Share of service charge

cowsnhope

Hi
Does anyone know how the division of service charges are worked out? I have just moved into a flat which occupies half of the ground floor of a three floor building with a basement used as storage; I have the back yard. There are five flats and I am paying one third of the service charge which means that if the other flats share the remainder equally then they are paying half what I pay. I do not believe that my floor space or property value can be double theirs as I'd need to occupy the entire floor for this to be the case - but then I do have the yard.

My lease states that I pay one third but the previous owner insisted that she only paid a quarter; I have now had the bill and it is a third.
The bill did come with information telling me that I could dispute this but it seemed to be an expensive process.

Any thoughts or experiences?
thank you

G_M

cowsnhope wrote: »

Hi
Does anyone know how the division of service charges are worked out?.........

My lease states that I pay one third .......

I have now had the bill and it is a third.

You have answered your own question.

cowsnhope

Yes but what is that based on; I'm wondering how they work it out to see if there is any point in challenging it?

G_M

It was contractually agreed between the owner of the freehold at the time, and the original leaseholder.

No, it cannot be 'challanged'. However, as current leaseholder, you could ask the freeholder to vary the terms of the lease, or to recind and replace it .

Let us know how you get on.........

cowsnhope

Thank you G_M

Irratus_Rusticus

Hi. Always your starting point is the actual wording in the lease. They are all different but contain roughly the same stuff. The lease ought to tell you the works and services that the landlord (or their agent) must provide and are entitled to charge for. It will also very probably tell you how the landlord must charge: perhaps half yearly in advance on account or at the year end is common. It'll probably tell you whether the landlord must serve year end certified accounts and, if so, the date by which you must pay or receive a refund if paying on account based on estimates served. Most of all, as you say, it will tell you your apportionment percentage share. The third you mention is a third of the total costs incurred for the accounting year defined in the lease based on accrual accounting: adjusted for creditors, accruals ad prepayments etc. It may or may not include a reserve fund portion for future years depending on the lease.

You say there are five flats and that you pay one third of the total. Check the front of the lease where it should define the whole "development" and the number of flats and describe the common areas and your demise.

Service charges can be different between flats based on different sized demises or other factors such as amenities exclusive to one flat. But it is not unknown for a landlord owner to later divide the property up to make more money and not change the original leases. You can pay £3 a pop for all the lease titles from the land registry and a copy of the freehold title and do a bit of investigating.

Go to the planning dept and ask for copies of the original submissions (the titles will tell you when the leases started). Your conveyancer may likely have the planning and building regs docs as part of local searches. Worth asking.

Nobody can answer your question for certain as it all depends. Ultimately you can dispute liability or reasonableness at your local Tribunal. But don't believe any 'low cost' justice tosh you might read. Nothing is guaranteed in leasehold.

cowsnhope

You say there are five flats and that you pay one third of the total. Check the front of the lease where it should define the whole "development" and the number of flats and describe the common areas and your demise.

Thank you
I am a bit confused about this as my lease does not say how many flats there are but I have a letter from the managing agent to my solicitor saying that there are four flats in total. My confusion is that there definitely appear to be five, mine which is the garden flat, the other one at the front of the building on the rest of the ground floor and three upstairs. I've asked the managing agent for clarification so I'll see what he says.

Irratus_Rusticus

cowsnhope wrote: »

Thank you
I am a bit confused about this as my lease does not say how many flats there are ... I've asked the managing agent for clarification so I'll see what he says.

Why rely on what they say? Go here:

https://www.gov.uk/search-property-information-land-registry

Click 'Start now' , enter you postcode, click Search

There should be a list of titles for your property address in pairs of Leasehold tenure and Freehold tenure. Count them and you have your answer.

Each Freehold tenure will have an "important note" which if you hover over it will confirm the freehold is duplicated (because there are multiple flats but one freehold).

This costs nothing. To be double sure, if you want to spend £3 per title to get a copy of each and see who's who (including if the freeholder has a leasehold too), register for free, repeat the exercise and click 'More info availsble' for the ones you want.

Once you've paid you can download the titles.

cowsnhope

Thank you Irratus Rusticus. I have looked now and this is what I've found (I've changed the building number for pointless privacy reasons but the flat numbers and the 'A's are the same).

30 Leasehold and Freehold
30A Freehold
30 Flat 1 Freehold
30A Flat 2 Freehold / Leasehold (this is my flat)
30 Flat 2 Freehold / Leasehold

All five flats have the note that you can hover over that says the title is duplicated elsewhere.

I'm afraid I'm still confused, The flats upstairs are numbered 1, 2a and 3. The flat out the front is just 30A and mine is 30A Flat 2. So I do not know where flat 3 is ... maybe just 30?? Also I do not know why 30A and 30 Flat 1 just say Freehold. Is it possible to have a building where some flats are freehold and others leasehold and if so what happens when the roof needs fixing?

Thank you - I'm beginning to be a little concerned about this

Winter_Phoenix

This is just a guess, but it looks to me as if the original dwelling house was initially divided into two parts, and renumbered as No. 30 and No. 30A. It's quite possible that 30 and 30A had different freeholders at that point.

Later, No. 30A was subdivided into 30A and 30A Flat 2, while No.30 remained as a single unit. Each of these units was responsible for one third of the service charges.

Later still, No. 30 was subdivided into 30, 30 Flat 1, and 30 Flat 2. Quite possibly at that point, the one-third service charges formerly paid by No. 30 was shared out between the three new units, and to avoid confusion with the downstairs flats, the doors of the new units were marked 1, 2A and 3.

It seems likely that, at some time, the entire building once more came under the ownership of a single freeholder.

Just a guess!

G_M

It really makes no difference how many flats there are.

All that matters is what your lease says.

If your lease says you pay 1/3rd, then that is what you owe.

If the lease says you are responsible for a share of roof repairs, then you are responsible. If it says you are not responsible for roof repairs, then you are not responsible.

It is the lease that determines everything. You bought the lease so you are bound by the benefits, and responsibilities, within it.