Latest case study. Any suggestions for this leasehold issue:
The Leasehold Knowledge Partnership has been contacted by the owners of 12 flats in a block of 24 in an unfashionable town in Northamptonshire. The flats have fallen in value to around £60,000.
They are in a converted bakery in an area of the town with anti-social issues and most of the owners are investors … or the bank, as five have been re-possessed.
A London-based freeholder/managing agent scooped up the freehold at auction in March 2012.
He served a section 20 for general refurbishment in March this year. The consultation ends on October 20.
Two weeks ago the leasehold owners got their first indication of costs for the project: £950,000.
This has set off a chorus of squawks and calls to LKP.
There was a meeting earlier this week, but the freeholder did not bring along his costings. He forgot.
One leasehold owner, who owns two flats, has been appointed caretaker by the freeholder on £450 a month (presumably paid for by his neighbours).
The leasehold owners are desperately looking at buying the freehold, right to manage etc.
The council only signed this building off five years ago. (The original developer is, inevitably, bankrupt.)
What can the leasehold owners do?
Related posts:
Why are leasehold house owners mobilising while flat owners suffer in silence?
Our freeholder calls us leasehold owners “a bunch of animals”
Taylor Wimpey gets round ‘right of first refusal’ to buy freehold by selling the block BEFORE more than half flats are sold
Ground rent groups concede leasehold house owners have a right to buy freehold
Observer newspaper features Leasehold Knowledge Partnership – and warns of problems with joint freehold owners
Just how much can a freeholder charge in a leasehold flat sale?
I wrote a comment. I am not sure if was received.
Longer or interrupted posting can time out unpredictably. Try composing in word and pasting.
Offering no liability whatsoever to anyone reading and acting on this post “my first thoughts”. There are 3 first steps
1 There should have been two notices “Notice of Intention” and then “Notice of Estimates”( my terms) otherwise the consultation will likely be invalidated at the FTT. Let’s assume it is valid and at Notice of Estimate stage and, as detailed in the notice of estimates, insist on inspecting the specification and estimates quotes or tenders. LEASE have a guide on this. If it is the first notice then you are still at a negotiation stage.
2 Form a residents association now to form a single voice and as a platform for organising enfranchisement or right to manage. Forms are available via LEASE and register it with the FTT, not the landlord.
3 Employ a local chartered building surveyor experienced in management to inspect and report on the work and likely costs, as well as timing, as some could be deferred. This will help with discussion mediation with the freeholderor referral to the FTT or even litigation, as your expert witness, as below. LEASE and the RICS websites will help with names. Under Daejan your costs can be included in any settlement with the freeholder.
Do check as while the builder might be bust, are they the person who sold (granted)the leases? Even household name developers skate on liability by blaming a sub or main contractor who is out of business, when the liability is actually theirs.
Look at your building guarantees from the NHBC Zurich etc to see if some work is covered.
Defective premises are often thought not to be the lessees service charge liability ( ie not our fault) but that is not supported in precedent ( case law). Issues which could and should have been maintained in the interim might be reduced in cost and scope and reduce your share of the cost under the principles in Continental vs White etc.
If you press ahead with the freehold purchase then use the 87 Act not the 94 Act as these issues will trigger the right to acquire at a lower figure.
One rule of thumb – its easy to rush to take over, but then you, as freeholder or RTM, will have the problem and the full cost of the works and litigation. Not all leaseholders might support you and litigate against you! Give thought to the strategy of forcing a landlord to carry out the works and seeking to limit your bill to a fair and reasonable contribution when considering your options, as, after all, he has to recover his costs….
Not all freeholders or agents or surveyors are evil, honest, sometimes we rush and forget things too. Fact is while there is money to be made not all are exploitative and are quite fair, understanding that a solid relationship is better than a fight, Start out with “trust but verify” and be ready, just in case. Oh and if its me always serve cake at meetings- I’ll agree to anything.
If that were me I would let them buy me out, It isn’t worth the hassle…..
How are they getting on?