Management fees

Monte_C

We own a leashold flat in a block of 8, 4 flats first floor and 4 flats ground floor. When we originally bought the ground floor was an office but the freeholder converted the space in to 4 flats which he owns and are rented. The block is managed by the freeholder's appointed agent. Their fees are about £1700pa however 25% of this is charged to each first floor flat only and the ground floor flats pay nothing. Is this correct? Thanks in advance for any information.

AdrianC

I can't read your lease from here.

But probably. The ground floor space is still likely to be liable for the same proportion of management costs as it was, whether it's an office or four residential flats. Every other flat is unaffected by that change.

Monte_C

Thanks, there's a lot in the lease agreement that needs to be updated. The freeholder owns the four ground floor flats, pays zero towards the management fees and only 8% per flat for all other costs. 

eddddy

Monte_C said:

Thanks, there's a lot in the lease agreement that needs to be updated. The freeholder owns the four ground floor flats, pays zero towards the management fees and only 8% per flat for all other costs. 

You have no rights to get the lease updated. Unfortunately, the legal position is that you bought the lease as it is, if you don't like the terms, you shouldn't have bought it.

...unless the the freeholder voluntarily agrees to change the terms of the lease.

eddddy

However...
You need to read the terms of the lease carefully, and cross reference it to the management fee contract and service charge bills.

For example, is the £1,700 management fee just for the 4 original flats and the original building? If it relates to the management of 8 flats, you should insist that separate bills are required - one for the first floor flats and original building, and another for the ground floor flats.

And you pay 25% of the bill for the first floor and original building. (Did the management fee increase when the block changed from 4 flats to 8 flats?)

Similarly, you shouldn't be paying a percentage of the service charge for anything that isn't in your lease, or didn't exist when your lease was first granted. So for example, you shouldn't have to pay a percentage of the maintenance charges for any new ground floor communal areas.

TBH, if you start challenging the management fees and service charges on the basis above (perhaps at a tribunal), the freeholder might give up and volunteer to change the leases.

princeofpounds

Hi Monte,

Unfortunately the question you are asking is actually pretty complex. Normally leases cannot be varied, and they can contain differing rights and obligations.

However, in some unusual circumstances you can apply to a Tribunal to vary your lease, or leases of other properties in your building. This is a specialist area of law that revolves around a lot of case law, so it's probably beyond people on this forum to help directly. Lease-advice.org may be able to help (they are a government-funded advice service), but you are probably going to have to consult a specialist lawyer. The quick googling I have done suggests that merely having unequal obligations is not in itself sufficient to vary a lease, but there's a lot more than that which needs to be considered. These two links below will get you started:

https://www.lease-advice.org/faq/in-what-circumstances-can-i-apply-to-the-first-tier-tribunal-property-chamber-to-vary-my-lease/
https://www.bradysolicitors.com/brady-blog/lease-variations-are-a-discretionary-right-triplerose-v-stride-case-explained/

I agree with edddy that the most practical thing to do in the short term would be to fully understand your obligations in the lease and make sure you are not being charged for services that are not contained within it.