Recovering costs from freeholder

guest3

Hi all,

I own a ground floor leasehold flat (4 in converted building) and have been having trouble with the freeholder over the past year or so. Damage has been caused to my flat by water entering the front of the building, and I'd be grateful if anyone could advise how to best go about recovering the costs of this from the freeholder. Here's a summary what's happened so far

• Bought flat ~3 years ago. Flat in good condition but building in generally poor state.
• Let flat ~1 year ago
• ~1 month after letting tenants reported major leak in lounge (at front of building)
• I contacted freeholder immediately (by letter), and multiple times over past ~14 months but no action taken. Damp problems got worse.
• I issued section 22 notice for appointment of a manager via the first tier tribunal (~4 months ago)
• Freeholder finally sent "builder" around to assess damage. Was accompanied by the letting agent managing my flat. (~3 months ago)
• Builder returned without mine or the agents knowledge, gained access via tenants and removed plaster from the walls in my flat (~2 months ago). I still have not been informed of the intended extent of this work despite multiple written requests.
• Freeholder appointed manager in response to the notice I issued (~1 month ago) - they are now surveying the building with the intention to do major works to sort out the leaks and the general poor condition. They have already done some emergency repairs. However, they haven't yet told me what the intend to do about my flat (currently lacking plaster on a number of walls to allow them to dry out).

This leaves me with two expected costs to deal with. Repairing my flat and the major works (amount as yet unknown, but I'm estimating a few thousand per flat).

I am currently thinking if the freeholder/new agent doesn't do anything else with my flat and I have to pay to get it fixed up (about £1000 of work according to my lettings agent) small claims court might be a good way to go? I have good evidence that the damage to my flat was greatly exacerbated by the delays in dealing with the problem (tenants check in report of good condition before first leak, photos from my lettings agent throughout last year of the problem getting worse). I also assume the freeholder's builder entering my flat without knowledge permission leaves them in a bit of a legally dubious situation?

Regarding the cost of the major works and the emergency repairs already completed, as I understand I can apply to the first tier tribunal to assess if these are reasonable? I believe there is a case that the costs will be increased due to years of neglect of the building by the freeholder - am I correct in thinking that the FTT can make the freeholder pay a proportion of the cost? Also, should an application to the FTT ideally be made in advance of the work, or afterwards once all completed and billed?

If anyone has any advice on whether this is the correct way to go about dealing with these problems, I would be very grateful.

Cheers.

chris_aaaaa

The answers are all in the lease, is FH expected to do the work and then recover costs, or do you have to pay in advance?

It is likely that the FH will not do the work until all the money has been paid in.

The FH may not even want to continue until the FTT has pronounced the costs are reasonable, hence avoid the risk of loosing at tribunal later.

If you do go to the FTT be prepared to have your understanding of reasonable severely challenged

Best approach is as LHs to manage your approach to the section 20 process, if you have an erratic/emotional LH get them under control. Have a agreed approach, agree a contractor between you, to make sure MA cannot cherry pick from many LH proposals.

Chase up the quotes etc with your proposed builder to make sure nothing is 'lost in the post'.

You will be amazed by the cost, while the contractors may not be cheap, it is the specification that will be bumping up the price, there is little you can do about that because the FH is free to do anything reasonable to fix the issue, and who can say...

If you do end up in the FTT, take the action in the name of one LH only, this might reduce the legals, but remember to put everyone on the s20c application.

If you choose not to pay be prepared to face a s.146 action, with no limit on legal fees (depends on lease wording, look for recovery of costs in preparation for forfeiture roughly).

There is a govt agency to help called LEASE, proper solicitors and legal advice, give them a try.

I hope you have got an honest managing agent and it all goes smoothly.

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Not advice - see a solicitor.

guest3

Thank you for the reply and advice.

I will check my lease to see if things need to be paid in advance.

I've been reading the lease site about historic neglect and apparently it's hard to prove. But the fact that incation lead to the damage to my flat, which I can easily prove, means it might be possible to offset the cost of that against a later service charge. I think...

chris_aaaaa

Withholding payment is not a step to be taken lightly, while you are paying you can choose your venue and mitigate costs.

If the FH is driving there is no practical limit.

Have a google for examples of people disputing 4 figure sums and paying 5 figure legal fees.

How about paying the SC and using the small claims court for the damages, that gets you away from the FTT which can be erratic and costly.


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Not advice - see a lawyer...

guest3

Yeah I'm thinking that small claims court might work for the damages (although I have no experience of that or the FTT). Regarding the costs of the works, though, I expect the FFT will be the way to go - if it is indeed worth it.

It does seem that the laws are only any use when you can afford to get them enforced...

Thanks again.

Irratus_Rusticus

Hi, as a random pick have a read of this Upper Tribunal case...

Fairburn v Etal Court Maintenance Limited [2015] UKUT 0639 (LC).

Okay, this lands tribunal appeal was about service charges and allowable costs, but the start of the matter was a landlord alleged failing to carry out repairs when a lessee wrote and asked for that repair. Problem appears to have been the landlord did not take steps in a timely fashion to justify refusing to accept responsibility when first written to. Unless I missed something. Even though they eventually did accept liability and the works cost £27K and was applied to all flats, the lessee still sued.

Redoubtable lessee had engaged solicitors, paid for a survey, and issued a letter before action armed with the results requiring the landlord to remedy the matter within a deadline. Only after this but for unclear reasons landlord was still slow to act so lessee sued at county court for damages and even though the work was done on major works, it ended up costing the landlord over £25K in damages and legal costs without ability (due to that lease) to charge back to flat owners.

If you follow the paper trail of cases prior to the above appeal, the background might help you form an action plan.

Entering your flat without prior written notice or your consent was a criminal offence in my opinion.

But you can't act based on forum advice. Should pay a solicitor especially if this might involve large sums winnable or loseable.

chris_aaaaa

If you want some heavy reading, this one came up today, it may give you some clues,

http://www.lawandlease.co.uk/2016/02/12/mansing-moorjani-v-durban-estates-ltd-2015-ewca-civ-1252/

This is a blog from a legal type, she sumarises and adds some explanation.

Chris

guest3

Thank you both for the suggested reading, I will have a look at a few cases and see how they panned out.

One of the practical problems I have at the moment regarding solicitors is not know yet if it's worth it or not. I don't know what the actual costs will be, if they're not as much as I fear it may not be worth pursuing given the potential legal costs.

I'm pretty sure though that the freeholder entering my property and doing sub-standard work (according to an independent survey) won't go down to well in court or at the FTT...

Mokka

We've got a similar problem in our block.

The ground floor flat got flooded. Freeholder told the LH to claim on building insurance. She had to pay £50 excess and got 12K worth of works (including stripping off plaster and replacing flooring).

But nobody bothered to check why the problem occurred in the first place (apart from the leaseholder who had specialist company in to test whether her pipes caused the flooding, who confirmed flooding came from the outside) and it recently happened again. I am guessing no chance of claiming on insurance this time: if the same disaster happens for the second time it's no longer 'an accident' but counts as negligence.

The best course of action for you depends on whether the landlord intends on undertaking the works to remedy the disrepair or not.

If not, you can go to county court and start action for disrepair.

There is a lot of info about this online. Google Disrepair Protocol, start your reading on CAB and Shelter websites and then progress to Leasehold Advisory Service.

THis is only worth doing if the damages exceed 10K or the disrepair is ongoing. Otherwise your legal costs are not recoverable- because your claim will go through Small Claims (this is seriously unfair, but that's how the UK legal system works).

If the damage is serious you could try suing under The Environmental Protection Act 1990- whoever is responsible for the nuisance has to stop it occurring within 21 days.
Check out Annex A in this document:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/7852/142949.pdf

Alternatively, if the freeholder/manager is intending to do the works, and will charge you for the cost of doing them, you can offset your damages against the charges of Major works. You would have to apply to the FTT tribunal to do this. It is always best to have expert report (from a qualified surveyor who can give expert evidence if needed) and having a solicitor helps, although you will not be able to recover your legal costs of proceedings in the FTT (unless FTT decides your Freeholder behaved very unreasonably, but I wouldn't count on it).
Check out this judgement:
http://www.lawandlease.co.uk/2012/09/03/continental-property-ventures-inc-v-white-2006-1-e-g-l-r-85/

You would basically have to apply to the FTT to take off the damages from your Major Works bill. If you have to pay an estimated sum in advance in accordance with your lease you can do this as soon as you get this estimated bill.

Your Freeholder/manager should do Section 20 consultation but if the works are urgent they can apply to FTT for dispensation.

Again- check LEASE website for more info.

Another good website is Service Charge Dispute Guide- although not much info about disrepair on there.

Keep us posted how you get on- I am in the same boat.

guest3

Thank you very much for the advice, Mokka. I'm currently waiting to find out what the freeholder's position is regarding my flat so will hopefully soon know whether he accepts any responsibility and/or intends to fix the damage.

Buildings insurance is something else to consider - is it usually the leaseholder that has to make the claim to the insurer, or does the freeholder do it?