S20 works / excessive quotes

prudence2

I'm one of four leaseholders in a converted house. Earlier this year the managing agent commenced the S20 process for the regular four-yearly external decoration.

The leaseholders, collectively, have been busy/lazy and lulled into a false sense of security by historic costs: over the previous five cycles, the low quotes received have ranged from £1950-£3150 and the high quotes £2300-£4250.

So is came as something of a surprise to be hit with the 'Statement of Estimates' letter stating that they received quotes of £8900 and £10700 and they intend to proceed with the lower quote.

We quickly provided a quote for £4500 from the company who conducted the work in 2013, but this has been rejected on the basis of being 'too late'.

Assuming that the S20 procedure has been followed to the letter, do we have any grounds for rejecting the £8900 quote on cost grounds? It bears absolutely no relation to 'market realities', but appeals to the managing agents' good nature, sense of professional pride, etc etc aren't going well and they're digging their heels in.

It seems wrong that we can be held to a lower quote which is approaching three times anything we've ever paid before, and more than double the highest quote we've ever received.

In the absence of a nomination from the leaseholders, what would our legal position be if the managing agents had returned with quotes of £400k and £500k?

Any advice gratefully received!

[Deleted User]

I would ask them to justify why the costs are in excess of what you were expecting by a considerable amount.

The chances are it isnt a like for like quote and that there is more work needed this time around. You cna always challenge excessive costs but IMO Freeholders / managing agents know exactly what they can get away with.

If I were you I'd speak to the other Leasheholders with a view to setting up an RTM which is the process I am going through at the moment. We all want the property to be maintained but we want to control the costs and rather than paying admin fees and a % on top that money will go towards the upkeep of the building.

prudence2

Thanks for the response, BBH. The wording of the tender hasn't changed; it's generic stuff about rubbing down, applying two coats etc etc. My strong suspicion is that neither of the managing agents' quotes involved actually visiting the property, and even if they had they'd have been unable to access the rear of the building without contacting me. They're boilerplate quotes which basically reiterate the tender: absolutely nothing 'site specific'.

Won't respond further to the managing agents until I've seen more replies (hopefully) and spoken to all leaseholders. The quotes definitely fail to meet 'real world reasonableness' tests, but sadly these sorts of things aren't governed by the real world.

I like the idea of RTM, although the managing agents are infamously disruptive of the process and you're still a leaseholder. The dream is to move to somewhere that's either freehold, or at least share of freehold...

[Deleted User]

I think there is becoming a groundswell of discontent about Leasholds, in years gone by you paid your service charges and got the building maintained.

Nowadays Freeholds are changing hands and often at auctions with a view to [EMAIL="sc@ewing"]sc@ewing[/EMAIL] as much money out of Leaseholders as posslble with the only rights to recourse as lengthy / costly tribunals.

Leases themselves are worded ambigously , ie things like reasonable costs - well who's to say what reasonable is, maintain to a good standard , again whose definition of good standard.

I will never buy a Leasehold again.

[Deleted User]

prudence2 wrote: »

Thanks for the response, BBH. The wording of the tender hasn't changed; it's generic stuff about rubbing down, applying two coats etc etc. My strong suspicion is that neither of the managing agents' quotes involved actually visiting the property, and even if they had they'd have been unable to access the rear of the building without contacting me. They're boilerplate quotes which basically reiterate the tender: absolutely nothing 'site specific'.

Won't respond further to the managing agents until I've seen more replies (hopefully) and spoken to all leaseholders. The quotes definitely fail to meet 'real world reasonableness' tests, but sadly these sorts of things aren't governed by the real world.

I like the idea of RTM, although the managing agents are infamously disruptive of the process and you're still a leaseholder. The dream is to move to somewhere that's either freehold, or at least share of freehold...

Things like rubbing down etc and pulling weeds were part of the things we didnt want to pay for as we can do those ourselves.

Can you ask for a survey to be done if you dont think these things need doing, your Lease sounds like mine, we were told the Lease required external decoration a minimum of every four years so I looked at my copy and it actually says ' metalwork and woodwork ' ie window sills and railings.

Read closely your Lease. Our managing agents billed us for ground rent of £100 but its acutally £50 until 2020.

prudence2

There's a limit to what we can do ourselves because of height, but 'our' quote hopefully reflects the fact that I warned the quoter not to touch my French windows!

The wording of the lease is that the lessor covenants to 'decorate such part of the external walls (if any) previously so decorated and repair the exterior ironwork gutters pipes and woodwork of the building in a proper and workmanlike manner and with suitable materials'.

The tender goes into vast and useless detail (eg 'apply knotting solution to any live knots' and 'remove any mould or growth with fungicidal solution'). It has always included a section on 'ironworks', even though ironworks are a relatively recent addition to the house (thanks to the introduction of Health, Safety & Fire Risk Assessments, but that's another moan altogether).

In reality it's always been a bit of scaffolding, some half-arsed sanding and a slap of paint, which is just the way we like it and I can guarantee that the managing agents' contractor will carry out the work in the most perfunctory manner imaginable.

The four yearly cycle p!sses me off, too: the house is set back 10m from a relatively quiet road, and if the work is done well (as it was four years ago) there's simply no need to repaint so regularly.

Agh!

prudence2

*bump*

Does anyone have anything concrete on a managing agent's responsibility to provide 'reasonable' quotes?

pinkshoes

Do you have the contact details for the other three leaseholders? If yes, set up a WhatsApp or Facebook group so you can discuss it quickly.

If not, get all their details and do the above.

I owned a leasehold flat, and we sacked our managing agent due to them being useless, and getting ridiculous high quotes (their contacts!) for everything.

I can only suggest writing to the managing company (from all four leaseholders if possible) stating that neither of their quotes are competitive, and that the company who previously completed the work (so familiar with what it entails) quoted half their lowest quote. If possible, send them a second and third quote too matching your first lower one.

I would tell them that you do not agree to their excessive quote, so if they go ahead with it, you will only be paying your share of the lower quote that YOU obtained, and they will have to pay the excess from their fees.

I would also ask them to show evidence that these companies who quoted turned up to assess the job before building, given they did not have access...

starving_artist

The freeholder/managing agents are only obliged to take account of your views about the reasonableness of the cost. They can still decide to proceed in spite of your objections. If you believe you can prove the costs are unreasonable you can challenge the freeholder/managaging agents at the upper tier property tribunal. Have a look at the information regarding service charges at lease-advice.org and if necessary speak to an adviser.

prudence2

Hi pinkshoes, thanks for the response. Yep, three of the leaseholders are in regular war council over the issue (the fourth is renting her flat out and has proved to difficult to engage in this sort of discussion).

If the managing agent had provided quotes of £5k-£6k I wouldn't expect to be able to go back to them and submit our £4.5k quote (which to my mind is also rather high, but the company is a known quantity and their work in 2013 was excellent). The S20 procedure has been followed; we simply failed to ask the agents to consider our nominee within the timescale set out.

There *has* to be a price at which the quotes they furnish are deemed to be excessive, and to my mind £9k is indeed excessive. It's completely divorced from market realities; I would reasonably expect the agents to take historic prices into consideration when evaluating quotes, and realise that these latest quotes are unrealistically high. There has to be *something* to force a managing agent to seek 'value' and counterbalance the fact that the higher the quote, the higher their works management fee.

We've expressed an unwillingness to pay £9k for work that should cost no more than half that sum, but I don't think we've established grounds to be able to legally *refuse* to pay. Ideally I'm looking for the leverage of someone telling us that a First-Tier Tribunal would be likely to take our side, should we need to legally dispute the work.

Re the quality of the £8900 quote itself, it contains the line 'This quote is based upon information that you have supplied and observations made at the time of my visit'. Personally I doubt that the property was visited at all, and I'd have thought that 'lack of access to the rear of property' would have been explicitly noted on the quote if such a visit had been made. Adds scope for a bit more 'needling' of the managing agents, I guess!

It's now time for a letter from the three resident leaseholders, rather than chipping away with individual emails. If anyone *does* have anything 'concrete' on a managing agent's legal responsibility to provide realistic quotes (and it has to be borne in mind that this is regular work of a known scope and known historical costs, rather than ad hoc chimney/roof works) then now's the time to tell me!

prudence2

starving_artist wrote: »

The freeholder/managing agents are only obliged to take account of your views about the reasonableness of the cost. They can still decide to proceed in spite of your objections. If you believe you can prove the costs are unreasonable you can challenge the freeholder/managaging agents at the upper tier property tribunal. Have a look at the information regarding service charges at lease-advice.org and if necessary speak to an adviser.

Thanks, starving artist. Have spent hours looking at Lease Advice, Leaseholder Association, Landlord Zone, old LVT findings etc, without finding anything that seems to offer much help.

The core question looks to be: is 'proof' that the same work can be conducted for half the price (and I'm sure we could find <£4k quotes if necessary) the same thing as proving that the £9k / £11k quotes are 'unreasonable'?

The current situation, in which it's in the managing agents' interest to maximise the cost of work and thereby maximise their % take, is bleedin' ridiculous.