Does a freehold invalidate the terms of a leasehold?

Does a freehold invalidate the terms of a leasehold?

9:51 AM, 7th June 2024, About 6 months ago 43

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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 Are the lease terms no longer valid because 6 of the 9 directors have voted in favor of an equal split of costs, and they are considering this the final decision?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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Stech Te

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5:16 AM, 9th June 2024, About 6 months ago

The share should be based on the kind of maintenance charge. Most of the cost would be towards maintaining garden, cleaning common place, fixing issues at common place, possibility water, etc. Why the smaller flat has to be charged less for this, they equally use the space along with others. Except for the building insurance almost almost all cost should be equally shared. You can reach out to court if there is a unfairness, but I couldn't find one.

Stech Te

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5:31 AM, 9th June 2024, About 6 months ago

If they are changing equally for building repairs and insurance they have to give equal share on everything. For example if the building is demolished you will get equal share of land. If there is a insurance payout you will get equal share. If they all in writing then you are in better place. If you are not getting all equal benefit, then it is not fair. This unfairness treatment can stand in court or any tribunal.

WIldee

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5:48 AM, 9th June 2024, About 6 months ago

Reply to the comment left by Stech Te at 09/06/2024 - 05:16
Thank you!

Just so I am 100% clear, your point is that in my case you do not perceived any unfairness with regards to the equal split across all flats for the roof repair and, you deem this split to be fair even though the monthly service charge has historically been charged by apportionment , i.e square footage?

yl2006

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8:21 AM, 9th June 2024, About 5 months ago

Reply to the comment left by WIldee at 09/06/2024 - 02:00
On your point about rectifying the lease when you come to sell, you cannot amend other people's leases against their will; so if their leases state 'a fair proportion', then a fair proportion it remains until they agree otherwise.

Regarding apportionment of costs, as the leases are not explicit, the managing agent/freeholder will have to justify whichever method you use. Historically, costs have been apportioned in a particular way and thus would prove easier to defend. If you' now wish to change from one apportionment method to another, there are bound to be winners and losers so be prepared for a (legal) challenge.

Kizzie

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10:14 AM, 9th June 2024, About 5 months ago

You misconstrued my statement that the matter to be ‘sorted’ before sale of the lease to the flat.
‘Sorted’ in the sense of compliance with the provisions of the lease.
The Supreme Court ruled in 2015 that the actual wording of a lease must be complied with even if it doesn’t make sense.
The wording can be varied if granted by the Court and with consent of all parties to the lease but it depends on if the lease allows variation.
If the landlord is a superior/ Headlease then variation not allowable

WIldee

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2:30 AM, 12th June 2024, About 5 months ago

Reply to the comment left by Simon Lever - Chartered Accountant helping clients get the best returns from their properties at 07/06/2024 - 12:21
I sent the below email to my neighbours, whom are also the freeholder, we are all part of one freehold, all 10 of us neighbours and, someone responded with the last message to the freehold whatsApp Group.

Dear Freeholders,

Until now, my proportion of repairs and maintenance costs for my flat has been 11.15%. Is your decision to change my proportion to 20% based on advice from a Chartered Building Surveyor, or other suitably qualified professional? If so, can you provide me with a copy of their report?

You have ignored the Landlord and Tenant Act of 1985. My lease requires that my proportion is fair and reasonable and you are attempting to overcharge me for the current repairs. The vote that you have cast is unenforceable, it is a breach of my Lease, it is not binding to me. You cannot override my lease and the law by holding a vote, and if you believe otherwise, feel free to present your vote as evidence at a Tribunal.

If you are unable to provide reasonable evidence that 20% is a fair and reasonable proportion, I will most certainly challenge any future Services demand based on a 20% proportion at a Tribunal.

On that basis, I will pay a final payment of £524.05 (under protest) for the current repairs, bringing my total payment up to £1,319.05 which yet again represents over 11.15% of my total cost and If the Tribunal decides in my favour, you will obviously be required to refund my overpayment.

On both 15 and 17 thicket road, there are flats with floor areas that are two and a half times greater than mine, likewise, their value. I will only agree to pay 11.15% of any valid future repair bills for my block. If you believe that any of my actions are unreasonable, I suggest that we go to a tribunal to settle this.

Your's faithfully,

EA,

*Message from a co-neighbour who is also part of the freehold*

As you will see from his email, he has decided his own contribution to these major works.
Please can everyone transfer £46.22 to the bank account so that we can pay the contractors on time.

The basis for his decision is unfounded, specifically the fact that no one has a lease anymore effective from the date we became freeholders, so historic precedents are irrelevant and do not apply, and we don’t have a landlord so the Landlord and Tenancy act does not apply.

Note:
1) He said that the basis of my decision is unfounded and no one has a lease anymore since we became freeholders?

2) I'm i right in thinking that this particular person has a poor understanding of whats happening?

3) We don’t have a landlord so the Landlord and Tenancy act does not apply.

Is the above True or False? does this not means am at the mercy of my co freeholder and they can do as they please, just like the subject of my thread, does a freehold

Invalidate the terms of a lease?

His comment about the irrelevance of my lease, is it T/F?

Darren Peters

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6:05 AM, 12th June 2024, About 5 months ago

I would get in touch with the LVT since I suspect the other Leaseholders are going to be confused and this will continue to cause problems down the line until settled.

WIldee

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6:22 AM, 12th June 2024, About 5 months ago

Reply to the comment left by Darren Peters at 12/06/2024 - 06:05You mean the other lease holders will be confused with his response that:
'' The basis for his decision is unfounded, specifically the fact that no one has a lease anymore effective from the date we became freeholders, so historic precedents are irrelevant and do not apply, and we don’t have a landlord so the Landlord and Tenancy act does not apply''
are you referring to his message or my message far above?

Darren Peters

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6:38 AM, 12th June 2024, About 5 months ago

Reply to the comment left by WIldee at 12/06/2024 - 06:22
Yes, the former. the comment on the Whatsapp group,

"The basis for his decision is unfounded, specifically the fact that no one has a lease...",

will confuse the other Leaseholders and, I suspect, cause further problems down the line.

Perhaps book a phone call with Lease-Advice:
https://www.lease-advice.org/about-us/

In any case, please let us know how you get on going forward.

Kizzie

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8:13 AM, 12th June 2024, About 5 months ago

The property ownership is share of freehold interest held in a resident owned freehold management company limited liability registered at Companies House and each title to each lease has a £1 voting share and you are responsible for repairs to the property structure and ,if any ,parking area known as the common area , in joint ownership and all must agree to any resolution by vote.
SEPARATELY each leaseholder holds a lease as tenants in common and
the man co also acts on behalf of the landlord and each leaseholder must perform their obligations in their lease protected by Landlord & Tenant Act etc.and pay service charge into Section 42 trust account. These costs are listed in the lease and leaseholders are not liable for any maintenance ie service charge cost WHICH IS NOT IN THE LEASE

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