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reminder system
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When the freeholder neglects
services and maintenance
 When
a friend bought an investment apartment for investment, she thought nothing
could go wrong. It was in a brand-new block by the sea, and the building
was going along to schedule. But as it neared completion, the developers
disappeared, leaving work unfinished in the common parts.
A few months later, they surfaced briefly to
offer the fourteen flat owners the chance to buy the freehold.
Unfortunately, not enough of them were willing or able to fork out the £4000
each that purchase of the freehold would have cost.
So the freehold was sold over
the residents’ heads to a property company who still did not carry out the
work needed on the building. |
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OVER 50s VALUE FOR MONEY
TRAVEL INSURANCE
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Despite this, each of the residents received a bill for over £300 for
‘retrospective’ service and maintenance from the new freeholders, and were
told that the charges would ‘go up more’ in future. One of the items was a
charge of over £1000 for ‘changing light bulbs’. No services, apart from
occasional cleaning of the common parts, were ever provided. No maintenance
of any kind had been carried out.
The
residents formed an Association and requested documentation to support these
demands, only to be told that the original developers ‘left no paperwork.’
What could they do now?
LEASE,the Leasehold Advisory Service, SAYS:
A big
worry for residents in cases like these is repossession, another is that
interest will be charged on late payments. But they need to be aware of the
following facts.
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Liz Hodgkinson is a prolific author
and journalist contributing to many publications. She has written over 40 books on a wide
variety of topics and has a background in national newspapers. She now falls into the
'later-life' age category and in recent years has started writing for this 'older' market,
and contributes to Saga magazine, among others.
Liz has two sons and four grandchildren. She is divorced and now
lives in London and on the SouthCoast. She has written three books on property matters and
her interests include snooping round other people's houses and viewing showhomes.
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Since
the Housing Act of 1996, landlords cannot bring forfeiture proceedings for
non-payment of service charges unless a court has already ruled that the
charge is due. So this frightening procedure can no longer be used.
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Nor will a mortgage company
any more pay the disputed arrears to prevent forfeiture.
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Leaseholders have a
statutory right to inspect accounts and receipts for charges made, and it
is a criminal offence for the freeholders to fail to comply with this.
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What the residents in a
case like this should do is to pay any charges supported by documentation,
and withhold the rest of the money until proper accounts have been
established. Freeholders cannot just pluck a charge out of thin air.
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The leaseholders could
get a surveyor’s report on the reasonableness of the charges made so far.
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A breakdown must be
provided of works to be carried out in future, with proper estimates and
quotes sent to each leaseholder. Charges can be variable and subject to
increase, but freeholders are not allowed to charge more than is
reasonable.
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If the freeholders are
going to start charging for a sinking fund, they must make this clear as
well.
THE
LAWYER’S VIEW
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Always
move heaven and earth to buy the freehold to avoid this kind of problem. I
can’t repeat this advice often enough.
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Also, it’s imperative in the case of a dispute, that residents stick
together and adopt a united stand. Otherwise, they are at the mercy of
whoever buys the freehold.
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I
suspect that in this case the new freeholder is taking an opportunistic
chance to recover expenditure. But the residents should not pay these
service charges – apart from the ground rent – until the position has been
legally investigated.
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The
residents should still buy the freehold if they possibly can. It’s the
only way of avoiding this kind of situation developing.
Lease: The Leasehold Advisory Service is at:
70-74 City Road, London EC1Y 28J. website:
www.lease-advice.org email:
info@lease-advice.org tel: 020 7490 9580
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