Missing Reserve Fund / Maintenance Fund

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Missing Reserve Fund / Maintenance Fund

    Our Freeholder sold at auction the title deed and the new owner has now send demand for ground rent, service chaarge / insurance aportionment.

    We (3 leaseholders) have demanded the account statement for the Reserve Fund / Maintenatnce Fund which should have approximately 1000 pounds in it from 2006 carried forward. The new owner (freeholder) states the previous freeholder did not pass the accounts or balance to her on completion, and that if we believe we should have a balance we should take this up with the previous freeholder.

    I have stated this is not the correct approach, that her solicitor hsould have made enquiry of the reserve funds etc prior to completion, and the responsibility for its safekeeping and management now lies with the new freeholder. The new owner is now threatening a small claim if we dont pay the 2007 ground rent immediately and has stated she will simply produce and account hsowing a nil balance in response to our s21 LLT act notice.

    Help! surely you cant purchase a freehold title and expect all the benefits of the lease without any of the responsibilities? It is explicit in the lease that the FH manages the reserve fund etc. If the new FH refuses to engage regarding the balance that is now missing - where do we go to seek redress?
    Surely its a simple case of theft by the previous FH however the new FH will be liable?

    Barnaby51

    #2
    Report the theft of reserve fund to the Police . Money belonging to the service charge account is deemed to be held in trust for the lessees.

    Why haven't the 3 leaseholders clubbed together to buy the freehold ?

    Comment


      #3
      It's conceivable that new L is not aware of any arrangements on completion.
      Old L might have allowed new L to deduct reserve fund from purchase price. This is called an "allowance"; new L effectively takes over that amount istead of paying full p/price then receiving service charge account cheque.
      Ask new L explicitly to find out whether its sols. made this type of arrangement.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

      Comment


        #4
        Thanks for the prompts I have made a complaint to the police and expect they will take statements shortly.

        Do you think we have any grounds for withholding any further payemnts in respect of the 2007 ground rent until this matter is resolved?

        I acknowledge the reserve account is for maintenance, but would we have a defence to a small claim on the basis the previous years payments have never been evidenced as used for purpose and therefore our current 'account' with the freeholder is in credit? We all paid 600 last year each, the GR is 200 p/annum and we should have plenty of credit left...

        Thanks for your advice, Barnaby51

        Comment


          #5
          Originally posted by barnaby51 View Post
          Thanks for the prompts I have made a complaint to the police and expect they will take statements shortly.

          Do you think we have any grounds for withholding any further payemnts in respect of the 2007 ground rent until this matter is resolved?

          I acknowledge the reserve account is for maintenance, but would we have a defence to a small claim on the basis the previous years payments have never been evidenced as used for purpose and therefore our current 'account' with the freeholder is in credit? We all paid 600 last year each, the GR is 200 p/annum and we should have plenty of credit left...

          Thanks for your advice, Barnaby51
          2nd para: no. Ground rent is pure profit for f/r. It has no bearing on service charge (payment for services).
          3rd para.: Ditto, and s/c should also cover payments into a reserve ("sinking fund") which may explain apparent surplus.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            Gawd...

            The Police now tell me they consider this is a civil matter between us and the previous freeholder, that we should be issuing proceedings in the county court.

            I'm very confused but am makin a complaint about it to them as I'm sure this is permanent deprivation?

            Can someone explain the poition clearer?

            Thanks

            Comment


              #7
              Go to your local Citizens Advice Bureau ( attached to your Council Ofice) and get them to explain what you have to do.

              Comment

              Latest Activity

              Collapse

              Working...
              X