I've not consulted them !

I"ve set up a new service charge (the last 7 years we have just billed as and when needed)Everyone has always paid up.My concern is i have not followed the consultation procedeure at all,I've just told them that is what we are doing and they have to pay me!!!My question is what should i do now,should i sit tight and see what happens,and if they do pay up does this mean that they are aggreeing to the arrangement for every year after.
Another question:what happens when the tennant sells?does his aggreement to pay the service charge get inherited by the new tennant?Or do i have to start the consultation process all over again?My mind boggles!I wish I had found this forum a bit sooner,it would have saved me a lot of trouble!I had an appointment with the solicitor who wrote the leases before i sent out the service charge demand!and i must say he did not advise me anything like you guys have done,he was utter c**p,he spent most of the time staring at my t**s!!LOL .Thanking you in advance

[leaseholdanswers]

You are at risk of a challenge for some time the benchmark being 12 years for some, 6 for others.

Normally day to day costs cleaning gardening electricity as long as the contracts are 12 month or less consultation is usually required on large expenses such as decoration roofing or insurance, where any one flat pays £250. If cleaning is normally month to month even if the bill at the end of the year is more than £250 for any one flat, it would escape consultation.

It might be as well to read lease advice.org and in future comply.

You could ask a local ARMA firm/IRPM member RICS member or chartered accountant to do a management audit under leasehold reform and urban development act 1993, for you, assuming you have the records books etc, so you can assess your liability and either come clean, put the money to one side, or other options.

And when choosing an advisor either choose another woman, not exactly 100% safe, or wear a big coat

[andydd]

There seems to be a sudden deluge of freeholders who have suddenly realised that they are ignorant of the various statute laws regarding landlords/freeholders, I wonder why that is ?

Are many people (I'm assuming individuals and not companies) buying freeholds without the slightest clue of their responsibilities ?. As I've suggested before, perhaps a large percentage of tenants are completely unaware of their rights, and if they were and more started to dispute their service charges then a great many freeholders would find themselves in trouble.

Anyway back to the post, the consultation procedure only applies if each tenant will have to pay more than £250 each for works carried out, if you think you have fallen foul of this, I'm not sure what more you can do but sit tight and hope that one of the tenants does not decide to dispute the costs.

For thye future, you should make sure you are fully informed about all the various statutes that apply though.

Andy

[leaseholdanswers]

Andydd perhap its that poeple have less money and confidence and are looking at expenses to cut or complain about....

I like to think it because of people like you and I and other contributers scaring the pants off them!

[deer]

my letter i sent

thanks for you reply.I liked the bit about the coat!
The letter i sent them goes like this;
After seeking legal advice,we are implementing some changes into the service charge.there will now be a reserve for general repairs.
New estimated cost for 2011
£1000 reserve for general repairs
£500 management fee
£500 gardening
£200 electric
£300 cleaning
total to pay £2500
yours faithfully,
we dont have any accounts as such,normally if i know a big invoice is comming i get the money up front before i have to pay it!Also the t**t i went to get advice from said the money would be okay being paid into an account i have set up at my bank solely for this purpose,is this okay?its not a special one,its a step account at natwest.
thank you in advance

[deer]

you are right

thanks guys i think you are both right!We didn't actively set out to be freeholders,we just inherited the freehold title when we bought the flat,i thought i had been doing things by the book,but it turns out my book was out of date,!!! i didnt realise the law is updated so often!!
you guys are doing a brilliant job advising all us newy's.any body know of a good person i could go (and not get my t**s stared at !)in Bournemouth for some sound advice asap?i dont think im not going to be paid by my tennants,i just want to do things by the book from now on.

[leaseholdanswers]

"thanks for you reply.I liked the bit about the coat!" My cynical side, and has been used, openly and proudly, by a former colleague as a tactic, is that bad news is better accepted the shorter the skirt! The chaps always wear their best suit and tie for the tough ones!

£1000 reserve for general repairs- as long as the lease allows it.
£500 management fee does the lease allow you as freeholder to make this charge- what does it say?
£500 gardening fine
£200 electric fine
£300 cleaning fine
total to pay £2500

What about insurance and general repairs during the year?

You can only bill as per the lease so if you cant make on off bills you must ensure the estimate is adequate. Normally its estiamte and bill on set frequencies.

You must report as per the lease requirements for end of year figures, what does it say?

The bird fanciers' advice is poor. You should have a current account, hold the reserves in a seperate account and both in the name of the freeholder. The bank must recognise these as a trust account under section 42 of the landlord and tenant act 1987 and holding service charges on trust.

Lok at lease advice .org to ensure your bills are correct and contain the summary of rights, set out the period to which they relate and the freeholders name and address is on them.

[Flashback1966]

There seems to be a sudden deluge of freeholders who have suddenly realised that they are ignorant of the various statute laws regarding landlords/freeholders, I wonder why that is ?

Your comments are true but harsh. I got caught out. But the victims are Freeholders who happen to own flat(s) in the same building. On the one hand, Freeholders are supposed to tell Leaseholders their rights, on the other the Government has done a bad job in informing Freeholders of their obligations.

Try going into W.H.Smiths and you will be struggling to find a good quality book on how to be a Freeholder, yet thre are millions of Leasehold/Freehold properties.

Most flat owners are motivated to buy the Freehold due to the diminishing lease. The ground rent is not any motivation.

I prefer a block run by an owner-occupier rather then some faceless rip-off investment firm 200 miles away.

[andydd]

.

Try going into W.H.Smiths and you will be struggling to find a good quality book on how to be a Freeholder, yet thre are millions of Leasehold/Freehold properties.

True, I think that most authors assume that freeholders are rich large companies who already know all about freehold law or at least have unlimited access to lawyer to handle it for them.

As mentioned in another thread too, it is quite difficult to get hold of a book that takes into account recent changes in the law, it is vitally important when you pick up a book to have a look at the date it was written.

Andy

[deer]

my final reply

thanks everybody ive gained some more important advice from the people in the know!Just to set the record straight there are 5 flats,over 2 floors,we ,the freeholders live in the ground floor flat.the lady we bought the flat from, converted it from a hotel,sold the remaining flats to her children,and the top flat to a developer.after we bought her flat the children gradually sold up,the developer sold just as we moved in.We never set out to be Big Shot Free-holders,but now i find out the L&T Act treats us the same as it would treat a big city firm doing the same job,but on a larger scale,with a much bigger profit!Not fair me thinks!Anyway from now on i'm playing things by the book.Look out for me again soon,i'm very sure i will be back again for more of your sound advice.

[leaseholdanswers]

I prefer a block run by an owner-occupier rather then some faceless rip-off investment firm 200 miles away.

The good thing about the latter is that they have deeper pockets, its less personal if there is a dispute, and they are less likely to cock up the management with strange ideas