Excessive admin charges on leasehold major works

daztraction

Good luck with the sale nicegirl - I only bought my leasehold flat because of the work/life balance convenience it brings and also because it was on the market for six months and therefore had £15k knocked off it.

(Don't forget to check how long the lease is!)

rpc

daztraction wrote: »

I have enclosed a copy of your lease and marked the relevant paragraphs applicable to your query about the major works administration fee and the clauses that allow this to be recovered.

And what do these say?

nicegirl

We're selling the leasehold, not buying it. I never intend to buy a leasehold property ever again, it's been a nightmare!:D

daztraction

rpc wrote: »

And what do these say?

I was worried somebody was going to ask me that. . .

Here's the first paragraph marked out for my attention:

2. THE Lessee hereby covenants with the Council and with and for benefit of the Lessees from time to time during the currency of the Term of the other flat or flats comprised in the Building
(A) To oberve (sic) and perform the covenants contained in the Seventh Schedule hereto
(B) To observe and perform the rules and regulations set forth in the Eighth Schedule hereto
(C) To observe and perform the covenants conditions restrictions and stipulations (if any) referred to in the Eleventh Schedule hereto so far as the same relate to the demised premises and to indemnify the Council from and against all actions costs liabilities claims and demands arising out of any future breach thereof

It might as well be written in Latin as far as I'm concerned.

The next paragraph marked out for selection runs to three pages and is about six times the size of that italicised section above. I might type it all out if it doesn't make you fall asleep. But here's a snippet that may be the kicker:

IT IS HEREBY DECLARED that the Management Charges may (with prejudice to the generality of the foregoing) include such amounts as the Council shall from time to time consider necessary to put to reserve to meet the future liability of carrying out major works to the Building PROVIDED that. . .

. . .

(D) That major structual repairs and replacement are to be charged separately as they arise but the Council will reserve the right to require the payment of such reasonable sums as the Council consider necessary to put to reserve to meet the future liability of carrying out such major works

Next bit of undecipherable legalise marked is from 'The Seventh Schedule':

2. To pay all existing and future rates taxes assessments charges impositions and outgoings whatsoever now or hereafter assessed charged or imposed upon the demised premises or upon the owner or occupier in respect thereof or payable the owner or occupier in respect thereof and in the event of any such being assessed charged or imposed in respect of the Building to pay the due proportion thereof attributable to the demised premises except only (in all of the above cases) such as the owner is by law bound to pay notwithstanding any contract to the contrary.

Next, still from 'The Seventh Schedule':

15. To pay the Council all expenses (including solicator's costs and surveyor's fees)
(i) incurred by the Council for the purpose of or incidental to the preparation and service of a notice under Section 146 of the Law of Property Ace 1925 notwithstanding that forfeiture is avoided otherwise than by relief granted by the Court and
(ii) incurred by the Council incidental to the preparation and service of a Schedule of Dilapidations at the end or sooner determination of the Term in respect of the demised premises

The final paragraph marked is the entire 'Ninth Schedule' that outlines:

Council's covenants to be observed by the Council at the Lessee's expense

1. To keep in good and substantial repair and condition (and whenever necessary rebuild and reinstate and renew and replace all worn or damaged parts) of:

(basically EVERYTHING about the flat, which includes the roof)

And there you have it. Thankfully, it's a slow work day so I can type this bumff in.

Glastoun

daztraction wrote: »

Thankfully, it's a slow work day so I can type this bumff in.

^^^^^^^^^^^^^^^^^^^^^^^
This is why admin charges are so high.

daztraction

Glastoun wrote: »

^^^^^^^^^^^^^^^^^^^^^^^
This is why admin charges are so high.

Because of slow work days?

rpc

If they are highlighting that much then it might be a sign that they don't really know what they are up to.

I don't see anything there that lets them charge admin fees (especially not at a generic % rate). The seventh schedule stuff is not relevant (as you have quoted it). Para 15 refers to forfeiture proceedings only.

Is there anything else near "D That major structual repairs" about charges, fees, etc?

daztraction

It does seem that they've basically highlighted all the bits of the Lease that refer to the Lessee being responsible for paying the Council in some way. . .

Here's the "D That major structural repairs" bit in full:

3. The Lessee hereby further covenants with the Council as follows:-

(A) To pay to the Council such annual sum as may be notified to the Lessee by the Council from time to time as representing the due proportion of the reasonably estimated amount required to cover the costs and expenses incurred or to be incurred by the Council in carrying out the obligations or functions contained in or referred to in this clause and Clauses 5 and 7 hereof and the covenants set out in the Ninth Schedule hereto for each financial year running from the First day of April in each year to the Thirty-first day of March in the following year (such costs and expenses being hereinbefore and hereinafter together called “the Management Charges”) such estimated amount to be payable yearly in advance on the day specified for payment of rent hereunder the first payment being proportionate part for the period from the day hereof to the First day of April next made on the execution of these presents and IT IS HEREBY DECLARED that the Management Charges may (without prejudice to the generality of the foregoing) include such amounts as the Council shall from time to time consider necessary to put to reserve to meet the future liability of carrying out major works to the Building and Reserved Property or to the demised premises PROVIDED that

(i) the Council will make a contribution towards the management charges which is equal to the due proportion multiplied by the number of flats for the time being forming part of the Reserved Property

(ii) in determining the Management Charges statutory provisions for the time being in force relating thereto shall at all times be complied with

(B) To pay the council on demand the amount by which the estimated sum paid by the Lessee to the Council under sub-clause (A) of this Clause in respect of the Management Charges for each financial year as aforesaid (or in the first year of the term part of a financial year) is less than the due proportion payable by the Lessee of the total moneys properly and reasonably expended or retained by the Council constituting the Management Charges for such financial year

(C) That if the amount by which the estimated Management Charges paid by the Lessee to the Council under sub-clause (A) of this clause is more than the due proportion payable by the Lessee of the total moneys properly and reasonably expended or retained by the Council as above the excess so paid shall be carried forward by the Council to be credited to the account of the Lessee

(D) That major structural repairs and replacement are to be charged separately as they arise but the Council will reserve the right to require the payment of such reasonable sums as the Council consider necessary to put to reserve to meet the future liability of carrying out such major works

(E) THAT by virtue of Schedule 6 paragraphs 16 (B) and 16 (C) of the Housing Act 1985 the Council’s recovery of costs for carrying out repairs or works of improvement to the property and/or the Building is regulated for an initial period (being generally five years from the date hereof) to the estimated contributions (together with any inflation allowance) contained in the Offer Notice served on the Lessee by the Council under Section 125 of the Housing Act 1985 prior to the grant of the Lease BUT it is hereby agreed that in the event that the Council shall have carried out works of repair to the Property or the Building (and have if required serve notice in accordance with Section 20 of the Landlord and Tenant ACT 1985 or any statutory modification or re-enactment thereof in respect of the cost of these works) or shall have carried out works of improvement to the Property or the Building THEN the initial period for the purposes of Schedule 6 paragraph 16 (B) (4) (a) of the Housing Ace 1985 or any statutory modification or re-enactment thereof shall commence on the date immediately proceeding the carrying out of such works of repair or improvement and the Lessee shall pay (if so demanded by the Council) the full costs of the said repairs or works of improvement

eddddy

daztraction wrote: »

...
Thankfully, it's a slow work day so I can type this bumff in.

Hi daztraction

I hate to do this, but... it looks like your full lease is available online from YHN here: http://www.yhn.org.uk/pdf/plain%20English%20lease.pdf

(Complete with 'plain English' translations in the coloured boxes.)

daztraction

Ha! Thanks eddddy. You gotta laugh, I suppose.