Charged 3 x more than agreed amount by freeholder. Any advice?

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Charged 3 x more than agreed amount by freeholder. Any advice?

    Hi a while ago I was contacted by freeholder regarding work involving a steel beam in the flat above mine. Flat above is owned by freeholder. There were builders in another flat doing a large extension.
    The company doing the extension is owned by the person who inherited the flat being extended, and they developed a relationship with the freeholder as both big property companies.

    The f/h asked me for sake of convenience - i.e. not having to go down formal section 20 - if I would agree to works being done. He stated it would be much cheaper as the builders (of the other flat`s extension) were already on the premises. I asked how much we were talking about and he said around £500 per flat (9 units). He confirmed in an email and I told him in this case that I agreed.

    Fast forward - I got a bill for £1,500 for this work. So - apparently instead of the work costing £4,500 they told me it was now £13,500.

    There is no point in asking for invoices as all are in cahoots.

    I told them that I would pay the £500 as this is what was quoted and is why I agreed to not getting other quotes.

    They have now sent me a final demand for the remaining £1000.

    It seems that anything goes and they can say,do and demand whatever they want.

    Is there anything I can do?

    Thanks
    Michelle

    #2
    There seems to be something missing here! What were you responsible for that required you to pay anything at all? This seems to be about non-service charge work relating to other flats. What have I missed?

    I'm not sure whether you have just tried to contract out of the consultation, or whether you have made a private agreement to pay for work that you are not required to pay for under the lease.

    Comment


      #3
      Thanks Leaseholder64 - they are telling me I am responsible as apparantly it is part of building fabric!

      Comment


        #4
        Most leases don't cover the recovery of the cost of improvements. Exactly which terms of the lease are they relying on?

        I find it strange that someone who is promoting changes the law to givet leaseholders extra protection, should try to contract out of existing protections for leaseholders. I'm not sure if its possible to contract out, but even if it is, it doesn't remove the duty to only charge what the lease allows, and to only charge reasonable prices.

        However, note that the reasonable price is based on what the job should cost, not what was in any original estimate.

        The Daejan ruling means that you will have to pay more than £250, so the most you have thrown out by contracting out of section 20, if that is possible, is the ability to argue that a specific cheaper contractor would have been used if you had had the ability to nominate one., or that you could have suggested a specific cheaper method of working, on seeing the detailed quotes.

        Comment


          #5
          It was for a Bressumer Beam.

          Email was sent as follows:

          "Mr XXX has agreed to do these on a cost plus basis which will be the most cost effective way of doing these works.

          He estimates an approximate overall cost of £5000+Vat.

          Please can we get your written consent so that we may proceed on this basis".

          I agreed as it seemed practical and I was trying to be reasonable.
          It was this that first alerted me to look back at past charges.

          Comment


            #6
            Originally posted by michelle230 View Post
            It was for a Bressumer Beam.

            Email was sent as follows:

            "Mr XXX has agreed to do these on a cost plus basis which will be the most cost effective way of doing these works.

            He estimates an approximate overall cost of £5000+Vat.

            Please can we get your written consent so that we may proceed on this basis".

            I agreed as it seemed practical and I was trying to be reasonable.
            It was this that first alerted me to look back at past charges.
            I think the above comments are correct, that this should never have been charged to you because it appears to benefit the flat owner (freeholder) rather than the whole block and wasn't necessary unless the renovation works were being done.

            That being said, based on my understanding, which somebody will correct I'm sure, but if you have agreed to paying £500.00 then you cannot challenge that amount or service charge. However, you can raise this with the first tier property tribunal and see if you need to pay the extra £1,000. https://www.lease-advice.org/faq/wha...ration-charge/

            When you make the claim to the tribunal, you ask them what they think is the price to pay for any works. I would argue that you now think you don't think anything was due because the works aren't for your benefit. The freeholder may argue that you have agreed to the £500.00, which you could try and contest, but there's no way you have to pay the extra £1,000/

            Comment


              #7
              It says estimate, not quote, so in no way is the £500 fixed. Cost plus means that the final price will be a fixed mark up on a cost based on time and materials.

              Using cost plus suggests that there was a large amount of uncertainty in the estimates.

              Comment


                #8
                I agree that you should ask the freeholder to specify which clause of the lease permits him to charge you anything at all. Estimates may be amended whereas quotes are fixed prices, so it is better to insist on quotes in future.

                What exactly did you agree to pay eg did you agree to pay a service charge, a sum on account, a specific contribution towards specific works?

                I disagree that you have waived your rights to be consulted, you may have been misled by the freeholder.

                You may still be able to claim that the freeholder should have followed the consultation procedure and that you were pressurised into agreeing something which you would not have agreed if the procedure had been followed correctly. You may be able to claim that the freeholder ought to have known at the outset if he could not claim monies as service charges and that he should have warned you as soon as he expected the actual cost to exceed the estimate.

                The Daejan case does not necessarily mean that you would pay £250 or more, it gives a Tribunal the discretion to look at each case on its merits. In this case, it may decide that you have nothing to pay.

                Comment


                  #9
                  Even pre-Daejan, they could have said that the charge was unreasonable because the lease did not allow it.

                  Post Daejan, the £250 limit has little effect. The distinction I was making was that, without proper consultation the tribunal needs to consider what might have been charged if there had had been consultation, but with consultation, they only need to look at what is reasonable, which will, in general be slightly higher than the ideal market prices, as there is no expectation that the tendering process be perfect.

                  I doubt that it was the intent to be able to contract out of section 20, but I'm not sure, and so qualified my answers on the contracting out being valid. Incidentally, contracting out has similarities to the technique used by broken "commonhold" like organisations of trying to argue that a majority company vote overrides the lease.

                  I suspect Daejan also has the effect that work outside the lease that the leaseholder would otherwise have had to pay for themselves, might not get any compensation. The current case does not fall into that category.

                  Comment


                    #10
                    The chances are that the freeholder was aware that the share of the cost would be much more than £500 but he set the initial amount low in order that you would agree.

                    Now he appears to be trying to apply pressure on you to accept the additional charge of £1,000.

                    I would ask for copies of the invoices even though you do not expect them to reveal anything.

                    £250 is relevant, that is still the maximum which may be claimed if the consultation procedure is not followed. The freeholder may not be aware that he needs to apply for dispensation. It will be a good test, if he is aware of that, he will be aware of the other requirements.

                    Comment


                      #11
                      The request for dispensation can be retrospective and I think it was in the Daejan case.

                      Comment


                        #12
                        Make an application to FTT to judge the reasonableness of the bill.

                        Comment


                          #13
                          Why is the steel beam needed. You rebuild a wall with bricks.

                          Sounds like the flat above is knocking down load bearing walls in his own flat and wants you to pay.
                          If that is the case -- you pay nothing, as leaseholders pay for ALL modifications to their flat, and not you

                          Comment

                          Latest Activity

                          Collapse

                          Working...
                          X