Can the FTT assess damages and offset Section 20 costs?

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    Can the FTT assess damages and offset Section 20 costs?

    I have lived in a property for 6 years which has had issues with the roofs pretty much since day one. All has been reported to the freeholder, who, finally, looks like they may be doing the work. However, the costs are likely to be in the region of £15,000 + VAT of which I will be expected to pay half. My question is, can the FTT assess damages (and if proven) offset some of these damages against the costs?

    Background
    Nov 2013 – moved into property and notice leaks. Agree with the freeholder to undertake the repairs on his behalf. Costs were £900. When on the roof the roofer said we would need to do another £1,000 of work to make the roof watertight. Freeholder never agreed to the extra works so patching at £900 was done, but freeholder refused to pay his half
    June 2014 – a quote was received for works to be done, and repairs costing £3,350 were undertaken, I pay my £1,675 share.
    October 2014 – roof began to leak again.
    January 2015 – I took the freeholder to the small claims court as he never paid his £450 (I won and got the money back plus costs)
    February 2015 – The builder who did the works in June 2014 visits and tells me the invoice / receipt I have isn’t form him, and the works that he did aren’t what is on the schedule of works I have
    November 2015 – Go to the first tier property tribunal who agree the invoice I have is fake and that the works I have been charged for have not been done. I’m awarded £1,675.
    December 2015 – Some roof repairs undertaken, but roof continued to leak.
    January 2017 – freeholder appoints a survey to inspect the roof – I pay half the costs. The survey states the roof needs to be replaced and is failing.
    July 2018 – freeholder starts section 20 process. First notice received.
    July 2019 – Re-mortgage property to become a buy to let. Unable to rent the property due to leaking roof (not that relevant, but lease allows sub letting without freeholder permission).
    August 2019 – Second section 20 notice received.

    I think I have good grounds to show the freeholder has known the roof is leaking since at least November 2013, and as such I would be able to argue there is a claim there as a result of a reduction in the market rental value (per Earle v Charalambous) and the loss of rent since July 2019 as I cannot rent the property.

    In this instance, I just want the roof fixed as a priority, but I think the fact this has dragged on for 6 years and I have lost sales in the meantime (once the state of the roof is discovered – which forced my hand to re-mortgage as a buy to let) I think I could get some damages which I hope will offset the costs should the work actually be done.

    So back to my question – can the FTT assess losses and offset this against the section 20 costs?

    Thanks all

    #2
    When you say the freeholder refused to pay their half, do you mean the other leaseholder, who just happens to be sole freeholder, and that there are only two leases? I think you generally need to explain the tenure more fully.

    On my calculation, there should have been as section 20 on the work that you arranged.

    Comment


      #3
      The property is two maisonettes, mine is leasehold, the other property is not a leasehold property but owns the freehold to the building. There's only one lease (on my property). The freeholder is responsible for arranging the works to the common parts, which are to be split 50/50 between both properties.

      Regarding section 20 for the works I did - I am a leaseholder and cannot start a section 20 procedure and to be honest, the works I arranged in November 2013 are not in question. The freeholder agreed to pay the costs of £450 and then subsequently refused to pay them. The small claims court found in my favor - the freeholder agreed the costs and didn't pay them. He didn't mention section 20 back in November 2013 and there was no dispute about this.

      If you're referring to the works in June 2014 - the freeholder should have undertaken a section 20 I agreed, but he didn't and I didn't dispute this at the time. Again, I don't think that is all that relevant - I didn't complain about the lack of section 20, I complained about the reasonableness of the work and the tribunal found in my favor and refunded me my money.

      I think the background is useful as it shows the freeholder has been aware of the issues since least November 2013.

      Comment


        #4
        Are you saying that there was no obligation on the freeholder to do the earlier work? If there was an obligation, then, conceptually, the freeholder is paying all £900 then reclaiming £450 from you as service charges. It is a bit academic, as you would have no difficulty getting a retrospective dispensation.

        My feeling is that you can only get something from the FTT to the extent that the latest work was more expensive than need be because of the delay. I think you will need to go to the Crown Court for compensation for any personal consequential costs.

        Comment


          #5
          The FTT has limited jurisdiction. It can determine whether a service charge is payable and is reasonable and how much of the charge is payable by you. It cannot assess damages as such but you may be able to raise some of the issues when arguing that the cost is unreasonable or part of the cost is not payable by you. I would wait until you have an actual demand before making an application to the FTT.

          Comment


            #6
            I imagine getting damages would be hard, but more to the point, it is still leaking now, winter is coming, do you think the FH is actually going to do any work?

            Starting a section 20 is no guarantee of actually commencing work.

            Comment


              #7
              There are some circumstances where the FTT will allow 'offsetting' of money a leaseholder has had to pay out due to a freeholder failing to fulfil their duties against service charge demands, so it might be worth arguing that costs you have incurred due to the lack of action from the freeholder should be deducted from your share of getting the roof repaired. You would need good evidence that you have incurred a loss though, as well as the evidence that the freeholder was aware of the problem and should have taken action to repair the roof sooner.

              You are perhaps more likely to win a reduction in your share of the costs by arguing that the repairs would have cost less if they were done sooner (again you would need evidence). If there is any internal damage to your property that will need to be made good after the roof is repaired, you may be able to claim that most of this cost should be deducted from your share as well. Your argument would be that the freeholder had a duty to keep the roof properly maintained, and the internal damage would not have occurred if they had done so.

              If you wish to pursue compensation you would need to start court action that is outside of the jurisdiction of the FTT.

              Comment


                #8
                The FTT does not have the jurisdiction to consider payments, so any items which you have paid which you cannot agree with the freeholder should go through the county court. Similarly, claims for loss of rent would need to be dealt with through the same court. A claim through the FTT would be based on whether or not the freeholder was aware of the works in 2013, what would have been the cost of those works at that time, what is a fair assessment of the additional damage since that time and what is the cost relating to those additional works. Ideally you would need a surveyor to prepare a report and you should consider jointly (with the freeholder) instructing one surveyor.in order to save costs. It is not recommended but you could present your own application in which case you would need to take pictures and point out the areas of damage when the Tribunal members inspect the property. It would be difficult to obtain evidence now of the estimated cost in 2013 but you may know a reputable builder who could provide comparisons of costs now and then. The Tribunal could take into account the fact that you have benefitted by not being charged at the time as you have had the use of funds which would have been paid to the freeholder.

                Comment

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