Are service charges for major works payable if a tribunal case is ongoing?

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    Are service charges for major works payable if a tribunal case is ongoing?

    Hi all,

    I am a leaseholder in a block of flats and there are major works planned - which amount to 10k per flat.

    Other leaseholders stated that the amount is due to the negligence of the freeholder and took the case to the FTT. I have joining in as well.

    The freeholder is now claiming half of the money for the major works (the other half is due in the next payment term). Most leaseholders decided to wait for FTT decision. However, I am worried it may affect my credit report. I am planning to sell the flat and buy a house in the next year.

    Do I have any grounds for withholding major works payment until the decision is made by the FTT? Can I contest if my credit report is lowered for this reason?

    I would appreciate any ideas regarding this.

    Many thanks!


    #2
    It shouldn't affect your credit rating but if you are planning to sell then you won't want a dispute impacting the sale.
    pay up , sell up and get out of there. .

    Comment


      #3
      Or if there is over 50% support from other leaseholders to not paying £10K , you could set up RTM company costing around £100 per flat , and take over administration of the service charge account and get the cost of major works down.

      Comment


        #4
        Thanks both for your responses! Your opinions are much appreciated.

        I love the "pay up, sell up and get out of there" approach!

        I intend to sell after everything is settled with the major works to eliminate any uncertainties during the sale process (Selling after the FTT decision has been made (in 2 months), any appeal to the decision by the freeholder and major works are completed. I am hoping these would all finish in one year.)
        Would any past disputes still impact the sale?

        With regards to RTM company, other leaseholders do not want to take on the management/administration of the accounts. So, this is not a possibililty unfortunately. Since I am planning to sell, I don't want to get involved either.

        Thanks again,
        Regards

        Comment


          #5
          Originally posted by Gordon999 View Post
          Or if there is over 50% support from other leaseholders to not paying £10K , you could set up RTM company costing around £100 per flat , and take over administration of the service charge account and get the cost of major works down.
          While RTM may help ensure that this property is managed properly in the future, it won't help with the situation described in the OP.

          The OP isn't suggesting that the work that is now required should cost less, the implication is that the work will now be expensive, but this is a direct result of the freeholder's failure to arrange repairs when first needed.

          In this situation a court or tribunal will need to rule on who bears responsibility for the cost of the work that is required (and it is likely that the leaseholders will have a hard time arguing that the freeholder should be responsible for much of the cost - unless they have convincing surveyors reports).

          If the OP wants a quick sale, the advice from Section20z is sensible - but buyers are likely to want a sale price that takes into account the disrepair and forthcoming major work.

          Comment


            #6
            Originally posted by Derya View Post
            Would any past disputes still impact the sale?
            Potentially, yes - but it would depend on the buyer and how their solicitor advises them.

            In this case, the fact that the dispute is over the freeholder's failure to arrange required maintenance would potentially be a red flag to some buyers.
            If the freeholder has failed to maintain the property in the past, the same may happen in the future.

            Comment


              #7
              Thanks for your views on this issue.

              I gather all I can do is to avoid any disputes that I can control.


              Many thanks!

              Comment


                #8
                Returning to your original question, whether or not you can withhold monies depends on your argument before the FTT. Are you saying that something is payable to the freeholder?
                It also depends on whether or not the freeholder intends to start the works or is collecting monies in advance.
                Disputes with and the reasonableness of the freeholder are likely to affect the ability to sell a property.

                Comment

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