act may also be relevant here.

Much of your case sounds like my old management company and caretaker, just substitute fire escape for windows! :rotfl: I wrote many letters over several years and got a very poor response. I wrote formally requesting access to all invoices and all service contracts, not just the annual accounts. This was a very enlightening experience and one I highly recommend. Like you we were being charged for stuff that was simply not being done. Our freeholder refused to question the cleaning company or the caretaker virtually calling me a liar and threatening bailiffs! :eek:

Since they had not consulted on the fire escape nor sought dispensation, and were not including the prescribed information with the quarterly service charge invoices I stopped paying and waited for them to take me to an LVT. I do not recommend withholding funds unless you are 100% confident you are in the right legally and have been advised this is an appropriate course of action by a solicitor or LEASE. I had a folder full of letters and other documents to take to the LVT as evidence, it was clear that my records were in far better shape than theirs were. My letters were very clearly laid out with headed paragraphs - quoting the legislation, quoting my long lease, quoting the service contracts and listing dates of previous complaints. I also retained all the recorded delivery slips.

I continued to pay ground rent, buildings insurance, £250 towards the fire escape, ended many letters with offers to have site meetings or attend LEASE mediation/ RICS arbitration. In the end the freeholder actually paid someone to take the building off their hands and my account was wiped. :cool: Obviously if you are being billed correctly for service charges you MUST pay these but clearly state you are paying under protest and reserve the right to challenge at an LVT.

propertyman

Well you have three options

1: Accept it - if the windows and installation are of quality and the cost appears sensible.

2: Challenge it as the consultation process has not been complied with ( blatantly), and emergency situations only allow for dispensation from consultation if they apply to the LVT.

3: There is breach of quiet enjoyment and a big question, are they your windows in your lease, if not it's trespass criminal damage and theft ( though subject to moderation by "Sini Plenis Piscis")?

What is at stake is the quality of the work and the cost and if it is actionable, or more importantly, worth actioning. At worst it's £1195 - £250 saved, plus your costs of and time of arguing. If the windows might fall out in a breeze or are just cheap and nasty (£ 1195 ???) then it is worth challenging at any cost. Set up a residents association to coordinate your contact.

Quite frankly it is evident that the managing agent has not a clue what they are doing and that's dangerous. If nothing else you should look at the appointment of an independent manger at the LVT, right to manage or contact the freeholder and explaining that the MA is, bluntly, a !"£$^%$ liability for you and them


WITHHOLDING was the invoice sent with a summary of tenants rights, if not then you can withhold it. http://www.legislation.gov.uk/ukpga/2002/15/section/153

emsvex

Thank you both Fire Fox and Property Man for your invaluable information.

Fire Fox yes I have researched extensively the section 20 process and LVT. I have made enquiries with four different solicitors, and I have to say I think I knew more about

Fire_Fox

emsvex wrote: »

Thank you both Fire Fox and Property Man for your invaluable information.

Fire Fox yes I have researched extensively the section 20 process and LVT. I have made enquiries with four different solicitors, and I have to say I think I knew more about

Are you saying you felt you knew more than the solicotors did? If so as I said "If you take legal advice be sure to get a solicitor that specialises in leasehold disputes and going to the LVT".

propertyman

emsvex wrote: »

Fire Fox yes I have researched extensively the section 20 process and LVT. I have made enquiries with four different solicitors, and I have to say I think I knew more about

That is not uncommon.

emsvex

Thank you both Fire Fox and Propertyman for your invaluable information.

Fire Fox yes I have researched extensively the section 20 process and LVT. As I notified other leaseholders of the issue I feel somewhat responsible and have made every effort and extensive enquiries to ensure the information I have is correct. I have to say I think I know more about the process than some solicitors. I've even been offered a job!! I struck gold with one particular solicitor who knew exactly what I was talking about from the start was able to confirm everything I had discovered already and explain the grey areas to me and various options in some detail. LEASE have also been fantastic with their advice and support.

I should clarify the managing agent is also the freeholder.

Having met and dealt with the M/A/Freeholder on more that a few occasions, I don't believe they have any understanding or interest in the management of the property. Propertyman I believe your assessment of the M/A/freeholder is completely true 'dangerous' and a 'liability'. Solicitors I have spoken to also described the M/A/freeholder as 'reckless and dangerous'. The advice I have been given would be to write collectively to the M/A/F advising him of the section 20 and paying our legal obligation of £250 each only. This is really our best and quickest moving option to get the matter settled and get the M/A element removed. The general consensus from the legal advice I have received is the M/A/F won't accept £250 and will submit a claim to the crown court. The leaseholders can then offer section 20 as our defence and the court will refer the matter to LVT. When the case gets refers to the LVT the leaseholders motion a request for the appointment of a new M/A and either offer our own or ask the LVT to appoint on our behalf. This way it will keep costs to the leaseholders to a minimum and we reactive to the situation and are not doing all the running around.

I met with the other leaseholders to discuss the above. RTM was brought up as another option. However the biggest concern we have as leaseholders is that the complication of the M/A also being the freeholder. Regardless of removing them as M/A we will still have to deal with them as the freeholder. The other leaseholders are anxious not to upset the M/A because of the freehold aspect. The other leaseholders are fearful that as the freeholder the ground rent will be increased and that the freeholder can prevent them from subletting their properties. Concerns were also raised over the question of leases. Two of us, including myself have short leases that will need extending should we wish to sell. I have pointed out that the freeholder cannot just increase ground rent without good reason, for which there are none. Nor can they just charge any figure for the renewal of leases. And as leaseholders had been subletting for many many years and its allowed in the terms of the lease the freeholder cannot prevent that either unless they had good grounds. I.e. they had received complaints about the tenant. Further the other leaseholders are concerned that by appointing a new M/A the maintenance charges will increase.

The leaseholders are quite adamant not to upset the M/A/F and that we should get them onside. The leaseholders are suggesting we offer the M/A/F half the money due now and the remainder to be paid when they have completed consolation on future works correctly. However I feel this is flawed. Whilst it shows good will on our part, having previous involvement I know the M/A/F will either be friendly until all the money is received or threaten court action. The future works mentioned have not been dated by the M/A/F. They have expressed an interest to do cosmetic work, painting, new door entry, letterboxes and install a security light to the property at a future date. I think that by not being firm from the outset we are weakening our position when this all eventually goes to LVT. The law regarding section 20 is very clear and I think we are endangering our position by muddying it. I have been told by the other leaseholders that its my prerogative as to what I wish to offer the M/A/F whether it’s the minimum £250 or more, but that I should be mindful of the lease renewal aspect. As I don’t have a good relationship with the M/A/F who previously tried to blackmail me with the lease I don't think I have much to loose. However I am conscious working together with the other leaseholders and being seen a collective gives us a stronger voice.

The actual work that has been carried out is sound. It is of a good quality and at a fair price and that is not being contested. I suspect the M/A/F is planning to sell the freehold (they have previously intimated to me that they have no interest or desire to keep the property and want to off load it) and the work is being done to make the property appear more desirable.

The invoice was not sent with a summary of tenants rights. However our lease stipulates that any invoices need to be paid in full immediately they become due. I am worried as we have now received a second reminder (less than a month since the original invoice) and that we need to act quickly. I did suggest to the other leaseholders that we wrote to the MA/F offering £250 so that will fulfil our legal obligations and advise the M/A/F that we are looking into the probability that section 20 has been breached and that if they can prove otherwise we will gladly pay any money outstanding. This option was vetoed.

All my correspondence with the M/A has been by recorded delivery letter for which I have receipts. I have also sent copies of letters via email to all email addresses I have for the M/A. Other leaseholders are still communicating via email or phone. I have pointed out the negatives of these forms of communication, i.e. no documentation for phone calls and emails not being delivered. I have never suggested that I cannot pay. I know there is no discourse for this, that lack of money is not of the M/A/freeholders concern or the LVT. A leaseholder has brought up with the M/A that they will have difficulty paying £1200 just like that and whilst they were told via email that their financial limitations were not of their concern the M/A/F did offer to discuss a repayment plan.

I suggested to the leaseholders that instead of making an immediate decision we all need to go away and seek advice as to where I/we stand legally offering to pay half of the invoice. Where individuals stand with regards to sub-letting and to get further insight/understanding of the process and limitations of buying a new lease. I also need to consider the implications for me if I were to proceed alone or proceed with the other leaseholders but offer the £250 only.

emsvex

Apologies. I've just noticed that part of my post prematurely appeared at 0643. Please disregard. Full post timed at 09.18.

emsvex

Fire fox, I was joking about knowing more than a solicitor. Whilst at some times I felt as if I did, having to point out which section of which Act to one of them. I am aware property law is extremely complex. I wouldn't dream of taking any action without consult ting an expert in this field. Whilst I am fairly confident with all the research I have made, it would be arrogant of me to presume I know enough to represent myself and extremely reckless to presume I can guide and represent the other leaseholders. That's why I suggested at the end of the meeting that no decision was made there and then so each of us had time to reflect on matters raised and seek our own independent advice.

Ultimately whilst we may be seen to act as a whole we all have our own individual objectives and interests to protect. I have also strongly recommended that should whenever or if ever we do go to court/LVT that we have legal representation.

propertyman

emsvex wrote: »

Fire fox, I was joking about knowing more than a solicitor. .

based on your post you do know more as

a "crown court":eek:has no jurisdiction here - muggles

b not a one mentioned the LVT. :rotfl:

I am willing to bet today's sugary goodness treat that 90% of what I will say wasnt suggested

Look the answer is that you can make the application yourself. And you must make it not wait for them. If they initiate then they can start to add costs very quickly, where they cannot do so if you do.

The three areas to work on are

1: And I bet no one said this- under the lease are they demised to you, if so then they are not theirs to remove and change, full stop.

2: You have the section 20 booklet I am sure and can match what stages they missed and for those that they did whether or not it complied.

3: Whether the way in which the costs were demanded are calculated as the lease requires, if it did not the invoices are not valid. Moreover the invoices must contain the name and address of the landlord under section 47/48 of the landlord and tenant act 1987 and must be sent with a summary of rights- if not then you can withhold them

and the earlier points on reasonableness of the cost.

Fire_Fox

You sound very on the ball. :T

As Propertyman says it's the county court in cases where there is no evidence of dispute just non payment, LVT where there is clear evidence that the leaseholder disputes the charges. Whilst I fully applaud you working together, this is not essential. Each leaseholder should formally dispute their own invoice because each are individually contracted to the freeholder unless you are a recognised residents and tenants association? You can work together or individually at the LVT- even if everyone else pays up quietly you do not have to. Also they can pay and then dispute later, if you win your case.

Don't offer £250 actually pay the £250 if you accept that is your liability, it indicates you have a genuine dispute about the consultation you aren't just a bad payer or stalling for time. I don't see any logic in offering half unless you dispute the quality of the work (reasonable standard) or the price charges (reasonable). Seems to me to be mixing and matching the legislation which is muddying the waters.

Where your long lease stipulates that invoices are due immediately this assumes they are properly served so include any summary that is required and include all the prescribed information. Where this is not done the law deems the invoices not served and not due. Bear in mind the summaries with service charge invoices is relatively new legislation that post dates many long leases. The long lease should always be read alongside the legislation: mine allows for disputes to go to RICS arbitration but this does not prevent the leaseholders or the freeholders going to an LVT.

If the freeholder were to sell the freehold he would have to offer it to the leaseholders first - if you can all pay only £250 for the windows it gives you more cash to buy the freehold. This effectively frees you from the issues of lease extension, all you have to do is agree between you and you can extend for just the legal costs, no premium which will save thousands. Also means you can schedule your own repairs and maintenance, not charge ground rent, no worries about covenants being enforced unreasonably. Would this help get the other leaseholders on board?

Does your long lease permit improvements or only repairs and maintenance? Most privately owned blocks only permit the latter, tho ex social housing long leases often permits improvements. Do check, the freeholder may not be able to charge for much of the work he proposes.

I don't know how much time you have on your hands or if you have the inclination to do this but ..... I wonder if it would be worth preparing a document to give to the other leaseholders? Basically a brief summary under clear headings of all the legal and contratual issues we are discussing here, you can copy and paste much out of LEASE if you credit them. This gives them something to think about and take to their legal representative.