Can freeholder stop S20 notices being issued?

[NaomiB]

Our managing agents have a contract with the freeholder who is not keen on spending money, full stop! In a way this is good but it seems that in the contract he has with the managing agents there are certain conditions one of them is that he can't issue S20 notices. Another is that the accounts can't be sent out until the freeholder has certified the accounts. Our financial year ends in March and the accounts didn't arrive until December the year before last. That means that the agents are hanging on to the surplus from the previous year to carry them over the following summer so no work got done.

This year, because people were selling their flats and needed accounts, they arrived in July. We've got several jobs done. Now I think that it will go back to normal and the agents will start hoarding money to carry them over next year. I want the communal windows replaced but I expect the agents will put that work off. It's been in the pipeline for over a year.

[eagle2]

A term within a contract which contravenes legislation is invalid.

Delaying surpluses being credited to leaseholders should have no bearing on when works are carried out. The freeholder has a duty to arrange required works in accordance with the lease. It is up to the freeholder to plan ahead and budget adequate funds but it is not permitted to delay necessary works.

Is there a reserve fund? It looks like there is a cash flow problem, are there substantial arrears of service charges?

[AndrewDod]

The agent acts as agent for the FH so they are not "our agent".
It is perfectly sensible and correct that FH should have complete control over whatever (accounts or anything) his agent emits.

I have no idea what it means that "he can't issue S20 notices"

What exactly does the lease say about the timing of the account year and invoicing. Some leases say exactly what is happening in your case. Exact words please.

What does the lease say about any reserve fund.

Why do you want the windows replaced? What does the lease say about that?

[Gordon999]

The S20 Notice is a "legal requirement" under the L & T Act 1985 for consultation with leaseholders on any works planned costing more than £250 per flat.

It is illegal for the freeholder to ban the issue of S20 Notice because it means any work costing more that £250 per flat cannot proceed.

[NaomiB]

Will answer the rest later but the windows which need to be replaced by double glazing are in the communal area. We've got a quote for painting them £8200 and replacement double glazing would have cost £5370 but due to the rise in the cost of glass this year would now cost £6712. Divide by 18 flats and that would be £373 per flat and over the S20 £250 level.

The lease says something about them being painted every seventh year I think.

[eagle2]

Works can proceed without a s20 notice, the freeholder can apply for dispensation if any leaseholder challenges the charges.

[AndrewDod]

No way replacement of those windows with PVC is going to cost 5k vs 8K painting job. Replacement likely to be closer to 15K. Nor is it an 8K paint job (maybe 2K). Something makes no sense here.

[NaomiB]

Where does it say it's illegal not to do work which requires an S20 notice?

I might think the replacement or painting of the windows is essential but what if the freeholder decides it is not? I don't think we are asking for the moon.

Is there a reserve fund, that's a good question. On our accounts there is an entry £17,007 'float', £8,503 per block. The freeholder said some time ago that it was a 'contingency/float' and therefore couldn't be used. Unfortunately, £13,674 is in the freeholder's bank accounts and the rest is covering arrears. We will have to take him to court to get our hands on it.

I can't see why there should be arrears as the flats are either let or owned by people who are working or retired. I think that the arrears should be in a separate bank account covered by a loan and interest charged.

This money is made up overpayments by the tenants before 2013. The freeholder says it was kept to save having to borrow money from the bank and that they had agreed but I expect they knew nothing about it. I didn't.

On the original 1962 lease there is no provision for a reserve fund. There is on our deeds of variation for the lease extensions but the freeholder says there is no reserve fund and no monies have been collected since 2013 for one.

[NaomiB]

I have got quotes for both. Maybe painting is too high but they are not easy to paint, Crittall Windows! I've done enough of them in my time. And they would have to be done over and over. I was delighted in 1988 when we got our first double glazed windows.

This is the quote SUPPLY & FIT:
AS PER ATTACHED CONFIGURATIONS:
WHITE UPVC:
CLEAR SAFETY GLASS:
GROUND, FIRST & SECOND FLOORS:
Total price INCLUDING VAT = £2,685.00
Deposit required = £675.00
Balance on completion = £2,010.00
This was for just one block, the price has increased to £3356.25 due to the global shortage of glass. It doesn't include the doors which are already UPVC

When I fitted new UPVC windows to one of my flats I was surprised at how cheap they were.

We did have another quote for about £9000.

[AndrewDod]

If the lease does not make provision for reserve funds they CANNOT keep these funds. But you say this was added when the lease was varied?

Reserve funds covering service charge arrears eh? Nice one.

[Section20z]

Yes of course the freeholder can block s20 notices if he doesn't want windows changed.
It's his building and he may prefer to keep the original style.
I frequently do.

[eagle2]

I might think the replacement or painting of the windows is essential but what if the freeholder decides it is not? I don't think we are asking for the moon.

.

It is normally the freeholder's decision but you would need to refer to the wording of the lease. The freeholder is probably entitled to insist on repairs rather than replacement windows. You can dispute the decision and the lease should explain how disputes should be resolved.

[Section20z]

If the lease does not make provision for reserve funds they CANNOT keep these funds. .

incorrect, I do this all the time. Generally it is prudent to hold reserve funds even if the lease is silent.

[NaomiB]

There is no problem about replacing the windows. The freeholder isn't bothered about change of style or anything like that. He cares about money and perhaps keeping us short of it by approving the accounts late so we have problems getting work done in the three months before any money left over becomes 'the surplus' and gets used up tiding us over for the period until the next set of accounts and demands for payment.

The new windows will look just like the old ones but will be double glazed UPVC, they'll keep it warmer inside and they won't deteriorate in the way that the old painted metal ones have.

The freeholder owns one of the flats so he has a vested interest in keeping the service charges low.

Yes, the part of the £17K float that the managing agent holds covers arrears. The overpayment by the residents prior to 2013 is used to give free loans to the defaulters, one of whom I am sure is the freeholder for his flat.

[NaomiB]

No, he cannot keep these funds but we would have to take him to court to get them. That was what the tribunal said.