Does a freehold invalidate the terms of a leasehold?

Does a freehold invalidate the terms of a leasehold?

by Readers Question

Guest Author

9:51 AM, 7th June 2024, About 4 weeks ago 42

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Hi, two years ago I bought a flat within an Victorian building with several apartments. At the time of my purchase, my flat was leasehold. The cost of building management including service charged was apportioned by percentage, i.e square footage apportionment and I am the smallest apartment.

For example, when I bought the flat the service charge breakdown for a year being £700 for my apartment and £1400 for the larger apartments.

Six months ago, the residents collectively purchased the freehold due to unresolved issues with the previous leaseholder. We are now freeholders under a registered company. However, the directors no longer wish to follow the square footage apportionment method.

My question is: According to the lease, costs are apportioned by square footage. Does transitioning from leasehold to freehold invalidate the lease terms? Are the lease terms no longer valid because 6 of the 9 directors have voted in favor of an equal split of costs, and they are considering this the final decision?

Any help would be appreciated,

Wilde


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WIldee

16:36 PM, 7th June 2024, About 4 weeks ago

Reply to the comment left by JB at 07/06/2024 - 11:22I have been on the phone all day with the management company as at when I bought my flat and from what and they said ''it was decided that the apportionment would be calculated by square foot''

While they have always been calculating my Annual Budget at 11.1 % apportionment, they have often reiterated that my lease states the apportionment method but on reviewing the lease with them this morning, the lease does not fully declare this 11.1 % apportionment, rather a generic term is used.

I am unsure what is the direct next step in this situation but I have booked an appointment with the leasehold advisory service for next week Monday so I will wait. I have also attempt to reach my last solicitor but she's indefinitely away as per auto response.

In the meantime, the roofing work that is on-going needs payment of which I have said I am not able to to commit to at an equal share. Anyone with best advise please share.

JB

16:57 PM, 7th June 2024, About 4 weeks ago

Reply to the comment left by WIldee at 07/06/2024 - 16:36
What is the generic term that the lease uses?

WIldee

17:11 PM, 7th June 2024, About 4 weeks ago

Reply to the comment left by JB at 07/06/2024 - 16:57
There is a section called service charge as show below and have just copied the text from it.

Service Charge

2.1 The Tenant shall pay the Landlord on demand a fair and reasonable proportion of the proper
costs incurred or properly estimated to be incurred by the Landlord in complying with its
obligations, contained in paragraph 3 of Schedule 6.

2.2 The Tenant shall pay the cost of employing a managing agent but if the Landlord does not
employ a managing agent the Tenant shall pay on demand a fair and reasonable
management fee to the Landlord.

they however said that as a a management company, ''it was decided that the apportionment would be calculated by square foot'' as this was deem fit (11.1% ) and that any other management company would have done the same but note that at the moment we no longer have a managing agency.

Also my invoices for several years has the 11.1 % but not the lease.

JB

17:19 PM, 7th June 2024, About 4 weeks ago

Reply to the comment left by WIldee at 07/06/2024 - 17:11
Its a bit waffly but it sounds like you've established the proportion you should pay. Its not clear from you if this was verbal or in minutes of meetings.
If everyone else is paying by sq foot then you should too.
But I'm no expert. I hope the lease advisory service can help

Paul Routledge

6:02 AM, 8th June 2024, About 4 weeks ago

Your leasehold has primacy of contract over any unilateral agreement created by a third party at a later date.

Your lease remains in force until it is changed only by your agreement to do so.

Kizzie

8:40 AM, 8th June 2024, About 4 weeks ago

The point is this: what does your lease wording say about what you are actually leasing.

Does it say the roof ?

The roof is the structure of the building and usually falls under freeholder obligation to repair.

What does the lease wording say about what actual maintenance costs you must contribute to in addition to the Ground Rent?

You do not contribute to costs which are not written in the lease.

Before you speak to leasehold advisory service read your lease word for word.

JB

9:00 AM, 8th June 2024, About 4 weeks ago

Reply to the comment left by Kizzie at 08/06/2024 - 08:40
It would be unusual for it not to include the roof - unless the lease is very old

Judith Wordsworth

10:13 AM, 8th June 2024, About 3 weeks ago

Reply to the comment left by JB at 07/06/2024 - 13:20
I would keep to the terms of the Lease and not vary it. The Leaseholder bought his studio flat knowing full well what his % of service charges were.

Similarly you wouldn’t be able to increase the other flats service charge % unless they agreed to vary the terms of their Leases. Why would they want to?

Darren Peters

11:06 AM, 8th June 2024, About 3 weeks ago

Reply to the comment left by JB at 07/06/2024 - 13:20
In answer to Newyorkie's subquestion:

"I own 100% of a freehold where one of the leaseholders has requested a decrease in his share of the service charge"

You can agree to a decrease in his share but you cannot then apportion the cost to other Leaseholders. Ie you and your Leaseholder can agree that you as Freeholder will pay some of Leaseholder's cost but you cannot demand more from the other Freeholders than what is specified in their Lease.

Darren Peters

11:09 AM, 8th June 2024, About 3 weeks ago

Reply to the comment left by WIldee at 07/06/2024 - 16:36
The other Leaseholders cannot vote by majority to change the terms of your Lease. They might think they can but it doesn't work like that.

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