What action next against a Freeholder ?

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  • BlueMystery
    replied
    Initially we wanted to purchase the FH under the Section 5, but the FH has made it clear he will not sell to us, will keep increasing price.

    We believe the Agent acting is the interested party and they are based 250+ miles away. The Agent claims to be a larger entity than their accounts suggest. RTM is the other option we have discussed - trouble is apathy amongst people expecting one person to do everything.

    We are actually the longest leaseholder, the other 6 have all purchased in the year following us - several of us because of other experiences had only agreed on the understanding that the FH maintained his promise he was going to stay on site - a total lie as it transpired.

    I had already emailed the Agent with regard the issues and he simply was not concerned, saying take it up with the FH - who doesnt reply.

    With the apathy of several of the others I feel that if a couple of us could pursue him in the Small Claims Courts for refund of fees paid and incorrect GR paid, it might encourage the others to then shake themselves up. The ones who are keen are of the opinion why should they spend money to sort the problems out via the FTT, when others cannot be bothered.

    Ownership of the FH is not critical to my way of thinking now, as long as we can get people to pull their weight with regard a RTM being established, more so if the intrepretation of the lease is correct and we should only have been billed Annually in arrears as it suggests for Maintenance costings.

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  • siva
    replied
    Anything in there regarding the accounting period and/or mechanism for demand & payment of items from fourth schedule?

    What do you want to happen?

    It would appear that the current freeholder doesn't want to manage the property properly. Do you know anything about the proposed purchaser? Clearly the freeholder doesn't want to sell to the leaseholders so allowing him to sell to a proper LL might work out for the best. If that doesn't work out you can always form a RTM company at a later date.

    If you want to stop the sale then you could mention that there are questions over historical service charges. There is legislation which requires that demands for service charges must be made within 18 months of the cost being incurred. Your lease looks as though it doesn't allow advance demand for payments so this legislation might apply for the leaseholders who have owned for longer than you have.

    Given these issues it might not be in your best interest to own part of the freehold.

    You really need to give an idea of what you hope to achieve and whether you are prepared to start legal action at tribunal or in the Courts.

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  • BlueMystery
    replied
    I think this is the section you want re the fourth schedule.

    Definitely cannot see anything re a Reserve Fund in the Lease - only in questions in the conveyancing paperwork

    Have never received an Invoice for Reserve fund or anything like that again this amount which is paid by standing order was in conveyancing information and we just set it up with the information provided.

    For the 2015 Ground Rent - we received a receipt of payment that was all. And a mention the first Maintenance payment had been received.

    2016 we had an email invoice for GR - which does not comply in any shape or form with legal requirements.

    We have requested proper invoices, sight of accounts and sight of Insurance Paperwork until we are blue in the face, we also requested permission to drill a hole through the external wall to assist with a damp problem - again no response other than when we wrote collectively to receive the abusive tirade email back which I documented elsewhere on here.


    IMG_0008.jpg

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  • siva
    replied
    There may be somewhere else in the lease that mentions a reserve fund.

    Where in the lease does it refer to the fourth schedule?

    I know you have the statement in the conveyancing questionnaire in regard to the £1100 but in regard to the payments you have made you can't say they are made in part or in full to the reserve fund. You stated earlier that you had received invoices by email. What do these say?

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  • BlueMystery
    replied
    further page

    IMG_0005.jpg

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  • BlueMystery
    replied
    Well this is the relevant fourth schedule I have had emailed to me - I can see nothing about having to pay monthly into a Maintenance Fund just having liability to pay 1/7 of any bills


    IMG_0016.jpgIMG_0017.jpg

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  • siva
    replied
    Originally posted by BlueMystery View Post
    Going to request a further copy of lease
    OK. Report back when you know what the lease says.

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  • BlueMystery
    replied
    Originally posted by siva View Post
    You mention monthly fees. Are you paying a monthly direct debit or standing order? Why are you paying this if you have never received a demand? How much have you paid since October 2014, ignoring ground rent?

    *** There was a conveyancing questionnaire during purchase where it was indicated how much the FH wanted paying monthly for Maintenance, and Annually for Ground Rent. Invoices were formally requested but he never provided anything at the time - the solicitor advised us to pay by Standing Order until further notice. They did not pick up that the GR had been increased outside of the contractual terms. Appx £600 has been paid out so far exc GR


    What does the lease say in terms of what the freeholder can demand and when? In advance of incurring costs or in arrears?

    **Going to request a further copy of lease as this section has not been supplied clearly - what seems strange is there is no mention of Fees to be paid to him for maintaining but only reasonable fees to a Managing Agent

    My initial feeling is that payments should infact be in arrears but as mentioned the copy I have is not clearly definied by whoever copied it


    Does the lease refer to a reserve fund?

    **As above uncertain at this stage BUT in conveyancing questionnaire was the question is there a Reserve Fund and what is the balance - and the reply was Yes appx £1100


    Is the property now in good condition?
    **Reasonably - no obvious major expenditure forseen

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  • siva
    replied
    You mention monthly fees. Are you paying a monthly direct debit or standing order? Why are you paying this if you have never received a demand? How much have you paid since October 2014, ignoring ground rent?

    What does the lease say in terms of what the freeholder can demand and when? In advance of incurring costs or in arrears?

    Does the lease refer to a reserve fund?

    Is the property now in good condition?

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  • BlueMystery
    replied
    The Ground rent he has been charging £100 - ok not a lot but the Lease Contracts clearly stated £50 and they cannot be reviewed until 30 years had elapsed

    With regard funds when we purchased in October 2014, he advised in the conveyancing papers a credit balance of appx £1100 from memory. However when the last flat sold in October 2015 his solicitor used exactly the same form he had completed for us a year earlier.

    To our knowledge he has collected in the region of £3500 to £4000 in fees since the stated balance.

    October 2014 was when all major maintenance was finished. The only expenditure since has been about £10 a month for the minimal communal electric (based on a spreadsheet he supplied for previous years - not accounts), about £500 for insurance and about £50 cash in hand to someone to vacuum -- that is it in the period since we purchased ourselves.

    He has never given a breakdown of what the monthly charges were allocated as, and has never raised an invoice not even annually. Yet he claimed in the email he was now owed money from the fund.

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  • siva
    replied
    Originally posted by BlueMystery View Post

    However in response to a request for sight of Audited Accounts (which we know do not exist) we received an email tirade full of libellous comments, and derogatory remarks, finalising that no matter what we accepted he would keep putting the price up as people did not accept his illegal verbal offer last year.
    OK, that's not good but your best option to get rid of the guy is to either to buy the freehold or let somebody else. You are very unlikely to come away with any penalty or fine for the freeholder unless something serious can be proven. Pursuing things like failure to provide accounts and libel tend to be a waste of time and money. Very annoying for you but the powers that be tend to consider these things as trivial unless financial damages are considerable.

    You don't mention the level of repairs etc. that are required - this is the important thing to consider. If some of the repairs are due to the fact that problems haven't been addressed in a timely manner then the freeholder, whoever it is, may not be able to recover their expenditure from leaseholders.

    You don't want to be taking on this risk yourselves and you don't want somebody buying the freehold who doesn't have the funds to deal with the problems. For example, you don't really want a limited company with no other assets buying the freehold.

    I think you have mentioned the freeholder is holding contributions by leaseholders. Do you have any idea how much this is? What has been contributed over the years and what estimate do you have in terms of how much the freeholder has spent? You don't really mention service charges, just rent. Other than rent, how much have you been paying and what was this supposedly for?

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  • BlueMystery
    replied
    Hi - the problem we have with buying the freehold is assorted.

    Firstly the FH offered it verbally to a couple of owners - he deemed that his only legal requirement.

    Now we are faced with apathy as a couple of the owners are intimidated by the FH abusive tirade

    In due course a Section 5 was received which we all accepted.

    The day our acceptances were received with the Agent a further increased Section 5 was issued which we are still considering.

    However in response to a request for sight of Audited Accounts (which we know do not exist) we received an email tirade full of libellous comments, and derogatory remarks, finalising that no matter what we accepted he would keep putting the price up as people did not accept his illegal verbal offer last year.

    From conversations with the Agent acting it seems he is the interested purchaser - he has been notified and was even copied in by the FH to the abusive email

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  • siva
    replied
    I apologise if I've missed something. I've read through the thread but very quickly

    I think one thing you should consider when offering to buy the freehold is the state of disrepair. As andydd points out earlier a demand from the freeholder (even a new one) to remedy a disrepair that is the result of negligence can be deemed unreasonable and therefore not payable. So anybody who buys the property will be responsible for repairs may not be able to recover all their costs.

    With this in mind, you might want to consider whether this should be brought to the attention of the potential purchaser.

    If there's nothing along these lines then £6000 + legal fees doesn't sound like a bad deal, assuming the rent is actually £700 per year and reviewed every 30 years. I'm taking the estimate of £2000 legal fees from earlier.

    In this time of low interest rates it would be worth taking £2000 out of a savings account in order to save yourself £100 per year. So, even at £12,000 plus legal costs it's not a bad deal in purely financial terms. Although you then have the responsibility/hassle of maintaining the property, etc.

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  • BlueMystery
    replied
    Thanks for this

    I think my various courses of action are

    1. To nag away at Council, bring it to the attention of local MP

    2. Small claims for repayment of 2015 paid Ground rent

    3. In the absence of accounts Small Claims to recover Maintenance Charges paid, deducting a 1/7 as share of insurance, a nominal fee re the cash in hand cleaning, and a nominal amount less than a normal Company would charge in Admin from my claim


    As I have said many times the FH considers himself above the Law. I have advised the Freehold Agent acting with the Section 5 of the outstanding issues - as he is the primary party interested in buying the freehold for himself that makes it even more interesting.

    The key concern at present is the Insurance of the building, but the apathy of a few of the owners who are intimidated by the FHs libellous and name calling do not make this an easy solution to sort.

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  • andydd
    replied
    1. I dont know, but damages are supposed to put you back in position before the incident occurred, so for example someone crashes into you, damage costs 200, so claim would be £200 or maybe plus cost of hire car, no hard and fast rules on this.

    2. Think you misunderstood this, historic neglect means that house should of been painted, but it wasnt, FH does repairs 5 years later but now cost is far more than if he had just done cheap paint job originally.

    3. NO you cant go to SC court, law only gives power to WITHOLD not claim back money already paid, unless for example you overpaid ground rent.

    4. Yes that is problem im having with someone else im helping, they just wont break down the service charge even through its the FH who has started legal action, there are provisions of CPR that can force parties to comply/disclose but its not easy.

    5. No surprise here,. law is pathetic here..also annoying is that there is high court case where LH asked judge for injunction to force FH but judge said no need as law already allows prosecution..but as youve found out when asked LA do nothing !!

    9. Yes youve found another problem, like me, my FH has no management agent, he manages himself, does he need to belong to redress scheme ?, its unclear but prob not, this is stupid as it provides big loophole for bad FHs !!

    10. Yes..another problem. you dont know what M fee is (again, this is issue ive got with friend im helping !!).

    Generally leases are assigned so any debts/credits that affected original LH and FH get carried onto new one.

    As for future claims, there is recent FTT/Upper Tribunal case where they said that future claims dont have to follow previous claims even if its same LH and FH, that is just bloody ridiculious... See here > http://www.landstribunal.gov.uk/Aspx/view.aspx?id=1233

    Ive tried to list all the possible actionj you could take, as youve found out us LH get rightly screwed and the law is an absolute mess.

    Ive personally been quite successfull against my FH, Ive njot paid thousands and been awarded about £2000 in various claims BUT a lot of this is down to my FH being rather pathetic and employing some equally useless solicitors.

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