Freehold flat maintenance

longdistancemum

This is a very unusual set up. Eight purpose built flats 1960s. All sold as freehold. No leasehold. No landlord, no ground rent no service charge. One of the flats owns the grounds and common parts. The deeds for all the flats says the eight owners need to co-operate to share maintenance costs and if they can't agree they need to sort out by arbitration. Over the years the eight owners have muddled through. Mostly owned by landlords as they are  unmortgeable. To do a favour to the flat that owns the grounds and common parts the seven others owners have formed a management company with him, but that doesn't own anything. 
They now need to replace the roof. A flat has changed hands recently but the new owner hasn't become a director and won't agree to share the cost as he prefers the company who provided the higher quote. If they go ahead with the roof how do they get his share from him? Do they need to get some kind of court order before the work starts?

eddddy

longdistancemum said:

....and if they can't agree they need to sort out by arbitration.... 

.... the new owner hasn't become a director and won't agree to share the cost as he prefers the company who provided the higher quote.

Based on what you've said, it sounds like your deeds say that you have to go to arbitration - because you cannot agree.

More generally, the deed you each signed is a contract between the parties.

If one party doesn't pay what they owe under the deed/contract, the other party can sue them for the money in court. Just like with any other contract.



FWIW, I'd have thought the flat owners should get together and restructure the ownership as a single freehold building, with 8 leasehold flats.

The flats should then become mortgageable, and therefore their value would instantly increase.

longdistancemum

eddddy said:

longdistancemum said:

....and if they can't agree they need to sort out by arbitration.... 

.... the new owner hasn't become a director and won't agree to share the cost as he prefers the company who provided the higher quote.

Based on what you've said, it sounds like your deeds say that you have to go to arbitration - because you cannot agree.

More generally, the deed you each signed is a contract between the parties.

If one party doesn't pay what they owe under the deed/contract, the other party can sue them for the money in court. Just like with any other contract.



FWIW, I'd have thought the flat owners should get together and restructure the ownership as a single freehold building, with 8 leasehold flats.

The flats should then become mortgageable, and therefore their value would instantly increase.

Thanks. My question was do they need to go to arbitration before they have the work done? Or can they go ahead knowing that there isn't unanimous agreement for the work.

Some owners want to change to leasehold, or even commonhold, but some don't want the expense of doing this, including the flat that owns the grounds, so it hasn't gone ahead.

eddddy

longdistancemum said:

Thanks. My question was do they need to go to arbitration before they have the work done? Or can they go ahead knowing that there isn't unanimous agreement for the work.

Arbitration is a mechanism for reaching agreement.

I guess you could go ahead and get the work done, then go to arbitration to reach agreement on whether the new owner has to contribute to the cost of the work or not.

But obviously, the roofing contractor will want paying in the meantime - so who will pay the new owner's share until arbitration is complete?

And if the result of arbitration (and/or a court case) is that the new owner doesn't have to pay - who will end up paying the new owner's share?



Typically, whoever organises the work would want everyone's share of the money up-front, before they hire the contractor to do the work - to avoid the risk of somebody (or some people) not paying-up for any reason.

Bookworm225

see if an arbitrator will give you initial advice
answers from a qualified person probably better than well intentioned guesswork from a forum?

Chartered Institute of Arbitrators

https://www.ciarb.org/

martindow

How much more is the higher quote?  As it is going to be split eight ways, if the individual extra  sum is not too great, maybe it would be worth accepting this so avoid a delay in fixing the roof.  By its nature arbitration is not guaranteed to get an agreement and it will take time and money.

longdistancemum

Bookworm225 said:

see if an arbitrator will give you initial advice
answers from a qualified person probably better than well intentioned guesswork from a forum?

Chartered Institute of Arbitrators

https://www.ciarb.org/

Thanks, I couldn't find that so really appreciate the link.