Property Management bully behaviour

[boboligogo]

Hi everyone,

I would highly appreciate any contribution to this post.

I'll get straight to the point: I am a leaseholder in a block of 8 flats in Leeds. One of the flats belongs to the Freehold owner (Landlord). Ever since I purchased this property we were dealing with a rather deceitful, unreliable and totally untrustworthy management property company appointed by the Freeholder.

Recently, I have received an email from the Management Company stating that the exterior and the communal interior is due for renovation as it is every 8 years or so. They went ahead and issued Section 20, appointed their own surveyor without the leaseholder's consent and consequently provided three contractor quotes which are three times higher than the ongoing rates in our area.

I went through my leasehold agreement and it clearly stipulates that the Landlord is responsible for Exterior redecoration and the Roof. And that the only responsibility leaseholder bears is to do with the internal walls of the flat. The walls dividing the flat and the hallway is the mutual responsibility of the landlord and the leaseholder respectively.

There are no clauses stipulating that the leaseholder must pay for exterior renovation works. It is also nowhere to be found in my lease agreement that in the case of Sinking and Reserved funds both having insufficient amount to pay for such works, the payment should be recovered from the leaseholder in full.

Now when I presented that excerpt from my leas agreement to the property management company they said that I am wrong, that I am in fact liable to pay for those works and that "this is how it's done in this country".

Now am I right to think that the Leaseholder and the Landlord are bound by the Leaseholder Agreement and therefore shall act accordingly within the scope of the agreement? To simplify is the property management company taking me for an idiot and should I, in this case, seek legal advice?

[scot22]

It seems to me unlikely that you are not responsible for the decoration. However, as is often stated it depends on your lease.
to avoid unnecessary legal costs I suggest asking LEASE, a government funded advisory service giving qualified legal advice. I have always found them excellent.

[leaseholder64]

I assume you mean managing agent.

There is no requirement that leaseholders be consulted regarding the choice of surveyor.

Leaseholders have an opportunity to nominate someone to bid for the work. They need to be careful that the proposed contractor is of an appropriate quality, as the easiest way to evade this requirement is to show that the contractor is unsuitable.

It would be an unusual lease that didn't allow the freeholder to recover the costs of exterior work from the leaseholders, but we would need to see the exact wording of the service charge covenants

I've never heard of a lease that insists that some expenditure can only come from sinking/reserve funds, however, the exact wording might be different.

Normally, the lease will give freeholder responsibilities, then state that the costs of those can be recovered through the service charge.

Normally the lease will provide that if the payment on account plus reserve funds don't cover the cost, an immediate demand for additional service charges can be made.

[boboligogo]

Thanks for the prompt response.

Normally the lease will provide that if the payment on account plus reserve funds don't cover the cost, immediate demand for additional service charges can be made.

There is no such clause in my lease agreement whatsoever. Moreover, the leasehold agreement doesn't mention the Managing Agent, everything is worded between Leaseholder - Landlord. However, I've never heard from the Freeholder themselves, everything is done through their Managing Agent and I don't have any legal agreements with such agent. When I asked the Managing Agent to provide me with the contract between their company and the Landlord they refused.


Also, I've looked online for some legal information on this subject, and this is what it says:
The power to recover service charges

It is important to understand that your landlord’s power to charge a service charge and your obligation to pay it are governed by the conditions in the lease. The lease is a contract between you and your landlord, and you do not have to pay anything that is not included in your lease.

https://www.lease-advice.org/advice-...-other-issues/

That being said the managing agent's statement that "this is how it's done in this country" renders irrelevant.

[boboligogo]

It seems to me unlikely that you are not responsible for the decoration. However, as is often stated it depends on your lease.
to avoid unnecessary legal costs I suggest asking LEASE, a government funded advisory service giving qualified legal advice. I have always found them excellent.

Thanks a lot, I will google them up now.

[leaseholder64]

We need to see your lease. If it really does have the effect you claim it has almost certainly been very badly drafted. What the agent is describing is how leases are normally constructed in the UK.

An agent is someone who acts with the authority of someone else, so, except for actually taking court action, the managing agent can do what the landlord can do.

You have a right to ask the managing agent for details of the landlord, and service charge demands should name the landlord.

[boboligogo]

We need to see your lease. If it really does have the effect you claim it has almost certainly been very badly drafted. What the agent is describing is how leases are normally constructed in the UK.

An agent is someone who acts with the authority of someone else, so, except for actually taking court action, the managing agent can do what the landlord can do.

You have a right to ask the managing agent for details of the landlord, and service charge demands should name the landlord.

Thanks so much for trying to help. Would it be possible for me to email you the lease agreement, as I don't feel comfortable sharing it on the website.

[AndrewDod]

I suggest you post up an anonymised copy of your lease here. What you suggest it says (or your interpretation) seems highly implausible to say the least.

[eagle2]

I suggest that you go back to the managing agents and ask them to refer you specifically to the clause in the lease which entitles them to charge you. I would also refer them to the RICS code of practice which requires them to let you have a summary of the terms of the management agreement if they are unwilling to disclose the agreement itself.

[andydd]

I suggest you post up an anonymised copy of your lease here. What you suggest it says (or your interpretation) seems highly implausible to say the least.

But possible..my lease is badly drafted..it covers external decoration but there are real issues regarding the driveway and external garages which are not covered..or to be more accurate..it obliges the FH to repair but is silent as to how the cost is recovered...

[manchesterpat]

Does your lease talk about the common areas and repair to those?

My lease doesn't explicitly mention the walls, but there is a section which notes the following (you may have something similar):

The Lessor HEREBY COVENANTS with the Lessors as follows:

To pay one half share of the due expenses incurred by the Lessors owner or occupier of the other flat in the Mansion in respect of the management of the Mansion and maintaining repairing redecorating and renewing the roof and foundations and any parts of the Mansion common to all the lessees and any common gutters rainwater pipes drains gas pipes electrical cables and wires in under or upon the Mansion and any common internal lobbies in the ground floor of the Mansion and enjoyed and used by the Lessee in common with the owners and lessees of the other flat in the Mansion

[Macromia]

But possible..my lease is badly drafted..it covers external decoration but there are real issues regarding the driveway and external garages which are not covered..or to be more accurate..it obliges the FH to repair but is silent as to how the cost is recovered...

If your lease really is so badly drafted that it doesn't make adequate arrangements for the maintenance of the entire property, it would likely be in your best interest to try to persuade the other leaseholders, and the freeholder, to get this corrected (which might end up costing all leaseholders something in legal fees to get the leases altered).

However, if it is simply a case of the freeholder being obliged to maintain parts without having any way to recoup the costs, there is no need for leaseholders to do anything to try to change this. If this is the case, the freeholder is expected to maintain these parts at their own expense (and it will be up to them to ask a tribunal to change this and to argue why the tribunal should agree to the leases being altered).

I agree with other replies though, it is quite likely that there is something in the lease that allows the collection of service charges to recoup costs the freeholder has paid for maintenance.

[leaseholder64]

In reply to your off list questions (please do not do that).

1) You never have a right to select the surveyor;

2) You do not have a right to reject the section 20 proposed contractors and force a new round of consultation.

Implied question: You do not have a right to provide alternative quotes, only a right to nominate someone who will be asked to quote.

Your right here is to ask the First Tier Tribunal to rule that service charges are unreasonable, as a result.

[eagle2]

You are lucky to have been consulted at all, many freeholders and agents are ignoring the s20 requirements. You are entitled to make comments regarding the choice of surveyor and contractor. You have the right to apply to the FTT if you consider that the service charges are unreasonable and if you can produce an alternative lower quote, that could be part of your case.

[vmart]

Hello

The salient points have been highlighted by others above. I would suggest your next step is to follow Scott22's advice and contact LEASE for free advice providing them with a copy of your lease.

It is highly likely the Managing Agent (MA) is within their rights to charge Service Charges in the proportion set out in the leases for the work described.

The MA appears to be following legislation by conducting a s.20 consultation. As others pointed out, you are entitled to nominate contractors (make sure they meet criteria set by the MA) and submit observations during the s.20 process. The MA is legally required to respond to your observations. However, in the end it is the freeholder's (in this case MA as they are appointed by the freeholder) sole decision as to which contractor to appoint. They do not need to select the contractor offering the lowest estimate but would be wise to ensure they justify their decision where this is not the case. You are also entitled to see the estimates from contractors (this is all explained in the s.20 documents you received/will receive). There is also plenty of information on the LEASE site related to this topic.

I would consider carefully your derogatory comments about the MA since, from your own comments, you may be drawing erroneous conclusions. This is often the case in leasehold where leaseholders/freeholders apply their own interpretation of leases/legislation.

Good luck. You should find LEASE helpful.