Challenging unfair service charge agreement

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    Challenging unfair service charge agreement

    I am one of the 10 freeholders in a block of 10 flats used mainly for holiday lets. There are three flats at the basement level at the back of the building, each with a decking area. These flats are accessed via the decking. I own one of these.
    The other 7 flats are in the main body of the building over 3 further stories and are accessed via the front door and share communal areas. The communal areas are exclusive to these flats. The cost of cleaning the communal areas is high and is paid for by all 10 flats even though the three basement level flats receive no benefit from this.
    Even though we contribute towards the costs of the communal cleaning etc., there is no reciprocal agreement. For instance, the owners of the other 7 flats refuse to contribute to the maintenance of our decking. Their argument is that the decking areas are not shown as “shared” on the land registry plans.
    The current arrangement is highly inequitable and has cost the owners of the basement level flats over £10,000 in additional service charges over the last three years. These costs will inevitably increase as it seems they will vote to increase the quality of cleaning. They have a 7-3 majority.
    I really need to address this and would be very grateful for any suggestions for a way forwards. For instance, can I take it to a Tribunal and request a change in the terms of the lease?

    #2
    There will be only one freeholder, either a limited company, or a tenants in common trust. As you are talking about majority votes, I assume the former.

    As you describe the situation, the charges are being correctly apportioned, and there are no grounds to change the split.

    You might have a case that the quality level is excessive.

    You might have a case that excess cleaning is a result of breaches of the permissions to sub-let (I assume the flats were built as homes, not as a hotel).

    Do the holiday letters have planning permission for the change of use?

    Does the building insurance cover this type of use?
    Last edited by leaseholder64; 08-01-2018, 14:38 PM. Reason: Added insurance.

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      #3
      Also, are you sure the lease covers cleaning; that is often left to the leaseholders to do (with the lease assuming owner occupiers).

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        #4
        Hello - thanks for the reply. Yes - it is a limited company. The flats were essentially built as holiday or residential flats. There is no problem with subletting. Yes, the building insurance covers this type of use. But not what I wanted to hear - it seems unfair that flats 1 to 3 are shelling out thousands of pounds a year for cleaning the communal areas of flats 4 to 10. Flats 1 to 3 don't even have access to those areas and receive no benefits at all. It seems to me to be grossly unfair. Flats 1 to 3 receive no support at all.

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          #5
          Originally posted by leaseholder64 View Post
          Also, are you sure the lease covers cleaning; that is often left to the leaseholders to do (with the lease assuming owner occupiers).
          Yes, the lease covers cleaning/maintenance of the "communal areas". I seems that flats 4 to 10 can spend as much as they like while flats 1 to 3 pay 33% of the cost with no benefit to themselves.

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            #6
            You agreed to those terms when you took on the lease.

            As I see it, your only option is to demonstrate that the level of cleaning goes far beyond what is good practice for holiday let apartments, or that the work actually being done is being overcharged for.

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              #7
              As above -- fairness has nothing at all to do with it. You purchased a lease. The lease contained certain clauses. The price for purchase of the lease was (or should have been) a reflection of what it was you purchased.

              If the lease says all flats pay for maintenance of a lift or the roof, all flats pay including those on the ground floor. If the lease says the lessees are jointly responsible for balconies, you pay for that even if you have no balcony.

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