Utilities

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    Utilities

    G'day,

    I am a freeholder for a block of flats that was being managed by a company that went bust. They were paying the utility bills, but obviously that stopped and by the time I found out the extent of the problem the flats were close to having their electricity cut off.

    To resolve the situation I put the utility contracts in my name and pay the bills, with the understanding that the leaseholders pay their share of the bills and, supposedly, getting the money from their tenants. With some tenants by-passing the card meters, this has posed its own challenges!

    While some of the leaseholders abide by this arrangement and pay a regular amount, others have not and this is causing me a problem.

    Their argument is, and I can quite understand this, that it is the tenants who should pay utility costs. My position is that I'm simply the middleman between the suppliers and users, and how the leaseholders recover their money is down to them and the management company they use to secure tenants.

    I had agreed to receive a peppercorn rent from this block at best, although haven't charged anything until the problems with the whole block are sorted and each flat can wash its face. Costs such as refurbishment are being collectively agreed upon and shared among the leaseholders.

    Meanwhile I am seeking quotes to provide each of the flats - there are 13 in all - with their own meters and supply that will place the emphasis to pay the utilities in the hands of the tenants. I suspect this might be quite expensive though.

    I am happy to keep on paying the bills as it's the most cost-effective solution, providing the leaseholders/tenants reimburse me for the costs. I do show each leaseholder copies of the actual bills.

    Does anyone have any suggestions how to move this forward? Where would I stand if I lumped all costs into a service charge?

    Many thanks.

    #2
    Employ another Management Agent or do it yourself ?

    Surely ultimately as freeholder you are responsible.
    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


      #3
      Originally posted by andydd View Post
      Employ another Management Agent or do it yourself ?

      Surely ultimately as freeholder you are responsible.
      Am seeking another management agent.

      Precisely what am I responsible for in this case?

      Comment


        #4
        Originally posted by Stratocaster View Post
        Am seeking another management agent.

        Precisely what am I responsible for in this case?
        Well even with an agent you are still responsible, as they merely do it for you.

        1: Read the leases. This sets out what leaseholders and you have to do, how you set out the costs, and when to bill for it. Agreeing as and when is frankly wrong.

        2: Utilities
        Scenario 1; This is a common supply which you pay for the common parts only, and each leaseholder has to take out a contract with a supplier for the flat.

        Scenario 2; In newer build there is one meter with individual flat check meters. The lease will specify how these are collected and when.

        (This is unlikely as if flats have prepayment card meters, they have their own individual supply and contract. Get an electrician to inspect and advise you).

        In either case, the lease will more than likely require the leaseholder to pay as a service charge or "utlility rent" BUT they, not you, re bill any renters, as they have no contract-lease- with you.


        So read the lease, then get an electrician to explain what is going on on site.
        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.

        Comment


          #5
          You are responsible for the Landlord's covenants.
          The leaseholders are responsible for the tenants covenants.
          Check all the leases so you know what you are reponsible for!
          Sounds to me like you don't know any of the above, (sorry!) So I advice you to hot foot it to your nearest ARMA member(That is short for Association registered managing agents) I think!, and hand the whole thing over to them.
          Where abouts is the block located?Somebody on here might be close to you and could help.

          Comment


            #6
            Originally posted by Stratocaster View Post
            Am seeking another management agent.

            Precisely what am I responsible for in this case?
            You are the freeholder and therefore responsible for the landlords covenants, as hollyhead pointed out, being a freeholder obliges you with many responsibilties under the lease and statute law, not following/understanding them could leave you in a mess/out of pocket/even liable for criminal prosecution.

            Andy
            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


              #7
              Thanks all.

              I live just outside of Ipswich, but the flats are in Skegness. You're right Hollyhead, I have a steep learning curve ahead of me to get on top of this! I'll look up the contact you suggest.

              Comment


                #8
                Well done.
                Don't learn the hard way like me.
                This landlord buisness is not a walk in the park,rules and regs are constantly changing and being updated.Get yourself a copy of the "service charge residential management code' 2nd edition about 20 quid from RICS,and your eyes will be widened!my advice Do not do any work until you know what is recoverable,because you might be left seriously out of pocket. Come back here if you have any more questions and we will try to help.Good luck.

                Comment

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