management company power

marc3

We are in a house of multi occupancy and pay a monthly service charge/ management fee.
we own our flat on a long lease

there are some essential and less essential on-going repairs required to the property, which as leaseholders;we would get only marginal benefit from but appreciate that the property needs to be kept in good order.
these have been progressing steadily over the last 18 months and almost finished
all of a sudden the management company has advised that significant more work needs to be done,and they have given three months notice that they intend to increase the monthly service charge from £60 to £240 to cover what they regard as essential repairs to the roof and get the works done.(they have put in writing that it is a temporary increase for 20 months and then it will revert to £80 .
the owners have had a bit of an informal meeting and two say they are happy to pay.two of us think that it is unreasonable to increase it by that amount, no matter how supposedly urgent the works are (they say that two surveyors have vouched for the urgency )
the management company are being nice and a bit apologetic about it,but point out that the man company rules which we wwere provided with at time of purchase, allows them to do this but even so; it just does not feel right .
and frankly we cannot afford such a large increase..


my husband knows an estate agent,and he has had a look at our lease , and has shown us the section where whilst a management company and fee is mentioned, it says that the monthly fee needs to be reasonable and practical.
He also says that a lease is a more powerful document than a service contract agreement ,and thus if we are unhappy with the fee,we can simply refuse to pay it on basis that it is unreasonable no matter how supposedly urgent it is to get the work done.

[B]my question is therefore-is a lease more important than a service contract and can we simply tell the service agents that we can't afford that amount,think it unfair and our lease in effect overrides anything they want to do if we do not agree ?
[/B]
thanks for any help

eddddy

I guess the key question is, do you agree that the roof needs further repairs? (Or is there another problem, like the contractor's quote is too high?)

If the roof needs repairing, then I guess the money needs to be collected from the leaseholders.

Realistically, if the money isn't collected, the roof won't get repaired. If the roof is leaking, the longer it is left, the more damage will be done. And therefore repair costs will increase.


(TBH - I would have expected the freeholder to follow the section 20 consultation process, rather than increase monthly charge. You might want to query that. But whatever way it's done, the leaseholders would ultimately have to pay for the repairs.)

bris

Find out what needs done and get your own quotes to give you a ball park figure, x it by the amount of £240 they will collect and see the results for yourself.

princeofpounds

The lease is not 'more powerful' than a management contract. It isn't top trumps. They both have full validity (to the extent they are drafted in a valid manner).

But the lease might often be regarded as more 'fundamental' given lots of statutory law relates to it, whereas the management contract is just an ordinary commercial contract.

What this practically means is that if you fail to meet the lease terms, the consequences are more serious than being in breach of contract. However, you do not want to be in either situation.

Are there only four leaseholders? And who exactly is the freeholder? And who appointed the managing agents - presumably the freeholder?

If something serious does need doing to the roof then I am afraid I disagree that this is a disproportionate charge. 20k does not go far for a new roof and the managing agents and/or freeholders have little responsibility to finance it to smooth your repayments. You need to be realistic about how much things can cost in the real world.

If I were you, I would focus on the following:

- do the repairs actually need doing?
- is the cost in line with market values?
- has the managing agent followed the correct consultation procedures under law?
- would it make sense for the leaseholders to invoke a right to manage procedure or even enfranchisement?

Breach of contract and lease are worth looking into but it is a red herring to concentrate on 'reasonable and practical'.

Reasonable doesn't mean 'means I can still buy my latte every day'. Not having your roof cave in is reasonable.