New Leaseholder company trying to pass £20k charge to residents - UPDATE

Keithmac said:

I think thats the best way forward myself.

We got messed about when buying our first house (dropped through in the end), by the time we found our 2nd house they'd gone up £10k at least, nearer £20!.

Worste case take a loan out of Home Improvements, should be 3% or less apr on 20k and jiggle finances around to suit.

Can't beat owning your own house .

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Or your own lease. Good luck I hope you get it sorted.

Notch7 said:

What the other residents say?

Are they just goint to pay up, or are they just sticking their heads in the sand and hope the problem will go away.

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Both I think. 28 properties and about 12-13 are owned by actual people. Most of those have no plans to move and don't seem too bothered, so I guess their plan is to just pay the cost over 10 years or whatever the deal is and forget about it.

There are about 3 of us who are more heavily invested in the process:

- Me/my partner who are desperate to move and move on with our lives, have children etc...
- Next door who have a young baby but also would like to move at some point soon
- A guy who rents out a property but has done quite a bit in terms of fighting this

...

I have had a property lawyer recommended and I sent an email to them tonight. I gave a high level overview of the issues and asked if he could help.

This may be a non-starter but just depends on the costs really. As stated, I will be going back over this thread when I have a clearer head and more energy

Thanks

redrabbit said:

I have had a property lawyer recommended and I sent an email to them tonight. I gave a high level overview of the issues and asked if he could help.

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I suppose you first need to find out whether the lease allows the new management company to demand such high charges.-your property lawyer should answer that.

If the lease does allow it, you then need to find out if the work needs doing -that needs a surveyor to do a report.

And finally whether the quotes are fair.

What do you know about the new company?
If they are limited, have a bit of a dig and see if you csn find out as much as you can about the directors. I always find building up a picture of the business you are dealing with can be useful.

Ok thanks for the update..

1. Do you pay a maintenance fee/charge? You say they are responsible for maintenance, but haven't done it. If you pay a fee, they are obliged to perform the service. You might have an angle that they are in breach of the lease and you are seeking a significant contribution/discount/damages to the proposed work, to take account of their breaches. As its a deed, you can go back 12 years.

2. The other angle is to notify them that the proposed works are excessive and would not be required if the building had been properly maintained as per the lease.

3. (how many years left on the lease - If less than 80. Notify them that given the market value and remaining length of the lease, their proposes works do not make economic sense and are simply unaffordable. However, they'd make more sense if they would extend the lease FoC at the same time. This will increase the value of your property to go some way to offsetting the costs.

I have a telephone call booked in tomorrow with a property lawyer so I will see what they make of it and what initial advice they have.

Notch7 said:

I suppose you first need to find out whether the lease allows the new management company to demand such high charges.-your property lawyer should answer that.

If the lease does allow it, you then need to find out if the work needs doing -that needs a surveyor to do a report.

And finally whether the quotes are fair.

What do you know about the new company?
If they are limited, have a bit of a dig and see if you csn find out as much as you can about the directors. I always find building up a picture of the business you are dealing with can be useful.

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The lease is very vague and ambiguous, it says that a proportion of the costs for work to the outside will be my responsibility. I asked them "what does proportion mean", and they said that it means I will pay for all of the repairs/work to my property which is a proportion of the row of houses in our street... weird.

I haven't even seen the quotes yet - part of the Section 20 process I want to check is that at stage two are they legally bound to share them as they haven't done so. Maybe that's because they have not accepted the quotes or at least the companies offering to do the work.

I did some research on them and agree, it can help a lot actually. The director is new in post and only been there about a year.

motorbiking said:

Ok thanks for the update..

1. Do you pay a maintenance fee/charge? You say they are responsible for maintenance, but haven't done it. If you pay a fee, they are obliged to perform the service. You might have an angle that they are in breach of the lease and you are seeking a significant contribution/discount/damages to the proposed work, to take account of their breaches. As its a deed, you can go back 12 years.

2. The other angle is to notify them that the proposed works are excessive and would not be required if the building had been properly maintained as per the lease.

3. (how many years left on the lease - If less than 80. Notify them that given the market value and remaining length of the lease, their proposes works do not make economic sense and are simply unaffordable. However, they'd make more sense if they would extend the lease FoC at the same time. This will increase the value of your property to go some way to offsetting the costs.

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1. I pay £30 a month. They claim the work is NOT due to neglect and they have maintained it. The argument I have is where are these records? I have asked on three occasions for them but have not yet received them despite them agreeing we could all review.

2. Yea that is our argument pretty much. Many saying they have notified them a number of times about guttering and drainage issues but they have not fixed them. Also how can a balcony get so bad that it is not safe for someone to stand on? They sent out letters to residents saying "Do not stand or use the balconies"

3. I think it's more than 80 years, can't remember the exact figure but when I sold (before it fell through) we checked this.





ONE OTHER UPDATE

A neighbour emailed the Senior Surveyor from the Property Investment Team asking some questions

QUESTION: If properties have been maintained as required, why is the structural failings of the balconies and porches not covered by insurance?

ANSWER: The found defects within the timber balconies can be attributed (but is not fully exhausted to) to again various issues; poor maintenance carried out; poor flashing details of the doors and windows; inadequate attention to construction detail and poor quality of materials used at the time of construction; inadequate sloping of the balcony to allow rainwater to drain off; lack of properly installed mastic sealant and oddly, the installation of mastic where it did not belong. In this instance, the mastic installed can prevent water from being drained away and allows it to be held with the timber structure. The proposed installation of the Juliet balconies will remove the on-going maintenance and cost requirement of the current design.

So aren't they admitting here then that it was construction issues and poor maintenance (that's in black and white) that has partially led to the balconies deterioration.

**UPDATE**


I spoke to a specialist solicitor today who told me that:

- They can offer lots of different services, general advice, to speak to Silva Homes, to review the lease, etc... it just depends what we want
- I said that reviewing the lease may help to understand from a legislative point-of-view what it means in real terms
- Improvements to the building are generally NOT for the leaseholder to pay unless the lease states that specifically - and that is unusual (relevant as they appear to be improving the cladding and the guttering)

- The fact they are ignoring quite a lot of emails and basic questions is good if we want to argue that their level of service/care is below acceptable standards - especially as they have STILL not provided copies of repair records or answered the question about interest free payments. They said it would be 5 years interest free but did say that was "too aggressive" and would look at other options... still no news.

- There is case law if the S20 process takes too long. Guidance online states that this process should take months not years and that if it takes too long then they can not reclaim costs from leaseholders
- She said we are at Stage 2 and legally we should have copies of the quotes, the building companies approached and what work has been quoted for
- The solicitors charge £250/hr approximately


At this time I still do not know what they have asked the building firms for, what work have they quoted on, what is being suggested? All I have is a loose list of 7-8 things which is things like "Replace cladding, replace porch"... so unclear

.......................

Our Lease

Our lease states the following:

• To repay the council any expenditure (or an appropriate proportion thereof) for carrying out the following works:

• In the event the council carrying out repairs or maintenance to any services to repay the council the full amount of expenditure reasonably incurred by the council in carrying out such repairs and maintenance

• It is hereby agreed that the expenditure (or an appropriate proportion thereof) referred to in section 3.1.4 (this is the list of above - windows, porches, cladding, etc...) and the proportionate part of the cost of painting the property and the building together with any sums payable by way of improvement shall not be included in the estimate of expenditure mentioned in section 1 (just says I have to pay them a yearly service charge).

• The service charges paid refer to day to day repairs, landscaping charges, estate manager officer and management charge

I don't believe that would cover improvements.

FEW UPDATES

- Freeholder (Silva Homes) held a meeting with residents in July
- At the meeting the new surveyor (who does appear genuine and decent) said they admit that they have been really poor with communication
- They also stated that they are willing to talk at some point about payment caps and sharing of the costs
- The original announcement of the works in August 2018 was made too early (this caused the chain on my new house to collapse meaning we are stuck here)
- The work they are planning WILL be started in November and WILL be finished by 1st April 2020 - that is because they have all the money allocated and ready

- We were originally told the cost would be £15k - £20k.... then we were told £10k-£12k
- The new surveyor says these were incorrect and not based on any real quotes, and are therefore unreliable and not right
- As a result we don't know what the cost will be, not even a rough figure

- In June they went out for two formal quotes. These were much higher than expected (they did not provide documents or figures of this)
- They increased the scope of project - they admit they did not consult leaseholders about this

- In August and September they went to 6 new companies to ask for quotes
- They sent a letter yesterday saying only 1 responded with a quote - don't know why only 1 gave a quote
- As a result they can't go ahead as they don't have enough invoices to know if this is a good quote or not
- They are going to reduce the scope and go back out to try to get more quotes from building companies

This means that

- Since August 2018 we have been waiting and waiting
- We have twice gone back on market to try to sell but after about 40 viewings, no offers we have withdrawn
- We did reduce from £220k down to £200k but still no offers

- We still don't know exactly what their plan is, what is the scope, they keep changing it
- Two previous figures given were incorrect and inaccurate. Will this cost us £10k, 20k, 5k, 50k, 34k...I don't know and haven't a clue
- This work that we were told would begin in April 2019, and then May 2019 has not started. They then said it would start in November 2019 and be completed by April 2020. This won'th appen.

The surveyor is willing to meet with us individually and is good. Up until he arrived they just ignored most emails.

I will meet him but I want to meet the Chief Executive and Board members. they are the decision makers. How much longer will this go on for?

My point is, just reduce the scope to fundamental/important things and get it done. My Partner and I are struggling a bit with this as we both want to start a family but we want to move first. We are suffering a little mentally from this as it's just a seemingly never-ending process with no light at the end of the tunnel

Have you considered collective enfranchisement?

motorbiking said:

Have you considered collective enfranchisement?

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It's not really an option unfortunately. We are not in a block of flats, it is two streets involved in this project. The freeholder owns 8000 properties in the town.

About 30% of the leasehold properties in my street are tenants, renting from the freeholder.

Others haven't got any money and to be honest it's been quite a challenge to even arrange meetings with some of them.

Thanks for the suggestion though

What about those in your block so to speak. How do they feel?

Have you tried responding to their notices with a simple rebuttal that you do not agree to any works or costs that extend beyond your obligations in the lease and insist they drop any plans not provided for.

The balcony issue may be a breach of lease. They cannot restrict access to the parts of the dwelling covered by the lease without compensation.

Let them make the argument it’s provided for. They seem chaotic.

motorbiking said:

What about those in your block so to speak. How do they feel?

Have you tried responding to their notices with a simple rebuttal that you do not agree to any works or costs that extend beyond your obligations in the lease and insist they drop any plans not provided for.

Let them make the argument it’s provided for. They seem chaotic.

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We all agree that most of the work does need doing - primarily as the freeholder has neglected the building (that is our view anyway). The front cladding is rotten, splintered and discoloured. The picture below shows that.

The porch (just above the door) has a massive hole in it and one property has scaffolding holding it up.

In the other road (which is also included in this major works) they have been formally instructed not to use the balconies as they are not safe to stand on.

My views (and I believe others is) we don't want upgraded TV aerials or new bin stores - that was added to the proposals without residents being informed. I agree to removal of asbestos, new cladding, new porches and new guttering (has been an issue for years).

They don't really take notice of what we say or our views. We've expressed these in the 3 meetings they have arranged. The previous project management left (not sure why) - they were the ones that gave us the previous quotes which were based on nothing.

Get quotes for the work you agree to.

motorbiking said:

Get quotes for the work you agree to.

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That's not really feasible unfortunately.

This is major construction involving 28 properties, it involves major work to the entire outside of the buildings, balconies, asbestos removal, 3 storeys of scaffolding, insulation, cladding, base boards, and new porches.

Even with quotes I'm powerless to really argue their choice.

By law they have to do certain things, but taking quotes from residents is not one of them.

Thats not true, if they want you to pay via the service charge.

motorbiking said:

Thats not true, if they want you to pay via the service charge.

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Sorry, bit confused. Service charge is nothing to do with the work. Major works does not form a part of any service charge, maintaince fees or rent. Some properties can have a sinking fund but not in our case.

The payment of the invoice will be seperate to any other ongoing fees.

I take your point though. I feel like I'm blind though, I don't even know what they've asked the builders to quote for. I have asked but not been told.

The senior surveyor is offering to meet. I will meet and ask these questions. I will also say I want to meet the Chief Executive and the head of finance. They are the ones who decide on how charges are distributed and the justification behind it