Lessee refuses to pay his share of costs and threatens to go to LVT.

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    Lessee refuses to pay his share of costs and threatens to go to LVT.

    We are due to engage in a month's time in some works on the outside of our building. Of the 24 flats, just 1 refuses to pay claiming that about 5% of the works is not covered by the Lease. We the Lessor who are made up of all the owners firmly believe the Lessee must pay his share of costs for the works which were preceded by s20 notices.

    To move the works along, we have offered the Lessee the chance to deduct the 5% he disputes from his costs but he says he would rather have the matter decided at the LVT.

    The Lessee's rational does not make any sense to me as the Lessor is offering him exactly what he expects from the LVT but without the burden of costs which the LVT would place on both parties. Will the LVT take this into account and reject the Lessee's application on the basis of time wasting?

    #2
    No, they won't reject his application but you may have an argument that he has behaved unreasonably when it comes to any cost orders.

    Have you already raised the money needed for the works?

    Edited to add - this is probably a tactic to delay payment rather than any genuine issue over your intended expenditure. Call me a cynic.

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      #3
      We have raised all funds except that owed by one whose money we need to complete the funds for works which include replacing a dangerously weak roof.

      Part of the repair costs are for insulation and replacing water tanks which were also found to be rotten in our old roof. The cost of the smaller works is about the same as the amount owed by this one Lessee.

      Given the dangers associated with a weak roof, do you think we should just press ahead and replace it with the money we have and leave the smaller jobs until all funds are in place? We weren't too sure about starting because our Agent said that we should only start after we have successfully sued the Lessee in order to account for all monies.

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        #4
        If the two jobs can be done seperately without incurring extra costs I see no reason why you shouldn't go ahead with the roof, but your agent is best placed to advise you. What part of the work is the lessee objecting to?

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          #5
          Do you think the two jobs can be done separately even though they are under one contract?

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            #6
            Whether it's physically possible I have no idea - ask whoever specified the work. If it's just a contract issue, that would depend on the terms of the contract, the contractor, and perhaps the agent's relationship with them. I have split contracts (time-wise) before with no problem. A word of caution though, you may run into problems if you award a contract and then the LVT rules some items under it unrecoverable - which is probably why your agent is advising caution.

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              #7
              If the LVT says some items are unrecoverable, does that mean they would limit the lessees' costs to £250 or they would simply reduce his costs by the value of those items which he believes are not covered by the Lease?

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                #8
                Provided the s20 consultation is carried out properly they would reduce the costs by the value of the unrecoverable items. You might be at risk of invalidating the s20 process though, if you were to include items which you know to be unrecoverable. It all depends on the circumstances of each case and LVTs are unpredictable.

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                  #9
                  At the time, I believed we issued the s20s in the correct manner. I am reviewing the specification right now and still feel that the vast majority of the contents is recoverable. But I have spotted one small item of a value below £100 which I think is debatable. Also, there are 3 more small items which have since been removed from the works because building regulation would not approve them but they did form part of the s20 and have not yet been removed from the charges.

                  I find it hard to accept that such small errors could result in invalidating the s20s and put at risk much needed works. But as I said at the start of this thread, we have invited the Lessee to deduct the costs he is disputing. Is there anything else I can do protect this project from going pear shaped?

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                    #10
                    If the errors are are small it probably won't - but you are asking me to make a judgment on a situation the facts and detail of which I know next to nothing about.

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                      #11
                      You have been very kind to offer the advice you have given and I appreciate you can offer only general advice. I think I will just have to wait and see what the LVT say. Fingers crossed.

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                        #12
                        I wish you luck!

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                          #13
                          Originally posted by mixedveg View Post
                          You have been very kind to offer the advice you have given and I appreciate you can offer only general advice. I think I will just have to wait and see what the LVT say. Fingers crossed.
                          As a rule of thumb omitting items and reducing the cost are easier to deal with than adding costs which have not not been calculated on. As long as the cost change is reasonable in itself.

                          You do need to ask, as Tulula has posted, if some works can be deferred, it might require an open roof to install new tanks or involve woks that are more expensive if contractors have to return. That said the contractor might be happy to defer works and bill accordingly.

                          The small things can only be eliminated by asking your agent or a chartered surveyor that deals with these works and LVT work to look at your files, perhaps with a solicitor, and assess the implications of reordering work, the process that you followed and the application that you have made. Better to check first, or withdraw and resubmit than appeal.

                          In offering a discount are the RTM members aware that they have to personally agree to make up the difference as this cannot be added to their service charge.....
                          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

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