Unreasonable leaseholder refusing to pay towards ‘Major works’?

Reply to the comment left by D D at 28/04/2023 - 13:42
It is a statutory regulation by the ‘landlord’ ie who is named in the lease to be paid service charge (held in trust account under Section 42)to consult under section 20.
Is this major work covered under provisions of the lease.? If not then it is not chargeable as service charge under the lease.
It then falls on the freeholders as building owners to foot the repair bill. It is not a bill to be paid by leaseholders who do not own a share in the freehold in an RTM or RMC.

Reply to the comment left by Kizzie at 28/04/2023 - 14:02
It is in the lease. But so being share of freehold I guess she as well would be at fault of not issuing the s20. Because no one holds the freehold it s the co that we set up where we are acting as director who holds the freehold and each owns a part of the co. Basically when it s a share of freehold

Reply to the comment left by D D at 28/04/2023 - 10:20
There is a difference between cash and expenditure. Just because money is held in the bank as a sinking fund does not give the freeholder the right to spend it. If the former leaseholder specifically agreed to the works that are proposed then you might be in a better position.

Whilst you say the neighbour is unreasonable, she is entitled (legally and morally) to have a say in how money is spent. You cannot unilaterally do works and charge her - the risk is that she doesn't pay. She may not have been expecting anything if she's new to the block.

I recently took on the management of a block of four flats but quickly gave it up. The problem is that costs are disproportionate and you're soon at the £250 limit. One or two awkward occupiers make it impossible to get anything done.

I think you need to get an agent to handle a s20, but one issue is that if the agent is going to charge you more than £250 per flat (including VAT) then strictly speaking even that comes under s20.

You need to be very familiar with s20.

Reply to the comment left by D D at 28/04/2023 - 13:26
If these works were agreed before she competed on the purchase she would have been made aware of these works by the seller, LPE1 and TA 6 & 7.

She could argue that the seller hadn't been in possession of s20 notices for these works

Reply to the comment left by D D at 28/04/2023 - 13:42
I'm a conveyancing solicitor , You dont need a section 20 issued for works if the sinking fund will cover the cost.
You will however need to issue a section 20 for the full amount of all of the works if they exceed the sinking fund amount and leaseholder contribution will be needed.

How long ago did they buy their share, and did their conveyancer raise the issue of any intended major works in the next 5 years with the management , if they did and youve incorrectly informed them that there werent any planned works ,then I would seek legal advice immediately. If they end up required to contribute and you knew about these works in advance then thats at best misrepresentation, at worst it could be found to be fraudulent misrep.

It may be that she was not made aware of these major works and she has a claim against the seller.
The FH is held by the management co. so it is the management co. that undertakes S 20 consultation’on behalf of the landlord’ if the part of the building repairs falls under provisions of the lease. If not then an EGM held for the LH as shareholders to vote on how the repairs are to be funded as a separate cost to service charge which is only for the maintenance costs set out in the lease for common parts: corridors access doors etc.

Reply to the comment left by Judith Wordsworth at 29/04/2023 - 01:17
It's possible that Deborah completed the LPE1 for the freeholder, if there's no managing agent, and (inadvertently) did not do so correctly. If she is not aware of s20 and the implications then she probably did not record exactly what is going on.

If the freeholder company is looking to spend money on the property then advice is required on the financial mechanism for doing so.

Reply to the comment left by D D at 28/04/2023 - 10:20
even if you are utilising the sinking fund, a S.20 is required prior to the works commencing. This Leaseholder can demand the costs are capped at £250 now. You may want to refer to FTT. The Leasehold Advisory Service is a great place for advice and free information.

Reply to the comment left by Isabella Ablett at 29/04/2023 - 04:09
The money was agreed way before her purchase and put in an account specifically for these works. She was made aware before the purchase and all solicitors involved told her. But I agree if it goes above that money it seems we need an s20. But what happened if she refuses for additional works that are necessary per the lease - can she be forced into paying if the majority votes for ?

Application to First Tier Property Tribunal and depending on outcome whether there is a breach of lease covenants and by which party to the lease (a legally binding contract) then proceed to Civil court if found in favour of man co as the landlord