£230k Lease Extension, £12k Service Charges and 10 Years of Neglected Repairs?

My uncle, who passed away this year, owned a leasehold flat in Westminster. He extended the lease in 2017 at a cost of £230,000.

The property is currently being managed by the executors through probate. Despite paying a large sum to extend the lease, the roof of the building has been leaking for over 10 years, and despite numerous complaints, the freeholder has not addressed the issue.

The flat incurs annual service charges of over £12,000, yet this has led to significant damage in the flat, requiring frequent repairs. The neighbouring flat has become completely uninhabitable due to the leaks and is now vacant. My questions are:

1. What rights do leaseholders have when a freeholder charges excessive service charges but fails to carry out necessary repairs and maintenance?

2. What rights do leaseholders have when a property becomes uninhabitable due to neglect by the freeholder?

3. Given that the freehold was purchased at auction in May 2024, how much time should we reasonably allow for the new freeholder to address such serious repair issues?

Many thanks

Eddy

Editor’s Note:

1. Excessive Service Charges with No Repairs

Leaseholders are entitled to challenge excessive service charges and poor maintenance under several provisions in UK law. Specifically:

• Landlord and Tenant Act 1985: Section 19 states that service charges must be “reasonable,” and if the freeholder fails to carry out necessary repairs, leaseholders have the right to challenge these charges at the First-tier Tribunal (Property Chamber). The tribunal can determine whether the charges are excessive given the lack of upkeep, such as the roof leaks Eddy mentioned.
• Right to Manage (RTM): Leaseholders also have the option to form a Right to Manage company, taking over the management of the building from the freeholder if they feel the building is being neglected. This right, established under the Commonhold and Leasehold Reform Act 2002, allows leaseholders to take direct control of repairs and maintenance.
• Action for Specific Performance: Leaseholders could potentially sue for specific performance, requiring the freeholder to carry out the necessary repairs.

2. Rights When the Property Becomes Uninhabitable

When a property becomes uninhabitable due to neglect by the freeholder, leaseholders have several potential courses of action:

• Statutory Rights: Under the Landlord and Tenant Act 1985, the freeholder has a duty to keep the property in good repair, which includes the common parts of the building like the roof. Persistent failure to carry out repairs could be considered a breach of this duty.
• First-Tier Tribunal: Leaseholders can apply to the First-tier Tribunal to determine that the freeholder has failed in their repairing obligations.
• Withholding Rent: In cases of serious neglect, leaseholders may also have a right to withhold part or all of the service charges (though they must be cautious with this, as it could lead to a legal dispute if not handled properly).

3. Time for New Freeholder to Address Repair Issues

Given that the freehold changed hands in May 2024, the new freeholder is expected to address significant repair issues reasonably promptly. The timeframe would depend on the severity of the repairs, but typically:

• Reasonable Timeframe: The new freeholder should be allowed a reasonable time to assess the situation, especially for substantial repairs like a leaking roof. It would not be unusual for an issue of this magnitude to be addressed within a few months, as surveys, obtaining quotes, and arranging contractors can take time.
• Interim Measures: In the meantime, temporary repairs or steps to mitigate further damage should be expected, especially since the flat and neighbouring properties have suffered significant deterioration.

If the new freeholder delays excessively, leaseholders can escalate matters through the aforementioned tribunal or potentially claim damages for further deterioration of the property.

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