Dispute between co-freeholders - advice gratefully received!

bike999

Hi All

I am co-freehold owner of a converted two storey Victorian terrace house. There are two leaseholders with me owning the ground floor and the other owning the first floor. The other leaseholder is also co-owner of the freehold. I have recently undertaken an extension to the ground floor flat which involved structural works to remove internal walls and extend. In undertaking these works, the builder uncovered substandard original foundations which were causing movement at first floor levels (bulging walls). The foundations had to be improved by addition of steel box frames at significant expense to the build cost. The builder was concerned about the structural integrity of the rear of the building, hence requiring the improved foundations.

In respect party wall agreements the first floor leaseholders waived the need for party wall agreements and provided confirmation they complied with the works.

The extra cost has been borne by myself (c.£10k), however I consider it is a cost to be shared with the freeholder. They disagree and are refusing to contribute. There is no agreement between freeholders as to how costs are to be split, however in the past for roof repairs, these have been split 50/50.

Is there any case law which considers disputes of this nature which people are aware of?
Could I suggest any future roof repair costs are born by the first floor leaseholders and the foundations are dealt with by me?
Is this a typical agreement?
Or should I make an insurance claim for the cost of the works retrospectively?

Any comments are gratefully received!

Cakeguts

Did you provide an estimate of the cost of the extra works to the foundations to your first floor leaseholders? Did you get other quotes for the extra work to the foundations and give them to your first floor leaseholder?

As a freeholder you have to provide other leaseholders with an estimate of the cost of work to be carried out.

It sounds as if you decided to get the work done on the foundations by the builder you had employed to do your extension and updating.

bike999

You are correct. The issue was discovered once the supporting walls had been compromised and much of the first floor was being held up by supports. There was a certain amount of urgency in getting works done. Furthermore, I was not living onsite at the time and the builder undertook the works as quickly as possible to ensure stability. Initially I considered the cost was likely to be small enough that I could incorporate within the overall build costs, but since it is much larger than expected, I cannot afford to pay out of my own pocket.

I appreciate the order of actions is not ideal, but does that prevent any future claim?

lwhiteman88

bike999 wrote: »

Hi All

In undertaking these works, the builder uncovered substandard original foundations which were causing movement at first floor levels (bulging walls). The foundations had to be improved by addition of steel box frames at significant expense to the build cost. The builder was concerned about the structural integrity of the rear of the building, hence requiring the improved foundations.

I can't really advise on the legalities of how the costs should be split but I trust you had advice from a structural engineer and did not just go on what the builder told you?

Steel box frame - sounds like you were completely opening up part of the ground floor and the existing foundations could not take the stability of the opening? The improvement would then be as a result of your works not the existing structure.

Are you certain that the structural integrity did not just become an issue as a result of the works? Otherwise surely every other terrace on the street could have the same issue?

If I was the other leaseholder there would be no way I would just hand over the money without explicit evidence that the issue was there prior to works and would have required fixing regardless of your works. However I am struggling to see that that is the case or that you have any structural report to back that up?

pinkshoes

If the integrety of the building would have been fine without you carrying the extension work out, then I can't see how you can expect the other freeholder to pay.

It sounds to me your building work has caused problems that would have otherwise been fine.

Or are you saying that even if you didn't have an extension, this would have needed doing and was scheduled to be done?

G_M

Since this was structural work to a jointly owned building, before you started work, I assume you obtained your joint-freeholder's consent?

Provided him with full specifications of your plans and obtained his approval for the structural work to proceed?

I assume also agreement was reached as to financial liability for those works, as well as any consequential works that might later be required?

Can you confirm this is the case?

davidmcn

bike999 wrote: »

Or should I make an insurance claim for the cost of the works retrospectively?

Do you have insurance which includes "improving foundations" as a risk?

cashbackproblems

if i was the other freeholder i would not pay a penny for a problem made worse due to your extension and of no benefit to the other owners.

Tom99

[FONT=Verdana, sans-serif]I'm with your neighbour on this. The Victorian foundations have held up the house for 125 years and the day you start knocking holes in it it suddenly needs 10K of work!

[/FONT] [FONT=Verdana, sans-serif]You say that the inadequate foundations have caused bowing of the 1st floor walls which seem a strange indication of subsidence. I would expect cracks in the walls and floor to appear first.

[/FONT] [FONT=Verdana, sans-serif]Even if you could now prove, with an expert report, that subsidence prior to your work was causing ongoing damage and needed repair, your neighbour would rightly expect you to make an insurance claim and, at worst, only be liable for 50% of the excess say £500.

[/FONT] [FONT=Verdana, sans-serif]However the fact you have already carried out work and filled in the hole almost certainly means no insurance company will pay out.[/FONT]

moneyistooshorttomention

I'll join the consensus here - it does look down to you one way or another.

As the other freeholder - my first concern would be that you werent even there at the time and took the builders word for it that the work needed doing. Followed by thinking "...and I didnt get a chance to have a look for myself and see what I think, as they just went ahead with the work".

My second thought would be to think "Even if the builder was telling the truth and not just drumming up extra work for themselves - then how do I know that the building wouldnt have carried on perfectly okay if it hadnt been for OP's work they personally wanted?"

I would say this is down to being between yourself, your builder and your insurance company as to who pays for this - but liability doesnt include the other freeholder or their insurance company from what you say.

I appreciate an unexpected bill that size is a shock - but it does sound like it's your shock and not to be shared with anyone else.

Davesnave

bike999 wrote: »

In respect party wall agreements the first floor leaseholders waived the need for party wall agreements and provided confirmation they complied with the works.

They didn't 'comply' with the works, they consented to you carrying them out as described.

It's debatable whether they laid themselves open to extra cost as a result of the work since none was mooted. Maybe if the work had been halted and the situation explained an agreement might have been reached, because then they'd have had an opportunity to use their own structural engineer to assess the cause. Instead, work proceeded apace, apparently without your builder or yourself understanding the financial implications, or proving that the re was a pre-existing problem.

One also wonders about the competence of your builder. Victorian foundations are typically shallow. While adequate for the job they were designed to do, they aren't necessarily appropriate for the different sort of load bearing a more modern-open plan design might place on them.