Freeholder/Agent Demanding Money for Repairs

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    Freeholder/Agent Demanding Money for Repairs

    Hi all,

    Long time lurker of this forum and recent new member. Have always found the forum incredibly helpful so thank you! Have now got an issue with our freeholder that I could use some specific advice on (have tried searching for similar posts but to no avail).

    We have recently bought a leasehold flat in a period conversion. We are on the upper floor and the lower floor is owned by a housing association and rented out. The housing association are also our freeholder and act as managing agent for both flats. We have recently been sent a request for multiple thousand pounds to fix an external boundary wall in the back garden, despite having no access to garden. This seems unfair and we will struggle to pay this if it turns out we are obliged to.

    Keen to avoid paying, I have been poring through the lease and believe the following are the pertinent parts:

    In the prescribed clauses at the beginning, it says that the Property is defined in Schedule 1 ("The Premises"). This clause also says "in the case of a conflict between this clause and the remainder of this lease then, for the purposes of registration, this clause shall prevail". Schedule 1 defines the property as "all that property known as [Address] being the First Floor Flat as shown edged red on the attached plan" (note this does not include the garden or garden wall). It also states the premises includesvarious things (including the plaster of walls but not the actual walls themselves…). None of these things are the garden or garden/boundary walls. Schedule 1 goes on to say that the premises do not include: 1) "load bearing framework and all other structural parts of the building not included in the premises" 2) "The roof, foundations, joists and external walls of the building" 3) "The rear garden".

    After some back and forth where we have so far flat out refused to pay due to not having any access to the garden, the agent/leaseholder is now referring to a clause Under Landlords Covenants which states: "Subject to payment of the Ground Rent and Service Charges, the Landlord shall maintain, repair, redecorate, renew and (in the event in the landlord's reasonable opinion such works are required) improve...the boundary walls, gates and fences of the Building (if any)". They are suggesting that the Building includes the garden and its boundary walls. However, the Building is defined in the definitions at the start of the lease as:
    "Building means the building of which the Premises form part and each and every part of the Building and any other areas the use and enjoyment of which is appurtenant to the Building whether or not within the structure of the building".

    We disagree with this as 1) Schedule 1 makes no mention of the garden or boundary walls being included in the Premises 2) We have no "use and enjoyment" of the garden 3) The prescribed clauses state that Schedule 1 is gospel.

    Apologies for the long post and thanks for sticking with it so far! Would like some opinions on whether the freeholder has any grounds to obligate us to pay towards the repair of the wall. Interestingly, they have not yet mentioned escalating it (legal fees etc). They also have not provided us with any quotes as part of the Section 20 process - is this helpful to us in any way?

    Any help much appreciated

    #2
    Yep, you have to contribute your share of building upkeep. It does however sound like there should be section 20 consultation so maybe ask to see the quotes. They might be claiming exemption

    Comment


      #3
      I would be raising a formal complaint with conveyancer if they didnt fully advise you.

      If the wall is that bad (visibly) and you were aware of the lease implications, would you have completed on the purchase?
      My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

      Comment


        #4
        Originally posted by SSLA91 View Post
        ...the agent/leaseholder is now referring to a clause Under Landlords Covenants which states: "Subject to payment of the Ground Rent and Service Charges, the Landlord shall maintain, repair, redecorate, renew and (in the event in the landlord's reasonable opinion such works are required) improve...the boundary walls, gates and fences of the Building (if any)". They are suggesting that the Building includes the garden and its boundary walls. However, the Building is defined in the definitions at the start of the lease as:
        "Building means the building of which the Premises form part and each and every part of the Building and any other areas the use and enjoyment of which is appurtenant to the Building whether or not within the structure of the building".
        The parts of the lease that you quote in the above part of your original post, particularly the bits I've highlighted in red, make it clear that the 'landlord' (i.e. the freeholder) is responsible for maintaining the boundary walls, and that the leases definition of "building" does include the garden and the boundary walls.

        From what you have posted it sounds like 'Schedule 1' describes what part of the building is demised you, and which parts you have use of that aren't demised to you (if any).
        This is completely irrelevant to whether or not you have any responsibility to contribute towards the cost of repairing/replacing the wall.
        What you need to be looking for is what the lease says that you need to contribute towards as service charge costs. It is very likely (although not necessarily the case) that you will be obligated to pay a share of the costs of all work that the 'landlord' has to carry out in order to meet their maintenance obligations.
        With just two flats, it is often the case that the leaseholders of each flat share all costs 50:50, even if the part needing work benefits only the residents of one of the flats.

        As 'landlord-man' has said, your conveyancer should have explained your obligations to you.


        Comment


          #5
          I agree that you seem to be confused by what is included within the premises, ie your flat for which you are responsible and the building which is the responsibility of the freeholder. Your lease should define service charges and there is usually a schedule listing the items of expenditure to which you are required to contribute. The lease will also specify your share of the expenditure, which will apply regardless of whether or not you receive any direct benefit from that expenditure.

          You are entitled to ask the freeholder to follow the s20 consulltation procedure and you may limit your contribution to £250 if it is not followed but as explained in #2 the freeholder could apply for dispensation at any time and if dispensation is granted, the amount which you are required to contribute could increase above £250.

          Comment


            #6
            Another thing - when exactly did you buy the flat, you said "recently" - is that a month or a year etc

            Do some digging (ask the tenant below and the freeholder) when this issue arose, when quotes were first sought and when were letters first sent out.

            It could be that the person before you knew of these intended works (and perhaps more) and got out in time.

            IF the works were known, they had a legal duty to inform you during the conveyancing process.

            You may have a claim against the sellers.
            My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

            Comment


              #7
              You should also check your lease to see if the freeholder is allowed to charge for managing the building.

              Comment


                #8
                Originally posted by eagle2 View Post
                You are entitled to ask the freeholder to follow the s20 consulltation procedure and you may limit your contribution to £250 if it is not followed but as explained in #2 the freeholder could apply for dispensation at any time and if dispensation is granted, the amount which you are required to contribute could increase above £250.
                Section 20 legislation is, unfortunately, pretty much worthless now following legal precedent.

                Firstly, any freeholder that fails to carry out consultation can ask for dispensation at the time that they are called to a court/tribunal over a dispute to the charges and, secondly, even if dispensation is not granted, leaseholders costs are no longer limited to £250 and instead are only limited to whatever is determined to be 'reasonable' (a leaseholder challenging the costs will have the burden of demonstrating that the failure to consult has genuinely disadvantaged them in some way, that costs should have been lower, and that it is reasonable to assume that they would have been lower if proper consultation had been carried out).

                Comment


                  #9
                  I agree that s20 has been steadily diluted over time and the longer that the freeholder takes to apply for dispensation, the more difficult it is for the leaseholders to prove financial prejudice. There seems to be no harm in SSLA91 refusing to pay more than £250 at this stage and thereby forcing the freeholder to apply for dispensation if it wishes to collect any additional sum. There is considerable uncertainty over what terms the FTT would grant dispensation and the costs would most likely be payable by the freeholder. It would force the freeholder to supply the quotes which it obtained and enable SSLA91 to seek comments from other contractors.

                  Comment


                    #10
                    Originally posted by eagle2 View Post
                    There seems to be no harm in SSLA91 refusing to pay more than £250 at this stage and thereby forcing the freeholder to apply for dispensation if it wishes to collect any additional sum. There is considerable uncertainty over what terms the FTT would grant dispensation and the costs would most likely be payable by the freeholder. It would force the freeholder to supply the quotes which it obtained and enable SSLA91 to seek comments from other contractors.
                    Possibly...

                    Although when my freeholder applied for dispensation a while back (arguing that the proposed work had to be carried out as a matter of urgency) they were granted dispensation with the First Tier Tribunal commenting that the 2013 Supreme Court Case of Daejan versus Benson meant that the only issue was whether or not leaseholders had suffered prejudice due to a lack of consultation and that reasonableness could still be challenged at a later date.

                    The freeholder doesn't even need to ask for dispensation - they can pretty much just go ahead with the proposed work and simply request dispensation after any leaseholder that objects starts tribunal action over the reasonableness of the work.

                    Comment


                      #11
                      Originally posted by Macromia View Post

                      The freeholder doesn't even need to ask for dispensation - they can pretty much just go ahead with the proposed work and simply request dispensation after any leaseholder that objects starts tribunal action over the reasonableness of the work.
                      It makes you wonder why any freeholder should comply with s20 at all. As you say, it can wait to see if any leaseholder challenges the costs. It does not even need to explain why it did not comply with s20, the only consideration appears to be whether or not the leaseholders suffered any financial prejudice, In addition, the burden of proof lies with the leaseholders, which seems to be harsh. It can be extremely difficult to prove that the cost of works or services could have been lower perhaps several years after the event. There is a concession to leaseholders that they will be given the benefit of any doubt and costs would normally be awarded against the freeholder but is that an adequate deterrent? It seems to make no difference if the freeholder repeatedly ignores s20.

                      Comment


                        #12
                        Originally posted by eagle2 View Post
                        There is a concession to leaseholders that they will be given the benefit of any doubt and costs would normally be awarded against the freeholder but is that an adequate deterrent?
                        Unfortunately I'm not even convinced that leaseholders get that benefit.
                        In my experience the FTT is too often reluctant to grant any costs even when a leaseholder wins the majority of their claim and the need for legal action could have been avoided but the freeholder/managing agent refused to even engage properly in any discussion.

                        Comment


                          #13
                          Macromia - I agree that you can never be 100% sure of a Tribunal decision and a number of factors would be considered with the usual application by a leaseholder that service charges are unreasonable but in this case, if the leaseholder refuses to pay more than £250 and leaves it for the freeholder to make the application, there should be a compelling case for the costs to be awarded against the freeholder as part of the terms of granting dispensation.

                          Comment


                            #14
                            As mentioned by some above, the fact that the lease obliges the FH to repair parts of the building doesnt mean that you are liable to pay for it.

                            I have first hand experience of this, my lease has similar wording to yours, the FH must the building, boundary walls AND the driveway etc BUT under the clause regarding costs it omits the driveway, ultimately my FH must repair it but cant recover the cost.

                            This has been the subject of legal action and judges have decided that yes he must repair it but cant recover the cost, it may in theory be possible to ask an FTT to amend the lease but this would be difficult as the driveway is not only used by myself and the other leaseholder but by owners of an extra garage at the rear of the property.
                            Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                            I do not accept any liability to you in relation to the advice given.

                            It is always recommended you seek further advice from a solicitor or legal expert.

                            Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                            Comment

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