Excessive admin charges on leasehold major works

daztraction

Long time no post. . .

So I finally got in touch with LEASE.

LEASE wrote:

Please note that the lease is a contract. Its terms are mutually binding on the parties to it and their successors in title. Service charge are recoverable in accordance with the lease terms, however, section 19 of the Landlord and Tenant Act 1985 (the 1985 Act) provides that service charges must be reasonable and services provided to a reasonable standard. Whether a service charge is reasonable or not is a question of fact for the First-tier Tribunal (Property Chamber) (the FTT) to determine if an application is made under section 27A of the 1985 Act. Regrettably the Leasehold Advisory Service does not provide civil litigation advice and I am unable to comment on the potential merits of any claim that you may have save to suggest that you obtain specialist advice.

it is useful to read disputes about service charges available on the Tribunal Decisions link on our website to gain an insight into how the FTT determines these issues. It may well be that the council is forced to disclose the details of the expenditure making up their administration charge as a component of the service charges for the major works programme if you make a FTT application.

Re: first paragraph. Where do I obtain specialist advice from if not LEASE?

Re: second paragraph. Typing ("major works" and "administration charge") into LEASE's Tribunal Decisions search engine returns 466 matches and I guessed that I'm expected to browse through all those 466 PDFs until I find a situation that's similar to mine. Great.

Furthermore, applying to the tribunal costs £60, so I'm wondering whether this palaver is actually worth it at this point.

GAH!

Danfuss

As far as I am aware, Administration Charges are usually defined as those chargeable by the LL for:
1. Considering applications and granting approvals for e.g. alterations to the property;
2. Providing information e.g. in connection with a potential sale;
3. Failure by the T to make payments due under the lease; or
4. Breaches of covenants by the T.
Further, the tenant can withhold payment of this charge until the LL provides him/her with a summary of his/her rights and obligations in relation to these charges.
What you are being asked to pay for seems to be a Service Charge for the LL’s management costs incurred in planning, supervising and generally managing the work. The question then is does the lease allow for this and, if so, is the amount reasonable?
Again, any claim for payment should be accompanied by the summary referred to above.

pinkshoes

I lived in a block of 16 flats, and when we had work done, it was covered by a reserve fund kept aside from leaseholder yearly payments.

(Our freeholder was a management company rather than the council)

We only ever paid for work done from the fund. There was no "admin" charge for the management company to organise the work to be done, as they were paid under the yearly leasehold charge, regardless of how much or how little they had to sort out.

Surely the "admin" should be factored into the yearly payment you make, as this is what the council receive to manage the building?

camptownraces

Lioness Twinkletoes and Danfuss make good points.
You must read your lease.

"Re: second paragraph. Typing ("major works" and "administration charge") into LEASE's Tribunal Decisions search engine returns 466 matches and I guessed that I'm expected to browse through all those 466 PDFs until I find a situation that's similar to mine. Great."

Well, either you do it yourself, or you pay someone (eg solicitor) to do it for you.

It sounds as though you seriously expect the freeholder to engage surveyors, write specifications, put the job out to tender, and monitor to the work without charging the occupants. Who pays for this work then, the Council Tax payer?

daztraction

Danfuss wrote: »

The question then is does the lease allow for this and, if so, is the amount reasonable?

I'll get back to LEASE and ask them, cheers.

daztraction

pinkshoes wrote: »

I lived in a block of 16 flats, and when we had work done, it was covered by a reserve fund kept aside from leaseholder yearly payments.

We only ever paid for work done from the fund. There was no "admin" charge for the management company to organise the work to be done, as they were paid under the yearly leasehold charge, regardless of how much or how little they had to sort out.

Surely the "admin" should be factored into the yearly payment you make, as this is what the council receive to manage the building?

We haven't got a "reserve fund" or "sink fund" set up, unfortunately. I do pay an annual service charge though, but major works (according to the lease) are charged separately from that.

daztraction

camptownraces wrote: »

Lioness Twinkletoes and Danfuss make good points.
You must read your lease.

Read the rest of the thread - you will notice that I have done, and needed LEASE's advice on the matter.

camptownraces wrote: »

"Re: second paragraph. Typing ("major works" and "administration charge") into LEASE's Tribunal Decisions search engine returns 466 matches and I guessed that I'm expected to browse through all those 466 PDFs until I find a situation that's similar to mine. Great."

Well, either you do it yourself, or you pay someone (eg solicitor) to do it for you.

The admin charge is around £250, so I'm not likely to pay a solicitor to read it.

camptownraces wrote: »

It sounds as though you seriously expect the freeholder to engage surveyors, write specifications, put the job out to tender, and monitor to the work without charging the occupants.

Again, read the rest of the thread. I want to know whether around £250 is a fair price to pay.

A clue is the word "excessive" in the thread title, but in case you need others, here's some of my quotes from further up the thread:

"So, can I reduce this administration charge?"

"It's just that £1,541.88 seems to be an excessive amount for "admin", and I want to know whether that's a suitable figure for Major Works."

camptownraces wrote: »

Who pays for this work then, the Council Tax payer?

Me, fairly. I'll happily settle for the money to be taken from Keith Camptownraces's own council tax money though.

Thrugelmir

daztraction wrote: »

"It's just that £1,541.88 seems to be an excessive amount for "admin", and I want to know whether that's a suitable figure for Major Works."

20% of that will be VAT.

So the net charge is only £1,284.90p