Does Section 20 Apply

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    Does Section 20 Apply

    I live in a block of 16 flats each with a garage. We pay a service charge and also a ground rent charge. Each leaseholder has a share of the freehold company. The Directors of the freehold company have identified that the garage roofs need replacing and would like to pay for this work using the funds from the Ground rent account. Would they need to carry out a Section 20 consultation?

    #2
    Who owns the garages, who are the garages demised to.?
    Does your lease say the garage is included within your demise ?
    or does it say you will be allocated one , if available.

    If demised to you in the lease, each owner of the garage pays for the repairs.
    If not demised to the leaseholders, it's all part of the upkeep of the estate, and is added to the service charges.

    Either way, S20 is required
    And either way, the ground rent should not be even thought about using. unless there is something you are not telling us,

    But answer above questions first, - answers iusually on the first 2 pages of the lease .

    Comment


      #3
      s20 applies if any leaseholder is required to contribute more than £250 towards the works.

      Comment


        #4
        As the cost of the repairs are being paid by the ground rent money and not coming from the service charge does that mean the freeholder still has to go through the Section 20 process although they are not asking for contributions from the leaseholders

        Comment


          #5
          Originally posted by Mandyrose View Post
          As the cost of the repairs are being paid by the ground rent money and not coming from the service charge does that mean the freeholder still has to go through the Section 20 process although they are not asking for contributions from the leaseholders
          Ground rent money is separate from service charge money.
          If you are not being asked to pay anything, then there is no need for an S20
          No fee = no S20
          Simple.




          Comment


            #6
            There are two separate transactions because the service charge monies do not belong to the freeholder. It is effectively a dividend paid by the freeholder to the members and a simultaneous service charge payment by the leaseholders. It is only possible if each leaseholder is in agreement and he/she would need to declare the income for tax purposes.. There is a service charge contribution so a s20 notice may be necessary depending on the amounts involved.

            Comment


              #7
              Ground rent is not maintenence service charges.
              You are not being asked to increase the ground rent ( and should not be asked )
              You are not being asked for money to repair the rooves.

              Therefore if you not being asked to pay money, then no S20 i required.
              If you are not paying more than £ 250, then no S20 is required.

              You are not being asked to pay,
              You are not having to pay more than £ 250, as you are not bing charged, hence no S20 required.

              Comment


                #8
                No section 20 needed and sounds a fair solution as long as each of you pays the same ground rent.

                Comment

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