Defective Lease – No management company. Unhelpful Freeholder

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    Defective Lease – No management company. Unhelpful Freeholder

    Hi all, I'm in the process of trying to sell my flat. Our buyer's solicitor discovered a defect in the lease concerning the arrangements for maintaining and insuring the building. The responsibility for this was placed on a management company, which was a separate company from the one that owned the freehold. The management company did not own the building or have a lease of any part of it.

    We have tried contacting the freeholders solicitors for a deed of variation, we have said we are happy to pay the costs involved, but they do not seem interested in rectifying the situation.

    We have explored collective enfranchisement, we have approached the leaseholders of the other 3 flats in ours building. One is in dire straits financially, the other is an absentee landlord who has no interest in spending any money on the flat, the third is a sick elderly lady, her children are proccupied with her care and don't want the hassle of sorting out the freehold.

    I'm not sure how we were able to purchase this flat in the first place, or how our bank were able to lend us the money. But we appear to be stuck now. We have complained to our previous solicitors who assisted us in buying the flat who deny any wrongdoing. We have contacted the property ombudsmen who think we may have a claim of negligence but any costs will need to be made retrospectively AFTER having fixed the problem.

    We feel totally helplessly stuck. And not sure how to proceed. I'm so frustrated that the flat appears to have changed hands at least 4 times since the creation of the lease and we cannot seem to shift.

    Does anybody have any bright ideas?


    #2
    If you formed an RTM you would have the insurable interest - it would take around 5 months to set up and for you to be in a position to insure

    Probably have to pay the costs of the RTM yourself, just get the signatures from the other lessees

    Comment


      #3
      Originally posted by James_RM View Post
      ... arrangements for maintaining and insuring the building. The responsibility for this was placed on a management company, which was a separate company from the one that owned the freehold. The management company did not own the building or have a lease of any part of it.

      Does anybody have any bright ideas?
      I assume from what you say the lease names X company as embedded manager to carry out maintainance and insure the premises? Not sure what the issue is? Unless the MC is a sulking bunch of coves?

      It makes no sense to this country chicken that one flat would need a DoV to cover maintenance and insuring that would create a different arrangement to the other three leases?

      Is X company still alive and doing its managing work? Do you all pay a service charge for maintenance and insuring the building? Is it insured?

      I might be misresembling the problem, so forgive me.

      Would it not be far less hassle just to insure the whole gaff yourself even if it might end up duplicating insurance? Got to be cheaper and less soul destroying that incurring the effort and cost of exercising RTM for four flats that needs two directors, one being you and you are off asap. Can't see that flying with the other flats?

      Sorry if I missed the point. Not sharpest knife in drawer.

      Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

      Comment


        #4
        Is this not an issue to take to the Land's Tribunal ie FTT for them to resolve?

        Comment


          #5
          Hi all, thanks for the replies. We have decided we are out of our depth, out of time and just want out of the flat. We are looking at cash buyers of problem properties as a last resort but I am worried that the freeholder won't provide an LPE1 form. Is this a requirement for even cash buyers buying the property at a bargain price?

          Comment


            #6
            A cash buyer would discover all the problems you are currently having. Whatever value you currently expect to get for the flat could easily be reduced by 25% or more. They would have you over a barrel. If you have a mortgage yourself, you may find a cash offer too low to repay the mortgage.

            You need to sort the management company issue and loads of questions remain unanswered.

            1. Could you buy the freehold personally from the freeholder? Would they be willing to sell?
            2. Could you restore the management company (has it been struck off)?
            3. Consider RTE or RTM.

            Whilst you say the other three leaseholders are 'absent/ignorant/unwilling to help' you could go something along the lines of writing to them (and elderly ladies relatives) and say, "We are trying to sell. We can't because of lack of management company as noted and freeholder is unwilling to do anything. If necessary, we will sell to cash buyer for £'value of flat x 65%'. This will show up in searches in future and seriously degrade the value of YOUR flat when you come to sell. Help us with RTM/RTE as its as much your problem as ours."

            Word it nicer than I've put it, but you get the jist. Elderly ladies relatives will look at inheritance and wonder if they might need to step in. Even absent landlord might want to do something.

            Comment

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