Freeholder responsibilities query

lmdp

Firstly I apologise for all the questions. As mentioned in a previous thread my mother recently died and so I have become responsible for the house she owned. 

It is a building made up of 4 flats (basement, ground, first and second).

Basement and Ground were owned by my mum, now me.

I own the freehold of the entire building, so the first and second floors are owned leasehold.

About 2 years ago mum sold the second floor - they renovated the flat and converted the attic (which I believe they bought from mum) into another floor.

They recently sold this flat. 

When they sold it, I received an email from the buyers solicitor informing me of various things their surveyor had noted as work that needed to be done. I have attached a photo of the the things they mentioned.

I am unsure of whether these things listed would be my sole responsibility as freeholder to pay for, or whether it would split between all leaseholders?

The man who sold the flat, ensured me it would be split but I am not sure, and to make matters more complicated, the first floor flat is in the process of being sold, so I would need to issue a section 20 note of intention regarding these works IF the leaseholder would be expected to pay so that is what I am trying to determine.

It is frustrating as I can't be sure any of the things mentioned in the survey were caused during the renovation of the the second floor. The new buyer has also mentioned the buzzer isn't connected which it was before the flat was sold by my mum!

Jonboy_1984

You would arrange the freeholder actions as the freeholder, and then recover the costs from all leaseholders per any apportionment set out in the leases.

If the works are likely to cost more than £250 per flat you should carry out a section 20 or the costs can be disputed at a tribunal. Something to note is when you carry out a section 20 you dont need to use the lowest price quote but should be able to justify a decision if you choose a more expensive one (e.g. you didn't have confidence in the lowest price contractor).
With larger works like these you can also potentially carry out the consultation and collect funds in advance from the other leaseholders rather than risk being out of pocket.

loubel

You need to read the lease to find out who is responsible for the repairs. If you, you need to decide whether they are necessary at this time and serve consultation notices on the leaseholders if appropriate. If you believe that the leaseholder damaged the building then that is a separate matter as wouldn't come under service charges.

eddddy

lmdp said:

I am unsure of whether these things listed would be my sole responsibility as freeholder to pay for, or whether it would split between all leaseholders?

All (sensible) leases will say that all building repairs and maintenances are split across the flat owners. As there are 4 flats - it might be 25% per flat owner.

I say 'flat owners' and not 'leaseholders' - because you say you own 2 of the flats, but you don't say if you own them as part of the freehold, or on leaseholds.

So there are 4 flats, but it's not clear whether there are 4 leaseholders, 2 leaseholders or some other number.

lmdp said:

The man who sold the flat, ensured me it would be split but I am not sure, and to make matters more complicated, the first floor flat is in the process of being sold, so I would need to issue a section 20 note of intention regarding these works IF the leaseholder would be expected to pay so that is what I am trying to determine.

You don't have to do a section 20 consultation - if the leaseholders are cooperative (and you know the law!)

It's probably easiest to illustrate with an example - maybe a letter to the leaseholders like this:

The lead flashing, down pipe and soffit need repairs. See the attached extract from a surveyor's report.

I have attached a quote from ABC Builders Ltd for £2,000 for these repairs - which equates to a contribution of £500 from you. I would like to proceed with this. If you agree to this, please confirm your agreement by signing the bottom of this letter and returning it to me, and transferring £500 to bank account xxxxxxxxx.

If you (or any other leaseholder) doesn't agree, I will have to do a formal section 20 consultation. This is likely to take some months, and the final cost to each flat owner is likely to be higher.

lmdp

I think I own the two flats on leasehold and the freehold is separately owned by me.

Thank you!

Brie

Can't help really other than to say the bit about the toilet needing a plumber isn't your problem.  Sounds like the last bit isnt' either.

And I can't help but wonder how someone can release a document that has so many spelling and grammar errors in it.  

NameUnavailable

Firstly you really need to read the leases, but it will most probably say that each flat pays a share of the costs.

So, if you own 2 flats, you pay 50% and the others pay 25% each (although it might say something else in the lease wordings).

The leases will also set out what is the leaseholders responsibility and what is the freeholders (although as freeholder the cost for works is always charged back to the leaseholders).

Internal plumbing will the down the leaseholder (the faulty toilet flush).

lmdp

Thank you. My solicitor has said I will need to serve a section 20 notice so just working out how to do this!

HampshireH

You do need to do the section 20 don't just get them to sign something as if they refuse a tribunal will likely say you didn't follow the section 20 process and you run a huge risk of not recovering any costs.

https://www.lease-advice.org/faq/what-is-the-section-20-consultation-process-for-major-works/

eddddy

HampshireH said:

You do need to do the section 20 don't just get them to sign something as if they refuse a tribunal will likely say you didn't follow the section 20 process and you run a huge risk of not recovering any costs.

https://www.lease-advice.org/faq/what-is-the-section-20-consultation-process-for-major-works/

I'm not quite sure what you're saying, or whether you think my earlier post was wrong.

So just to clarify

• If I freely agree to give you £1000 to repair a roof, and you repair the roof
• Or I freely agree to give you £1000 to replace a light bulb, and you replace the lightbulb

...those would be legally binding contracts. I can't later change my mind and ask for some of my money back. No tribunal or court would rule in my favour.


That's straightforward contract law - but it's also reinforced by the landlord and tenant act 1985, which says:

27A Liability to pay service charges: jurisdiction 

(1)An application may be made to [F82the appropriate tribunal] for a determination whether a service charge is payable and, if it is, as to— 
...
...
( 3 )An application may also be made to [F83the appropriate tribunal] for a determination whether, if costs were incurred for services, repairs, maintenance, improvements, insurance or management of any specified description, a service charge would be payable for the costs and, if it would, as to—

...

...

(4)No application under subsection (1) or (3) may be made in respect of a matter which—

(a)has been agreed or admitted by the tenant,

...

Link: https://www.legislation.gov.uk/ukpga/1985/70

So the law is very clear. If the tenant (i.e. the leaseholder) agreed to pay a charge, the the tenant cannot later apply to a tribunal.

And FWIW, it's also confirmed by LEASE:

APPLYING TO THE TRIBUNAL

Both you and your landlord have a right to ask the tribunal whether a charge, or a proposed charge, is reasonable. 
...
...
However, if you have agreed or admitted responsibility for paying the charges, or the charges have been finally decided by a court or tribunal, or by arbitration following a dispute, you and your landlord cannot apply to a tribunal.

Link: https://www.lease-advice.org/advice-guide/service-charges-other-issues/

eddddy

lmdp said:

Thank you. My solicitor has said I will need to serve a section 20 notice so just working out how to do this!

If that's your solicitor's advice, then you should follow it.

But I wonder if your solicitor decided to give you the simpler "one line" option, because explaining the law to you would have taken too long.

In your position, I would only do a section 20 consultation as a last resort, because it's quite "technical" - and if I did some of the technical details wrong - I could lose a lot of money. (Did your mother do section 20 consultations when she was freeholder?)

In fact, I would consider hiring a specialist company to do the section 20 consultation for me. But that will add hundreds of pounds to everyone's bill.

But like I say, you should follow your solicitor's advice.