Forced maintenance charge by my freeholder?

Hi Jonathan,
The answer to this is within the terms of your lease.
Unfortunately though, it would not be at all uncommon for your lease to commit you to being legally obliged to pay your share of these works.
I am not sure what you mean regarding getting help to pay but you may want to speak with your bank, or alternatively the freeholder may provide a loan.

Read your Lease.
You won’t be in breach of contract but of your Lease terms, depending on how your Lessees obligations are structured. But you are liable for your share of this, plus all the other ongoing service/charge maintenance annual costs.
Your Lease will have details on how you pay for service/ maintenance ie in advance or in arrears, whether paid annually, biannually, or quarterly. Whether sums can be requested on demand.
The freeholders can sue you should you not pay, or issue a s146, which would likely fail should it reach court. Your Lease should detail consequences for non-payment as well as Lessees obligations.
How long have you owned this property? How long have these issues needed addressing?
A PRS landlord should always have a working float, or avenue to raise maintenance monies, and importantly not have such a large loan to value that means when large bills come in. Bearing in mind the age of the property there will always be something that needs doing, having the cash to pay these is imperative.
Contact your mortgage company for a short term top up, and I know that negates my previous paragraph; put the amount required on a or more credit cards, appeal to family for a loan. Worst scenario speak to your freeholders and see if they will loan you the money and terms for repayment.
If you decide to sell up you will still need to find the funds to do this, drop the price to reflect this or be subject to a retention on the sale monies.

Sorry don’t mean to sound harsh but being a PRS Landlord is not, and actually never has been, for the feint hearted. It’s going to get worse no matter who comes in to power next week.

As others advised you to read your lease to see what is included in your Title. This may be in first schedule. You are only liable for service charge for the costs written in your lease. So is the garden included in your lease?
If it’s not then you’re not liable and it may be that if garden maintenance has not ever been a cost to service charge in the past then you are not liable.
It is a cost to the freeholder.Your lease for which you paid a premium and the asset on which your mortgage is secured. Your mortgage company may have a legal department who will look at your lease and advise whether the garden is included in your lease.

I agree with the above and the lease provisions.

Do you have a legal expenses policy attached to your insurance? It may be worth contacting them for formal advice and if necessary, they could write on your behalf to the freeholder.

Many flat owners complain about service charge levels without fully appreciating what they are actually paying for.

If you owned a freehold house you would be paying for all structural repairs (e.g. walls, roofs, windows, etc.) as well as grounds maintenance (perhaps offsetting some basic gardening to the tenant).

If you buy, or own, a leasehold property that requires repair work, who do you think is going to pay for it?

In recent years building costs have risen and block managers have significant health and safety obligations, so cannot just appoint a bloke from the pub for cash. This can sometimes make repairs seem expensive.

Not getting work done often adds to the cost and is often unfair on those who are willing/able to pay in order to keep the standards of their property up.

The lease is a legally binding contract setting out exactly what maintenance costs allowable under the provisions of the lease.
Section 21 landlord & tenant act 1985 gives the tenant ,the long residential leaseholder, the statutory right for these costs to be reasonable and allowable under the lease and under section 21 (1) to inspect the accounts.
The lease is the asset on which the mortgage is secured and therefore cannot have extra costs added in not stipulated in the lease and borrowed against by the leaseholder.

Reply to the comment left by Graham Bowcock at 29/06/2024 - 15:27
Why no sinking fund? I own a flat in a converted town house with 9 flats and we have a sinking fund to pay for major works .

Part of my service charge is paid into the sinking fund .
Three years ago the building needed repointing, which is a expensive , the cost was 37 grand , but because of the sinking fund we only had to find £1300 each .

While the scaffolding was up we had the roof checked and we're advised it would probably need replacing in ten years , so we have increased the amount we pay into the sinking fund to build it up to pay the majority of the work .

I find a lot people who own flats think a magic fairy takes care of the work and put things off until they become a expensive problem.
I am lucky that we take a pro active approach to the blocks maintenance and have benefited from clear communication with each other and the management company.
I own a few other flats and wish the blocks where as well managed as this one .

Very good point. The other is that service charge due under a lease must be held in a statutory trust fund
Section 42 landlord & tenant act. It is not the freeholder or residents management company money and only used for maintenance costs set out in the lease.

I think that BTL in PRS became non-viable after the Government removed mortgage interest offset against rental income. Expenses due to (major) repairs now represent a proportionately larger reduction in income. It might be worth considering forming a company to enable the interest offset to be restored?

Reply to the comment left by Martin Hicks at 29/06/2024 - 18:13
Very true , I put my property into a Ltd company years ago , made life much simpler.