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  • FIRST POST
    • Jacquetta
    • By Jacquetta 9th May 18, 6:55 AM
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    Jacquetta
    We own the freehold. How can we sack HLM?
    • #1
    • 9th May 18, 6:55 AM
    We own the freehold. How can we sack HLM? 9th May 18 at 6:55 AM
    Hi,

    Our problem is simple, but the solution seems very complex! We are an estate of around 30 homes; half leasehold flats (Walton Homes own the leasehold), and half, like mine, are freehold houses.

    It seems that if all properties were leasehold, we could set up our own management company under Right to Manage. The problem is, as freeholders, Right to Mnage does not apply.

    I have tried, desperately, to change to another company, but HLM think there’s nothing we can do, and continue to provide little, or no service. We are all frequently ignored and only have small requests (like trimming bushes or changing bulbs in the street lamp!)

    I have complained to HLM, escalated it to their management, escalated it to Walton Homes management (who own the private drive we live on) and been completely ignored.

    What on earth can we do to sack HLM and appoint a new agent?
Page 1
    • AdrianC
    • By AdrianC 9th May 18, 8:17 AM
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    AdrianC
    • #2
    • 9th May 18, 8:17 AM
    • #2
    • 9th May 18, 8:17 AM
    I think you're misunderstanding what you actually own. Your house is freehold - and HLM have nothing to do with that. But you also have a lease over the estate common areas, which are leased from Walton, who use HLM to manage.

    You need to read the lease for those common areas.
    • Jacquetta
    • By Jacquetta 9th May 18, 8:32 AM
    • 6 Posts
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    Jacquetta
    • #3
    • 9th May 18, 8:32 AM
    • #3
    • 9th May 18, 8:32 AM
    Ah, ok. So would that mean that we could sack HLM and form our own management company under Right to Manage?
    • eddddy
    • By eddddy 9th May 18, 8:56 AM
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    eddddy
    • #4
    • 9th May 18, 8:56 AM
    • #4
    • 9th May 18, 8:56 AM
    TBH, I doubt that you have any kind of lease over the common areas.

    More likely, you have a contractual agreement to pay estate charges. You need to check the terms of that agreement to see what you are required to pay.

    (Here's a bit of explanation by a law firm: http://www.solegal.co.uk/estate-rent-charges-beware-buying-freehold-homes-private-estates/)

    As you say, as a freeholder, you have fewer rights than a leaseholder.

    On the plus side, there are government proposals to give freeholders the same rights as leaseholders - but that may take some time.

    (See: https://www.boyesturner.com/article/proposed-improved-rights-for-freehold-owners-on-housing-estates-to-challenge-service-charges)
    • rtho782
    • By rtho782 9th May 18, 9:05 AM
    • 1,128 Posts
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    rtho782
    • #5
    • 9th May 18, 9:05 AM
    • #5
    • 9th May 18, 9:05 AM
    Yes, this will be estate charges, you will have no right to challenge them in any way, and they can basically charge whatever they like. If the director of the management company decides to pay his brother £1,000,000 to cut the grass, well tough, you have to pay for it.

    It's an awful system and why I would never touch a house with estate charges tacked on.
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    • NeilCr
    • By NeilCr 9th May 18, 10:00 AM
    • 2,395 Posts
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    NeilCr
    • #6
    • 9th May 18, 10:00 AM
    • #6
    • 9th May 18, 10:00 AM

    It's an awful system and why I would never touch a house with estate charges tacked on.
    Originally posted by rtho782
    I've lived in two and it's been absolutely fine. In both cases the residents owned the freehold and ran the management company (employing an MA).

    I do think you need to do your research, though, into who wins the freehold and how it is run.
    • AdrianC
    • By AdrianC 9th May 18, 10:04 AM
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    AdrianC
    • #7
    • 9th May 18, 10:04 AM
    • #7
    • 9th May 18, 10:04 AM
    TBH, I doubt that you have any kind of lease over the common areas.

    More likely, you have a contractual agreement to pay estate charges
    Originally posted by eddddy
    Yes, sorry - my bad pre-sufficient-tea wording. I was trying to stress that the management of the common areas was simply separate from the freehold house.
    • Jacquetta
    • By Jacquetta 10th May 18, 6:40 AM
    • 6 Posts
    • 2 Thanks
    Jacquetta
    • #8
    • 10th May 18, 6:40 AM
    • #8
    • 10th May 18, 6:40 AM
    I've lived in two and it's been absolutely fine. In both cases the residents owned the freehold and ran the management company (employing an MA).

    I do think you need to do your research, though, into who wins the freehold and how it is run.
    Originally posted by NeilCr
    Thank you. How did you get to run the MA? As in, did you sack an existing one first?
    • moneyistooshorttomention
    • By moneyistooshorttomention 10th May 18, 7:06 AM
    • 17,115 Posts
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    moneyistooshorttomention
    • #9
    • 10th May 18, 7:06 AM
    • #9
    • 10th May 18, 7:06 AM
    Yes, this will be estate charges, you will have no right to challenge them in any way, and they can basically charge whatever they like. If the director of the management company decides to pay his brother £1,000,000 to cut the grass, well tough, you have to pay for it.

    It's an awful system and why I would never touch a house with estate charges tacked on.
    Originally posted by rtho782
    There is a fallback system, as I understand it, of if someone tries to charge an "unreasonable" charge for work - then the home-owners can go to court and the court decides if the proposed charge is "reasonable" or no (and I believe they have information to hand of sample charges to help them judge if there is an attempt to overcharge for any work). So someone can, possibly, get away with going in for nepotism (eg 3 quotes are from their brother, their cousin and their son) - but can't charge more than is "reasonable" - as the legal means are there to challenge them (though the law is still currently awaiting updating to avoid any risk of having to take a managing agent/whoever to court instead).

    That's how it works with unadopted roads anyway - so am guessing it's the same fallback position for an "estate" with "management" in place.
    Last edited by moneyistooshorttomention; 10-05-2018 at 7:11 AM.
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    • NeilCr
    • By NeilCr 10th May 18, 7:28 AM
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    NeilCr
    Thank you. How did you get to run the MA? As in, did you sack an existing one first?
    Originally posted by Jacquetta
    Sort of.

    The builder gave us the freehold. He was running down his business and didn't want any hassles. He is a good guy, still lives on the estate and is one of the directors now.

    We inherited the MA but the relationship was a bit fraught. At a meeting things got heated and the MA sacked us! We then appointed a new one. Over the years they have been taken over a couple of times and we now have a very large company.

    Frankly, they aren't much good. We have given them notice and have a medium size company taking over in June.

    Being in control is great - you can get things done yourself and you can set the budget etc which, obviously, impacts on service charges. But you do have to have the right MA ( finding that is an art) and, if you are a director, residents tend to come looking for you when things go wrong.

    ETA

    Have you, as a group of residents, had any conversation with Walton Homes about obtaining the freehold. I don't know how big they are but I have been involved in two new estates (one flats only, one flats and houses like yours) and both builders were quite happy to let the residents have the freehold. They were both small builders

    The first one (flats only) gave us first refusal for buying. The second one - see above.

    You'd need concerted action, though. In my experience, most residents aren't over bothered about who owns the freehold. In the first development I know, as my friend lives there now, that they can't get anyone to be a director.
    Last edited by NeilCr; 10-05-2018 at 8:12 AM.
    • eddddy
    • By eddddy 10th May 18, 7:40 AM
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    eddddy
    There is a fallback system, as I understand it, of if someone tries to charge an "unreasonable" charge for work - then the home-owners can go to court and the court decides if the proposed charge is "reasonable" or no back position for an "estate" with "management" in place.
    Originally posted by moneyistooshorttomention
    It sounds like you are talking about leasehold service charges, not freehold estate charges.

    The Landlord and Tenant Act 1985 states that service charges for Leaseholders must be 'reasonable'. There is no similar protection for freeholders.

    Hence the government proposals I mentioned in post #4.
    • moneyistooshorttomention
    • By moneyistooshorttomention 10th May 18, 7:47 AM
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    moneyistooshorttomention
    It sounds like you are talking about leasehold service charges, not freehold estate charges.

    The Landlord and Tenant Act 1985 states that service charges for Leaseholders must be 'reasonable'. There is no similar protection for freeholders.

    Hence the government proposals I mentioned in post #4.
    Originally posted by eddddy
    No - the houses in my unadopted road are freehold. So - the fallback position is there of, if the known owner tries to charge an "unreasonable" amount for work - they could be taken to court by us and the judge would decide what was a "reasonable" level.
    Never doubt that a small group of people can change the world.

    It's the only thing that ever has.
    • eddddy
    • By eddddy 10th May 18, 8:10 AM
    • 7,180 Posts
    • 7,130 Thanks
    eddddy
    No - the houses in my unadopted road are freehold. So - the fallback position is there of, if the known owner tries to charge an "unreasonable" amount for work - they could be taken to court by us and the judge would decide what was a "reasonable" level.
    Originally posted by moneyistooshorttomention
    OK - so you and the owner of the road must have signed a deed or contract to that effect.

    The deed or contract that you signed won't apply to the OP.

    What you describe isn't a legal right for freeholders.

    Again, as I said in post #4, the OP needs read the contractual agreement they signed.
    • moneyistooshorttomention
    • By moneyistooshorttomention 10th May 18, 2:33 PM
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    moneyistooshorttomention
    OK - so you and the owner of the road must have signed a deed or contract to that effect.
    Originally posted by eddddy
    Nope...............that's been what my conclusion was from legal type reading after the event when I found out what sort of person the "known road-owner" is, ie old-fashioned and greedy.
    Never doubt that a small group of people can change the world.

    It's the only thing that ever has.
    • kittie
    • By kittie 10th May 18, 4:01 PM
    • 12,446 Posts
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    kittie
    we are a group of freeholders and own a common area between us. We started a management company, officially via companies house and employ an accountant. We entirely self-manage, I am actually chair/secretary and in fact, this year, we have been able to reduce the management fee payable by each homeowner. Some jobs are able to be done by ourselves as a group. We each have a very important share of the freehold, an actual piece of paper
    • NeilCr
    • By NeilCr 10th May 18, 4:07 PM
    • 2,395 Posts
    • 3,344 Thanks
    NeilCr
    we are a group of freeholders and own a common area between us. We started a management company, officially via companies house and employ an accountant. We entirely self-manage, I am actually chair/secretary and in fact, this year, we have been able to reduce the management fee payable by each homeowner. Some jobs are able to be done by ourselves as a group. We each have a very important share of the freehold, an actual piece of paper
    Originally posted by kittie

    Absolutely.

    It's getting the freehold for the common areas etc in the first place that is the trick!
    • Jacquetta
    • By Jacquetta 10th May 18, 4:22 PM
    • 6 Posts
    • 2 Thanks
    Jacquetta
    Ah, ok. So if we can get the freehold off Walton Homes, we could then set up our own?

    The trouble is, we had some hideous covenants etc. written into the deeds, including having to pay HLM 0.25% sale price when we sell our own freehold homes! I can!!!8217;t see they!!!8217;d give all that up easily.
    • AdrianC
    • By AdrianC 10th May 18, 4:28 PM
    • 19,098 Posts
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    AdrianC
    The trouble is, we had some hideous covenants etc. written into the deeds, including having to pay HLM 0.25% sale price when we sell our own freehold homes!
    Originally posted by Jacquetta
    TBF, you would have been well aware of that when you bought.


    Or, rather, you should have been. Lemme guess - you used the developer's "recommended" solicitor, who "forgot" to mention it?
    • NeilCr
    • By NeilCr 10th May 18, 4:32 PM
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    NeilCr
    TBF, you would have been well aware of that when you bought.


    Or, rather, you should have been. Lemme guess - you used the developer's "recommended" solicitor, who "forgot" to mention it?
    Originally posted by AdrianC
    Not sure how this helps

    The OP is where they are and are seeking advice on how to progress. Being told this is what you should have done doesn't add much

    OP. Yes getting the freehold is the trick, here. But you need to be fairly united, as a group of residents.
    • AdrianC
    • By AdrianC 10th May 18, 4:45 PM
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    AdrianC
    It doesn't help the OP move forward, no. But nor does complaining about the covenants. They are what they are, and they aren't changing.

    But it might help others reading this thread in the future realise exactly why developers "recommend" solicitors. It's not to be helpful to the buyer.
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