Service / maintenance charges on leasehold apartment

frosty12345

Hi, your advice please regarding an apartment that I already own.

The apartment is leasehold. It was built in approximately 2006/7. It is over 18 metres tall. The building consists of between 60-70 apartments. It is in a development complex of a few other buildings. In total there are approximately 250 apartments (& leaseholders) with similar concerns.

Simply; it feels like the leaseholders are being ripped off.

The service/maintenance charges are extortionate. (The budget for the building of 50-60 apartments in 2016 was ~£80k. In 2020 the budget is ~£150k).The actual quality of the work (when performed) is abysmal. There are safety concerns that have been known about for years (quite possibly existing since the building was constructed) that have been left untreated. The "accounts" for the last few years have not been published, therefore there is no transparency with regard to what is being charged. There are numerous "layers" of companies involved. In "providing" this "service" on behalf of the freeholder. All of whom have the same/similar directors.

Due to fire safety concerns, the apartment cannot be remortgaged or sold via a mortgage (cash buyers only). (I took out the mortgage before the safety concerns came to light).

Recently the fire alarm system has been upgraded as it was deemed insufficient by the fire service. A "walking watch" has been in operation for at least the last 6 months while the fire alarm system was being inspected / quoted / installed etc. This is at a significant cost to the leaseholders. It doesnt seem right that rectifying this, what seems to me a building defect, is a responsibility of the leaseholder - isnt it the builder or the freeholder?

It feels like there are no options available to me apart from just to pay whatever is demanded of me for service & maintenance charges.

A few other leaseholders have made "payments under protest" (an accompanying letter that states that they disagree with the charges but have paid them regardless). I'm not clear about under which situation the payments could be refunded.

I did discuss it with our local Citizens Advice officer. I was put in touch with a local "accomodation law charity". But they said its not really the work that they do. Mostly they help people who are being evicted etc.

I did contact another solicitor but their charges were > £2000 to review some documents and provide some initial advice. With further costs on top if it could be taken further / or further investigation work was required. I don't mind going down the "solicitor route" if overall it will cost me less. The advice I was given was that each lease needs to be reviewed on a case by case basis. (Therefore I assume for each leaseholder independently to get and pay for legal advice).

A few basic questions;

Is there anything I can do other than "just pay it and forget it"?

What help is available to me?

Thanks for reading!

davidmcn

frosty12345 said:

Recently the fire alarm system has been upgraded as it was deemed insufficient by the fire service. A "walking watch" has been in operation for at least the last 6 months while the fire alarm system was being inspected / quoted / installed etc. This is at a significant cost to the leaseholders. It doesnt seem right that rectifying this, what seems to me a building defect, is a responsibility of the leaseholder - isnt it the builder or the freeholder?

Lots of pre-Grenfell constructions aren't going to comply with post-Grenfell requirements. That doesn't mean they were "defective" at the time they were built. Even if they were, and you had any warranties, they're almost certain to have expired by now. There's no obligation on freeholders to meet the cost of upgrading fire safety measures.

blue_max_3

My very limited experience of being a leaseholder meant any objection was legally fought at my expense. So, I was paying twice!
My only advice would be to try and get all parties involved to raise a mass objection.

bouicca21

What does the lease say?  Have you asked to see the accounts?

eddddy

Things the law allows you to do include:

• Get together with the other leaseholders and buy the freehold (it's called collective enfranchisement). See: https://www.lease-advice.org/fact-sheet/collective-enfranchisement-buying-freehold-building/

• Get together with the other leaseholders and set up a Right To Manage company to take over management of the building: See: https://www.lease-advice.org/advice-guide/right-manage/

• Pay the service charges under protest, and then challenge them at a tribunal. See: https://www.lease-advice.org/advice-guide/service-charges-other-issues/

• Ask the freeholder for a summary of the service charge account, and ask to see detailed invoices, receipts accounts etc:  See: https://www.lease-advice.org/faq/how-can-i-find-out-what-my-service-charge-is-being-used-for/

And the law states that service charges must be 'reasonable'. So for example...

• If you think it is not reasonable to have a 'walking watch' or a new fire alarm system, you can challenge that at a tribunal
• Or if you agree that it's reasonable to have a 'walking watch' or a new fire alarm system, but you freeholder is over-paying for them - you can challenge that at a tribunal

NameUnavailable

You need to get enough other leaseholders together to share the cost of taking the freeholder to tribunal for unfair charges, but you also need to prove that those charges are unfair, which is the difficult part.

Right to manage is possibly an option but then you have to be willing to do the management work or farm it out to another management company (and pay their costs).

The accounts and receipts must be made available to you by law, so press them for this information (if you do go to tribunal it will be something in your favour if they don't provide the accounts).

The problem is doing anything is going to cost you money, lots of money. At least £15K for a solicitor to bring your case to tribunal. If you win you still have to pay the legal costs AND possibly the legal costs of the freeholders (read your lease). So you might 'win' a victory and save £1K off your service charge but it might cost you £30K or more to do so.

As you have a lot of fellow leaseholders getting a group action together is your best bet, but are you willing to lead it and do all the legwork? Even with the same interestes and aims, dealing with lots of other people and their points/objections can be a bit of a mare.

BernieW

You could also ask the First-tier Tribunal to appoint a Manager; i.e. a manager who is effectively a Court officer - not on the side of the freeholder nor the leaseholders - professional and impartial.
Bernie Wales

AdrianC

frosty12345 said:

Due to fire safety concerns, the apartment cannot be remortgaged or sold via a mortgage (cash buyers only). (I took out the mortgage before the safety concerns came to light).

Recently the fire alarm system has been upgraded as it was deemed insufficient by the fire service. A "walking watch" has been in operation for at least the last 6 months while the fire alarm system was being inspected / quoted / installed etc.

You may have heard something in the news a little while ago that will give you a hint as to why there's so much more focus on fire safety in large blocks...

This is at a significant cost to the leaseholders. It doesnt seem right that rectifying this, what seems to me a building defect, is a responsibility of the leaseholder - isnt it the builder or the freeholder?

Doing the work is the freeholder's responsibility. As for paying for it... well, that bill has to land somewhere... and that's the leaseholders.

It feels like there are no options available to me apart from just to pay whatever is demanded of me for service & maintenance charges.

That's what you agreed to by buying the lease, yes. It's all in the lease.

A few basic questions;

Is there anything I can do other than "just pay it and forget it"?

https://www.gov.uk/leasehold-property/leasehold-disputes Is there a residents' association for the block? If not, get one formed.

What help is available to me?

Are you an owner-occupier or is the flat let? There are two things that make me suspect the latter - one is that your wording seems quite careful, the other is that you don't actually seem very worried about the occupants of the building being burnt alive...

BernieW

What help is available to me?

The government has allocated £1b ... yes, that's billion not million ... to help with replacement of dodgy cladding.
I suggest you contact your property manager at the landlord's managing agents and ask what they're doing to tap into that fund.
Bernie Wales

wusher

Yes - we know about the £1bn allocation and the rqmt for a "waking watch" (currently they want £21000/mth between all owners approx 120) This "waking watch" company was formed quite recently by the landlord (freeholder) who has done this on numerous occasions for the maintenance etc and the maintenance company will not consider anyone else! 
Alos the alarms need upgrade as previous comments and lo and behold, will take approx 48wks to complete and we again have to foot the bill.
The landlord treats the maintenance sink fund as his own, and we have an owners right to manage company but the landlord refused to sign this on completion of all the building  works witout us agreeing to a boundary change which allowed him to own a piece of land and develop it, contrary to the original specs etc. We took him to court but funds dried up and were forced to comply and he still has not signed!