1st Service Demand

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    1st Service Demand

    I would like to send out a service charge demand to my neighbours. This is the first time they will have been asked to pay anything for about 30 years. This is a property I inherited which was in a bad state of repair. I am freeholder and the other leaseholder. My neighbours are quite set in their ways so much of the communal work I have paid for myself.

    Can I put things on the 2018/19 demand if the work has started but is not yet complete? I have the wording which needs to accompany the demand and they have been provided with freeholder contact info (section 3). Is there anything else I need to consider?

    For example:
    1. 2018/19 Ground rent - £135
    2. 6 years Ground Rent arrears (2012-2018) - £810
    3. Buildings insurance- £160.50
    4. Replacement of the roof and external decoration £10,000 - (section 20 consultation completed. Work starting in August)
    5. Install communal fire alarm - £250
    6. Install communal lighting - £250
    7. Install new communal front door -£250
    8. Install new communal flooring and window - £250
    9. Re route first floor water supply -£250
    10. Re route first floor gas supply £250
    11. Install new first floor fire escape - £250 (Not yet complete)
    12. Install 3 security lights in communal garden -£250

    #2
    Seems OK. .whether you can ask for work started but not completed depends on the wording of the leases (s) and whether or not you have incurred an actual costs..be aware that some older leases don't contain any provision for collecting monies in advance and that you must pay for everything and be reimbursed later.

    ALao whilst it doesn't look like it applies here be aware of the legal case of historic neglect.
    Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

    I do not accept any liability to you in relation to the advice given.

    It is always recommended you seek further advice from a solicitor or legal expert.

    Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

    Comment


      #3
      Also some of the things you list sound like improvements as opposed to maintenence
      Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

      I do not accept any liability to you in relation to the advice given.

      It is always recommended you seek further advice from a solicitor or legal expert.

      Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

      Comment


        #4
        I would issue separate demand for annual ground rent because the payment goes to a bank account under freeholder's name. The demand will show the name of freeholder and the address for serving legal notices.

        The service charge payment should go to separate bank account for holding service charges and you can show bank statements to FTT if you are required to give account of your management .

        I would suggest you prepaare a budget statement for 2018/2019 service charge for your afddress .

        At bottom , you would show the service charge levy per flat = total budget expense for year divided by the number of flats.

        Comment


          #5
          The ground rent demand must be a separate document, because there is a very specific format for it, without which the demand is void.

          Each ground rent year must be demanded separately, as each demand will contain a different date on which the payment was due according to the lease.

          Comment


            #6
            Having lots of items that come to exactly the section 20 limit looks very suspicious to me. In particular, I think it might be difficult to argue that communal lighting and garden lighting do not fall under the same section 20 job. That's on a good day. If the tribunal members got out of bed on the wrong side, they may well see this as a lot fewer jobs than listed.

            If you've really prepared to accept the £250 limit, without trying for an exemption, I believe you should quote the actual cost and then note that it has been capped at £250, as, at the moment, it looks as though the figures haven't been properly calculated, but rather simply set to avoid a section 20 challenge. They can still be challenged on the basis that they are nor properly calculated.

            I don't see a charge for a fire risk assessment, and whilst not a legal necessity, I'd strongly suggest that any property that needs communal fire alarms should have had the risk assessment done by an independent professional.

            I think the chances of getting £10,000 for major works before August this year, or even August 2020, is vanishingly small! You'll probably have difficulty getting the leaseholders to pay £25 + labour for fitting door closers, which are also likely to missing, and typically a direct cost on the leaseholders.

            Comment


              #7
              Many thanks for the information. I will make amendments based on the info provided above.

              With regard to historic neglect can I be made responsible for this even if I am working to bring the property back to a good standard since I inherited it? Also, I have written correspondence with the other leaseholders asking them to provide me with maintenance bills they have paid in the past (they have not done so because there was no evidence of anything being done for decades).

              I am fairly sure I will not see a penny of the £10,000 for the roof and external decoration in their lifetime. I will be paying for this myself and hope to get something back in the future. Is it enough for me to send the demand and follow up letters for a few months before taking it to FTT? I assume if the amount is left unpaid I will be able to demand that it is settled before the lease is renewed (as their lease is very short)?

              I have just reread the lease and think I may have misread the amount for Ground Rent. It reads “...Paying therefore during the term hereby granted the yearly rent of £35 by four equal quarterly payments in advance on the usual quarter days...” Is the yearly amount £35 total and £8.75 per quarter rather than £140 per year and £35 per quarter? Am I correct in thinking I can only go back 6 years? Can I send 6 arrears demands for £35 or do I need to split them up as quarterly payments?

              Comment


                #8
                I'm reading that as a layman but I would say that it needs splitting down somewhat.
                You alrrady seem to have started that by the order you have listed them.

                As other have said the ground rent(s) should be seperate.
                (And yes, I'd say that was £35 PA in 4 lots of £8.75).

                But I'd also say that you need to split out what is communal/needed from not communal/improvements, as well as seperating one off costs and ongoing service costs.

                Some of how these costs will be seen may depend on if your neighbours are on the ground or first floor.

                In particular I'd be asking about the re-routing of the water and gas. Does that benefit both flats, or just the first floor, or was it done purely for the benefit of the ground floor (hiding the pipes)?
                Was it realy needed or was it an improvement?

                Same for the first floor fire escape, needed by law or an improvement over escaping through a window?.

                Are the garden lights a necessity or an enhancement? Who's electricity bill will they be running on?
                Same for the new communal lighting / running cost.

                I would not expect your neighbours to be happy about these sudden demands after many years, but you seem to be anticipating that and already talking about FTT.

                Comment


                  #9
                  I suggest that you consider the relationship with your neighbour first and foremost. Why not speak to them and try to create an amicable relationship?

                  Why has ground rent not been demanded in the past? Unless you have paid for the arrears when you acquired the freehold, I would waive it and explain to the neighbour that you are showing some goodwill but you intend to charge in future.

                  Why not discuss all your proposals with the neighbour and ask them if they have any suggestions or comments?

                  It looks like you need to study the entire lease very carefully.

                  The FTT should be avoided if you can.

                  Comment


                    #10
                    Thanks again for your comments.

                    Comment


                      #11
                      Nukecad
                      You make some good points about improvements but the stuff about which flat ito benefits is irrelevant
                      nearly all leases just split the cost irrespective of whether the flat owner benefits or not...the case of a ground floor flat owner refusing to pay for a lift is a well known example.
                      Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                      I do not accept any liability to you in relation to the advice given.

                      It is always recommended you seek further advice from a solicitor or legal expert.

                      Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                      Comment


                        #12
                        Originally posted by andydd View Post
                        ..the case of a ground floor flat owner refusing to pay for a lift is a well known example.
                        In a multi-storey block with multiple tenancies that example is a well known principle, it's for the benefit of the majority and all flat owners share the cost, even the ground floor which may never benefit.
                        (Just as the GF would have to pay a share for roof repairs).

                        But I'm reading the OP as this is a 2 storey with a freeholder on one floor and one leaseholder on the other, so it's a whole different matter if the works are only for the benefit of one party.

                        If the works are a legal requirement, or required for the maintainance of the whole property, then the cost should be split.
                        If it's an improvement for the benefit of only one party then that party should stand the cost.

                        In the end it will come down to what the lease says, if the lease doesn't cover it then the tribunal will decide.

                        Comment


                          #13
                          Again."benefit" has no relevance. That's not how LH properties work. The lease will say who is responsible for maintenence and how the cost is to be split..maybe 50/50 in a building with 2 properties. The FTT don't get involved iin looking at who benefits they look at it as a contract...it's not a case of saying the cost SHOULD be split..the cost will be split depending on the calculation within the lease.
                          Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                          I do not accept any liability to you in relation to the advice given.

                          It is always recommended you seek further advice from a solicitor or legal expert.

                          Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                          Comment


                            #14
                            Even if it's FH on one floor and LH on another they are still both LHs the fact one is also the FH doesn't matter.
                            Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                            I do not accept any liability to you in relation to the advice given.

                            It is always recommended you seek further advice from a solicitor or legal expert.

                            Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                            Comment


                              #15
                              I think that we are making the same point, but just using different words.

                              'Maintenance' is one thing, 'improvement' is something else.

                              Comment

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