My aunt's maintenance bill is going up by £6,000 in December.

eddddy

spoovy said:

A bit late now granted, but aren't there insurance products available for leaseholders in such circumstances?  Owning a freehold house wouldn't be much fun without buildings insurance.

No. Buildings insurance covers damage caused by incidents like fire, explosion, flood, storm, collision by a vehicle, a falling tree, theft, etc.

Buildings insurance doesn't cover general maintenance, or repairs required due to age and/or wear and tear.

(If your freehold house needed roof repairs, or brickwork repairs, or woodwork repairs because it's old - none of that would be covered by buildings insurance.)

Jonboy_1984

spoovy said:

A bit late now granted, but aren't there insurance products available for leaseholders in such circumstances?  Owning a freehold house wouldn't be much fun without buildings insurance.

Service charges are for day to day running costs such as communal area cleaners, gardening, electricity etc etc.

Section 20 is for larger repairs such as replacing communal doors/windows, redecorating,  brickwork repairs.

The service charges do cover buildings insurance but this is, like home insurance, for one off Unforeseen events such as fire and flood etc and not routine repair and replacements of wear and tear items and deterioration.

Some estates have a sinking fund that collects funds each year towards section 20 type repairs so that a kitty is available and the impact reduced. Some estates (especially seemingly housing association and council estates) don’t.

NameUnavailable

GDB2222 said:

The thing is, even owning a freehold house doesn’t make the owner immune from urgent maintenance bills. Our boiler broke down and it cost over £3k to replace it. We had a small leak, and the plumber was £200+ and the making good could be £500. It’s just ongoing. 

Yes indeed, things happen and need to be repaired. As a freeholder you can decide when to do the work, who to use or to do it yourself if you're able. As a leaseholder you have to pay your management company who will farm the work out to their chosen contractors and charge you typically 15% commission on top of the charges. Yes you can challenge fees or work you think are unreasonable but that also costs money to do, with no guarantee of the outcome (and most leases allow for the freeholder to charge their legal fees back to the leaseholders under the service charge).

GDB2222

NameUnavailable said:

GDB2222 said:

The thing is, even owning a freehold house doesn’t make the owner immune from urgent maintenance bills. Our boiler broke down and it cost over £3k to replace it. We had a small leak, and the plumber was £200+ and the making good could be £500. It’s just ongoing. 

Yes indeed, things happen and need to be repaired. As a freeholder you can decide when to do the work, who to use or to do it yourself if you're able. As a leaseholder you have to pay your management company who will farm the work out to their chosen contractors and charge you typically 15% commission on top of the charges. Yes you can challenge fees or work you think are unreasonable but that also costs money to do, with no guarantee of the outcome (and most leases allow for the freeholder to charge their legal fees back to the leaseholders under the service charge).

I totally agree. On the other hand, the management company just see to it, whereas I have to find a contractor to do the work. As an example, it took me nearly 20 phone calls to get a plumber able and willing to do the job I needed. And the chances are that the management company will have ongoing work for the contractor, so that any snags will be dealt with reasonably promptly. The number of people on this forum complaining about building work going wrong… 

I did see a sign in a block headed 'The £100 light bulb.' It was asking fellow leaseholders not to call the management if a light bulb broke and needed replacement, but to DIY it. By the time the management have called out a handyman to do the job, it probably will cost £100. So, there is room for a bit of common sense and community spirit. 

eddddy

GDB2222 said:

I did see a sign in a block headed 'The £100 light bulb.' It was asking fellow leaseholders not to call the management if a light bulb broke and needed replacement, but to DIY it. By the time the management have called out a handyman to do the job, it probably will cost £100. So, there is room for a bit of common sense and community spirit. 

I agree.

Part of the issue is that Management Companies are "spending other peoples money" and they might be liable if they make  "a bad decision".

For example, if some tiles slipped on my roof - I might pay my mate George £150 to fix them. I'd hope that George would do a good job, but accept the risk that he might not.

A management company wouldn't work like that. They would often want written quotes, details of public liability insurance, references from previous clients, details of qualifications of the employees, a warranty, etc.

And the type of roofing contractor who would pass all those tests might charge £1000 for the job.


FWIW - I had a really good painter/decorator to redecorate a flat. The management company asked her to quote for redecorating the communal areas. But they gave her a multi-page application form which she said would have taken her hours to fill in - with no guarantee of getting the work. So she didn't bother.

Civic2056

Ok so update.

My aunt says the neighbours plan is when they supposedly recieve this notice of  an increase in December, they will pay to have an independent surveyor survey the brickwork (they believe this is what the cost will be for).

My dad who works for C.A.B actually laughed at their idea, and said it's the management company's job to prove they have got a range of quotes, and they have to show these to the residents. 

The managment is dodgy, they give contracts to relatives etc, the alcie tenant i think I mentioned is a brother or cousin of one of the management head-honchos, who gave him the flat in the first place.

My dad also pointed out that my aunt should have 50% equity in the sale of the property when she bought it , so worst case scenario she can use this.

I'm no expert on construction but I find it hard to believe it will cost around £48-50K for the brickwork to be done, and also, surely if it's not essential there is an argument that it shouldn't be done? A legal one, perhaps?

I am going to talk to my aunt myself because she is not good with money and there's no point in paying an independent surveyor potentially hundreds if not a thousand plus for something the managment should be able to prove for free.

Ath_Wat

I don't think a quote of 50K for "brickwork" is inherently unreasonable in a building presumably big enough to contain 8 flats, but that of course entirely depends on what "brickwork" means.  It's clearly a one-off, if this is the case.

What makes you believe it is not essential? If it is essential of course the option may be doing nothing and having the building fall down.  There's no difference between this and finding yourself with a £6K maintenance bill for a house you own - not at all unusual or unlikely.

Bottom line, you need to find out what is actually being done.  There's plenty of scenarios where this could be perfectly reasonable and plenty where it could be a rip-off.

Civic2056

Ath_Wat said:

I don't think a quote of 50K for "brickwork" is inherently unreasonable in a building presumably big enough to contain 8 flats, but that of course entirely depends on what "brickwork" means.  It's clearly a one-off, if this is the case.

What makes you believe it is not essential? If it is essential of course the option may be doing nothing and having the building fall down.  There's no difference between this and finding yourself with a £6K maintenance bill for a house you own - not at all unusual or unlikely.

Bottom line, you need to find out what is actually being done.  There's plenty of scenarios where this could be perfectly reasonable and plenty where it could be a rip-off.

Oh of course, yes you could be in your own home and find yourself with an unexpected bill like this. The difference is is that the management company has been less than transparent/honest in the past and there is annecdotal evidence of cronyism as to where contracts are being awarded to for previous work, and even housing tenants. Yes, I don't know what they mean by brickwork so I am going to probe this more, but ultimately they don't find out until December. If it's something like the building is structurally unsound because of the brickwork, well that raises more questions than answers, if it's just they want to make the building look nicer, that's not really essential and good value  for money. And obviously if it was your own house/building, you would get the cheapest/best value deal, without compromising on the reliability or trustworthiness of the contractor. That's why she and the other tenants need to insist on seeing evidence of the company actually going out to secure quotes, and not just asking one person and giving the contract to them

eddddy

Civic2056 said:
That's why she and the other tenants need to insist on seeing evidence of the company actually going out to secure quotes, and not just asking one person and giving the contract to them

The section 20 consultation will provide that evidence.

Civic2056 said:

.. surely if it's not essential there is an argument that it shouldn't be done? A legal one, perhaps?

The law says that all maintenance costs must be reasonable.

If there isn't a good reason to do the work - it's not reasonable to do it, and therefore it's not reasonable to charge the leaseholders.

Civic2056 said:

... there's no point in paying an independent surveyor potentially hundreds if not a thousand plus for something the managment should be able to prove for free.

The management company will probably appoint a surveyor - but it won't be free. The costs will be passed on to the leaseholders.

The question will be whether you agree with the freeholder's surveyor - or you want to hire your own surveyor to challenge the freeholder's surveyor.

DE_612183

surely the management company should have a sinking fund to cover this?