How long can you increase service charges for without maintaining the property?

How long can you increase service charges for without maintaining the property?

0:01 AM, 22nd February 2024, About 9 months ago 7

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Hello, I am paying very high service charges for my flat (3 times the average in London), recently this has risen again with the appointment of a new managing agent and a change in freeholder.

The new freeholder is also the majority share leaseholder who forced the sale of the freehold, ignoring our request to purchase our share at the same time.

Parts of the building need work and the garden is neglected and I am happy to pay to see improvements, but they are just sitting on the money, despite using this same argument to force the sale of the freehold.

Neither the freeholder or the managing agent will provide accounts showing what has happened to the money we have paid under the previous freeholder or previous managing agent – presumably, this information was supplied to the freeholder with the sale of the freehold.

The freeholder is an aggressive speculator, so I am worried that they are doing everything to undermine the value of our property or to make it impossible to sell, to anyone but them in the future.

What are my rights, and what can I do to protect my investment?

Thanks,

JM


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Kizzie

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8:12 AM, 22nd February 2024, About 9 months ago

Hello JM
First - you purchased a lease to your flat, the right to live there setting out T&Cs or covenants, a legally binding contract.
What does your lease say about service charge? To whom does it say you pay it? Is it a lessor aka landlord or a management company and what does it actually say about providing you with annual accounts and summaries of costs and certification by management agents or auditors?
And then come back

Tim Peters

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8:22 AM, 22nd February 2024, About 9 months ago

OK... Point 1, they must by law provide a full set of accounts within 6 months of the year end.

Point 2 if you are not happy with some of the expense items, you have a legal right to inspect every invoice and bill

Point 3 if you remain unhappy, pay your £100 and make a section 27 application to the first tier property tribunal for a judgment of the reasonableness and liability to pay service charge.

If the FtT finds it unreasonable, you won't have to pay it

Its a simple form, you don't need a lawyer and you can't be made to pay the freeholders legal costs even if you lose

Just asking for the accounts may be enough 🙄

Kizzie

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10:09 AM, 22nd February 2024, About 9 months ago

Reply to the comment left by Tim Peters at 22/02/2024 - 08:22
In response to Tim Peters
it depends what the lease says. What the OP suggested it may be that service charge in the lease is payable to the party named in the lease which does not now exist.
If that’s the case then service charge can no longer be paid.
I would not go up against a party in the FTT who has access to fund expensive legal representation.
Leasehold law is complex. Better to first get support from other leaseholders and seek legal advice from properly qualified solicitors,
and read the lease

Paul McCarthy

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10:13 AM, 22nd February 2024, About 9 months ago

Reply to the comment left by Tim Peters at 22/02/2024 - 08:22
EXCELLENT reply!

Paul McCarthy

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10:16 AM, 22nd February 2024, About 9 months ago

Reply to the comment left by Kizzie at 22/02/2024 - 10:09Do not agree. I went up against a freeholder 3 times and won all 3 and managed and presented. the case myself. I sought advice from the Leaseholder Advisory Service, and it was invaluable. Book a call with them, get advice and crack on!

Richard Ellis

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11:28 AM, 22nd February 2024, About 9 months ago

Reply to the comment left by Kizzie at 22/02/2024 - 10:09
This answer highlights everything that is wrong with the leasehold system.

So just because a bully freeholder has lots of money for powerful lawyers, leaseholders should just suck it up?

Really?

Kizzie

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14:03 PM, 22nd February 2024, About 9 months ago

I didn’t imply you have to accept the situation but depending on the complexity there is not equal justice if one side has an expensive barrister and the other side is/are LIPs.
The unfairness is that when a lease to a flat is considered for purchase, conveyancers do not do the due diligence on the lease and give advice to clients on what the lease means and the implied tenant legal rights contained within.
From the original post it is not simple matter where it looks as if leaseholders not given first refusal

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