Unreasonable leaseholder refusing to pay towards ‘Major works’?

Unreasonable leaseholder refusing to pay towards ‘Major works’?

0:01 AM, 28th April 2023, About 2 years ago 27

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Hello – I was hoping someone could help me and stumbled upon this site. We have a share of freehold of a small Victorian house – there are 4 flats and we own 2 – 50% of the freehold.

We have the obligation to repair/redo the house every 7 years – and we’ve passed that but started works – worth around £45k.

We had at our disposal a sinking fund and works had been agreed before the arrival of someone in the raised ground floor flat (that the previous owner sold to someone).

She owns 25% of the freehold.

We will soon go above the sinking fund and will need to ask everyone to pay for around £10k (for all building).

That person is extremely unreasonable and already not paying any side fees (parking permits etc) and refuses to do these extra necessary works and has asked for a Section 20 (even if we are only 3 ppl in the building).

What happens if she objects to the works and a Section 20?

If the majority agrees, can work go on?

And is she obliged to pay?

Thank you,

Deborah


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Glyn Jenkins

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11:20 AM, 29th April 2023, About 2 years ago

Is the £45k job really a £20k job. How many quotes did you get? Has an S20 been issued so the Leaseholders can have a say?

Kizzie

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13:57 PM, 29th April 2023, About 2 years ago

“she was made aware”
….”all solicitors told her so…suggests purchaser was not given in writing legal advice there were major works anticipated in the sale particulars and also suggests no section 20 consultation because it might have been deal breaker.

philip allen

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18:21 PM, 29th April 2023, About 2 years ago

Reply to the comment left by Kizzie at 28/04/2023 - 14:02
Hello Kizzie, you appear to be well versed in these issues. Not wishing to stray off line, are you contactable on a similar issue that we have? Thanks

Joe Barton-Holme

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19:22 PM, 29th April 2023, About 2 years ago

Reply to the comment left by D D at 28/04/2023 - 13:26
The good thing about the S20 process is that all you need to do is observe and pay due consideration to Leaseholder comments. One you've done that she can object until the cows come home. As long as you're not doing anything unreasonable then she must pay what you require or risk a legal claim that she would lose. However, you must follow the S20 process to the letter and a soft agreement, even in writing, between all the former parties is unlikely to hold any weight. The S20 process is not hard and although each phase can take 30 days it puts you on Terra Firma.

Kizzie

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23:02 PM, 29th April 2023, About 2 years ago

Joe Barton Holme
AS I understand the leaseholder owns a share of the freehold interest held in a RTM or RMC which are registered limited companies which must comply with company Articles which give the LH shareholder rights to a vote. So if the major works do not fall within provisions of the lease then it falls to a decision by shareholders (who are also the building owners). It may be the shareholders vote against any proposal to undertake further expenditure or decide to borrow money. It has to be a majority vote. The company is a separate legal entity and directors have a fiduciary to the company not to the leaseholders.

Kizzie

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23:03 PM, 29th April 2023, About 2 years ago

Joe Barton Holme
AS I understand the leaseholder owns a share of the freehold interest held in a RTM or RMC which are registered limited companies which must comply with company Articles which give the LH shareholder rights to a vote. So if the major works do not fall within provisions of the lease then it falls to a decision by shareholders (who are also the building owners). It may be the shareholders vote against any proposal to undertake further expenditure or decide to borrow money. It has to be a majority vote. The company is a separate legal entity and directors have a fiduciary to the company

Joe Barton-Holme

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23:13 PM, 29th April 2023, About 2 years ago

Reply to the comment left by Kizzie at 29/04/2023 - 23:02
Ah, OK. Missed that part! Makes things complicated doesn't it.
This is where Commonhold must be fraught with challenges as well. Trying to get people with equal power all to agree on property repairs and maintenance.
When will people learn that property is an expensive business!

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