Management company issues for leasehold flat

foolishboy

Morning!

Will try to be as brief as possible :-)

- Wife and I own a flat (leasehold with management company) in a block of 4, 2 are tenanted (incl. ours) and 2 are empty.

- Exterior of block is in dire condition, has been for years and despite nagging the management company to arrange works nothing has happened until earlier this year where they have finally obtained quotes for the work (around £5k each if that matters)

- Management company are now chasing us for the £5k so they can begin work


My concerns are:

- The building wouldn't need £20k of work doing had they managed the place properly in the first place

- They want £5k from us now but are clear in saying work will not begin until everyone pays up. The 2 properties which have tenants most likely will (although £5k is a lot considering the flats are only worth £65-70k on a good day) but I sincerely doubt the owners of the empty ones want to cough up for the repairs. In reality we could pay up and the work could take years (if ever) to actually begin.

Anyone else had a similar situation? Where do we stand on:

a) Making them take some of the hit on repairs for mismanagement
b) Getting them to start work without all parties paying up front, surely the whole point of using an agent as that collection of money for repairs (just like the service charge) is their problem and not ours

I also have a suspicion that the other 2 flats aren't even paying their service charges, am I allowed to ask the company to reveal this? They would well be loading our charges to compensate which is of course grossly unfair.

Thanks in advance!
FB

eddddy

foolishboy wrote: »

- Exterior of block is in dire condition, has been for years and despite nagging the management company to arrange works nothing has happened until earlier this year where they have finally obtained quotes for the work (around £5k each if that matters)

If you and the other leaseholders want to take over management of the block, you may be able to form a Right To Manage company. See: https://www.gov.uk/right-to-manage-a-guide-for-landlords/the-right-to-manage and http://www.lease-advice.org/publications/documents/document.asp?item=21

foolishboy wrote: »

- The building wouldn't need £20k of work doing had they managed the place properly in the first place

If you believe that the Freeholder has breached a covenant in the lease by not maintaining the property and you have suffered a loss as a result, you could make a claim for damages.

foolishboy wrote: »

b) Getting them to start work without all parties paying up front, surely the whole point of using an agent as that collection of money for repairs (just like the service charge) is their problem and not ours

Yes - they are responsible for collecting money. But, as you say, they wont start work until it is all collected. If some leaseholders can't or wont pay, ultimately the freeholder would have to repossess the flats and sell them to get the funds, before the work could start. This requires court orders etc, and is likely to take a long time.

This all assumes that the freeholder went through the proper section 20 consultation process.

foolishboy

Sorry, never saw this response, thanks!!

...the complaint is progressing. I dug out an old S20 from 2008 where works were suggested but never completed. They're also claiming that routine maintenance and inspections are taking place which is clearly not the case.

If I do claim for damages would that be through small claims court? Or another avenue?

Perhaps once this is all over we would look to take control of management but feel we'd be letting them off the hook if we did this now.

Thanks!

vw100

Legal proceedings can be costly and take a lot of time to conclusion. No doubt the managing agents will be defending it from their end in a strong manner. So unless you have backing from the other tenents and enough concrete evidence to support the claims think carefully going down this route. You already mention that they are claiming routine maintenance and inspections are taking place.

foolishboy

vw100 wrote: »

Legal proceedings can be costly and take a lot of time to conclusion. No doubt the managing agents will be defending it from their end in a strong manner. So unless you have backing from the other tenents and enough concrete evidence to support the claims think carefully going down this route. You already mention that they are claiming routine maintenance and inspections are taking place.

As I feared. I've asked for proof of inspections / maintenance records etc.. we'll see what they come back with. Other tenants are on board but as you say concrete evidence is what we need.

Thanks,
FB

foolishboy

OK I've had a response.

They've come up with a list of inspection dates and a list of works carried out. Nothing material has happened since January 2011 and given the state of the place I cannot possibly see how this happened.

I asked for a copy of the inspection reports (every 6 months apparently) as it would confirm whether any works at all were carried out but they're refusing to hand them over. They stated:

"The site visits undertaken whilst the property is under xxxxxxxx Management are internal reports and confidential between us and our client. We do not send these out to residents or leaseholders I’m afraid."

How flipping convenient. I pay the management fees, I'm a client too. How can I make them hand these over?

Also back to the topic of the original quote I've managed to extract details of the accepted quote and it makes depressing reading to say the least.

Firstly the selected contractor is in Essex, the property is in Sussex. Why on earth aren't they using a local firm?

Secondly the amounts (and I have some experience with regards to renovation works) are pretty outrageous.

Where do I go from here? Can I make them go back out to tender and use local firms? Can I just take this out of their hands and get it done myself? I'm guessing not as it would have to be approved by the leaseholder.

Cheers,
FB

princeofpounds

Who owns the freehold?

You need to answer this question before we know what your situation really is.

moromir

You would often hold a nominal share in the Management Company, suggest you find out if this is the case in which case I would think you have a strong argument for seeing a copy of the reports.

If you aren't I tend to agree with them, their client is the MC not you.

foolishboy

..freehold is owned by another company.

Presumably I could ask the freeholder for permission to see the reports, I can't think of a single legitimate reason why I should be prevented from seeing them.

The cynic in me is thinking they prove that there have been maintenance issues for years, hence the need for major works now.

princeofpounds

..freehold is owned by another company.

Yes thanks, maybe I should have been even more specific - you and your fellow leaseholders are not sharholders of the company that owns the freehold?

foolishboy

princeofpounds wrote: »

Yes thanks, maybe I should have been even more specific - you and your fellow leaseholders are not sharholders of the company that owns the freehold?

No, we are not.