Major works not being implemented

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    Major works not being implemented

    Hi

    I own a long leasehold flat in a block of 4 long leasehold flats.

    In my Lease the Freeholder is responsible for redecorating the exterior of the building in a proper and workmanlike manner at least once every three years.
    In the 18 years I have been there this has not happened and currently the externals are in a bad state of disrepair.
    In 2015 there were S20 Major Works 1st and 2nd notices issued for internal and external refurbishment and a contractor appointed (£36k value works). 'Due to lack of funds', according to the Freeholder's Managing Agent, the Internal works only were completed (about £8k worth).
    A S.20 1st Notice was re-issued again in 2017 for the external works (re-issued as the MA claimed the original had expired after a year due to a recent ruling).
    A new MA (managing agent for Freeholder) took over and invoiced each flat approx £10k in Nov 2017 for the same major Works and if we did not pay this we were threatened with our debt being handed over to a Debt Recovery Agency. We were not issued with any revised quotes/2nd Notice (if they were indeed required) since the ones seen in 2015. I paid the sum.
    Present day- no Major Works have been done by the MA in the 12 months since paying the £10k. The funds are still with the MA. A few months ago, when I asked after the progress of the works, the MA claimed one Leaseholder was still to pay up.

    The question is:
    Is there any way to make the MA implement these Major Works, or the MA postpone the works indefinitely? Also can one person not paying up their share be used as a reason by the MA for an indefinite delay in carrying out the works?

    (FYI- there is no reserve fund under the terms of the Lease).

    Thanks in advance

    G

    #2
    Pay the defaulting leaseholder's share for them! The managing agents are correctly following the document that acts as a Highway Code for managing agents, and is identified in legislation, the RICS Residential Service Charge Guide, by not entering the contract until all the fund have been obtained, and are following the lease by not cross-subsidising the defaulters share from other leaseholders.

    The defaulter have the money. If not, the only other option the freeholder has is to attempt to forfeit their lease, which will probably result in a forced sale. (If they have a mortgage, they could go after the lender, who would want to avoid forfeiture.)

    Comment


      #3
      Thanks leaseholder64.If it takes eg another 5yrs for the Agent to collect one share of the pot then it appears there is nothing i can do to effect any work (other than paying their share?!). I'm currently trying to sell the property, and the neglect/breach of the Lease over the past 18yrs by the Freeholder is now an issue for most people viewing the place.

      Comment


        #4
        The lease may give you a right to enforce against the defaulter, although not the right to forfeit their lease. That won't help if they have no money.

        It is the freeholder who would have to take action against the defaulter, but the managing agent should be advising them to do so.

        Comment


          #5
          They cannot be saying it needs painting every 3 years, if they get their act together and follow that schedule it will cost a fortune.

          The one about S20s expiring I think is "Jastrzembski vs Westminster City Council [2013] UKUT 0284 (LC)", great in theory, but in a small block you will be hammered by the S20 fees as there are not many to bear it.

          Is there a reason you cannot take the right to manage, is part comercial?

          Comment


            #6
            The OP is trying to sell so doesn't have time to do RTM. In any case, that doesn't solve the problem that you can't cross-subsidise (or as others put it, steal money from other leaseholders) to cover the defaulter, so the default still needs to be addressed, which I believe requires cooperation from the freeholder, as I think only the freeholder can take legal action, and again will not be a quick process.

            This must actually be a common situation, as the is a question about work being blocked by defaults on the LPE1 form, used for solicitors' enquiries of freeholders and managing agents.

            Comment


              #7
              The freeholder obligations will be set down in the lease, to maintain and repair, and to keep in good condition.
              Courts have ruled, and the lease expects that repairs, maintenance etc, be done within a reasonable time.
              The freeholder is therefore in breach of the lease by not carrying out maintenance within a reasonable time, ( lets say 4 months if S 20's ), 3 weeks if it's cutting the grass as a regular service charge.

              The freeholder has to forward the money if there are not enough funds to carry out the work, in order to complete "within a reasonable time", then get the money off the defaulting leaseholders.

              Put this to the freeholder that he / she / it, has to finance the shortfall, or it's a breach of the lease, and litigation will follow in not done.

              Comment


                #8
                In my lease, freeholder repairing obligations are conditional on the payment of service charges.

                Comment


                  #9
                  I have considered suggesting RTM to other Leaseholders. However past experience of trying to get smaller funds together for smaller works have often been 'labourerd'. Also, even if we did form a RTM co., there is nothing to stop the problem defaulter still not paying for the Major Work. In fact they may even be less inclined to pay up to a smaller company.
                  I've had a number of other issues with the MA including paying upfront for gardening services for a year (about £300). The gardener refused to carry on working at the property as the MA was not paying his invoices. Since April, the MA has not found a substitute gardener and the garden looks a complete mess.
                  I think my hands are tied trying to effect any MW's.. If I start any form of proceedings again the Freeholder for not maintaining the property then this will be flagged up upon sale to a vendor by the solicitors. My only option seems to be drop a lot off the asking price and get rid of the property ASAP, or take it off the market and start pursuing the Freeholder to try and get the MW done.
                  Thanks for all your replies.

                  Comment


                    #10
                    So you had paid 10K3 in advance and the MA did not pay the gardener!

                    Have you asked to see the accounts yet, you can try to get an idea how much is in the service charge account, but I don't think you have a right to see that, but you may get lucky.

                    I don't think you have any protection from the agent using your funds to fund the shortfalls of others.

                    Comment


                      #11
                      If you want to see the accounts and have not already been sent a summary write and ask for a copy of the accounts. If you are not satisfied or do not receive the information make a formal request for a summary of relevant costs incurred under the Landlord and Tenant Act 1925. See:
                      https://www.lease-advice.org/advice-...-other-issues/

                      Scroll down to Section 3.3.

                      Also see Section 3.2 'The Holding of Service Charges - Trust Accounts'.

                      Comment


                        #12
                        By the way all section 20 consultations require two notices (pre-tender stage and tender stage) so you might want to look into this.

                        Comment


                          #13
                          Although it is clear that the two notices are being issued in this case, only one notice is required if the contractor has been appointed by a qualifying long term agreement.

                          Comment


                            #14
                            No- I've not seen the accounts yet but may be worth the approach.
                            This delay in major works isn't my first experience unfortunately. A few years ago I paid £800 for my contribution to some asphalting works to the front steps. The works were never carried out. It took 4 years of correspondence to get the the sum back. The MA admitted that I was the only one who has paid their contribution.
                            My other 'tack' is to try and get the £10k back before (hopefully) selling up. If it is true that a 1st Notice expires after a year, then the Jan 2017 has expired. Are these grounds for a requesting a rebate? Or are there any other grounds for a rebate I could pursue?

                            Comment


                              #15
                              If there are only 4 flats in the block, you could with the support of 2 other flats set up RTM to legally take over the service charge account from the freehold company. Download a free guide on setting up RTM from www.lease-advice.org

                              Then you cancel the 10K work and start again by appointing another MA to run the service charge account under instruction from the leaseholders. .

                              Comment

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