Don't suffer in silence
Mary Anne Bowring, creator of www.leaseholdersuppor.co.uk advises leaseholders how to deal with rogue freeholders
The freeholder has a responsibility to the lessees and should comply with his schedule of covenants such as keeping the building insured, carry out necessary repairs to the structure and ensure that communal service are maintained.
However, leaseholders can be at the mercy of the freeholder who can take advantage by charging inflated prices for insurance and requesting unjustified service charges. Due to lack of awareness of their legal rights, leaseholders are often in a state of limbo and continue to pay the service charge and building insurance even though little is being done. If that isn't bad enough, some freeholders simply cannot be traced which makes it impossible to sort out maintenance issues such as communal areas not being cleaned or a leaking roof.
Leaseholders can claim their right to manage to take charge and stop poor management of the block. However, this is only possible if 50% of the leaseholders in the block support a right to manage movement. The same applies to buying the freehold which again could solve the problem of an absent rogue freeholder. Provided 2/3rds of the flats have long leases and 51% of the qualifying leases, participate you can force the freeholder to sell you his title.
Unfortunately for a lot of leaseholders gaining support from the rest of the block is an issue. The recent buy to let trend means many flats are owned by investors who remain nonchalant when it comes to the repair and maintenance of the block or have passed the buck to a letting agent. For example, Ringley's Legal Services Team has just dealt with an absentee freeholder case where only one of the flats in a block was actually occupied by the leaseholder, the rest were rented out. This created a nightmare for the resident leaseholder as she couldn't drum up any support from the other leaseholders about the state of repairs as they didn't live there.
If getting 50% of the block to support the right to self manage or buy the freehold is out of the question don't worry, there is another option. If you are concerned that the block is falling into disrepair and the freeholder isn't managing the block effectively then you can apply to the Leasehold Valuation Tribunal to request they appoint a managing agent of your choice.
Before you apply, you will need to select an agent that has sufficient expertise to satisfy a Tribunal that they are fit to fulfill the role of Court Appointed Manager which is to take over the role of the freeholder and abide by the schedule of covenants set out in the lease.
Requesting a Court Appointed Manager is different to claiming your right to self manage as there is a need to prove the freeholder is at fault. In order to persuade the Tribunal to appoint a manager, it is necessary to justify your reasons why such a course of action is reasonable and would be in the best interests of the block as a whole.
It is possible to present your own case at Tribunal if you have a good understanding of your lease and can find the relevant clauses of which the freeholder is in breach. However, you will need to provide supporting material such as visual evidence of disrepair, works for which you feel you have been overcharged or unauthorized alterations and a record of all unresolved disputes. It is also necessary to produce copies of service charge accounts which do not comply with the Landlord & Tenants Acts.
If you are not confident in presenting your own case then its better to enlist the support of a Managing Agent, typically a firm of Chartered Surveyors who have the necessary experience. To lodge an application with the Leasehold Valuation Tribunal costs between £150 and £350 depending on the number of dwelling in a block. At the Tribunal, each party bears their own costs but if the Tribunal feels that one or both of the parties is wasting their time or not following directions on the information and evidence to be heard it does have the power to award costs of that part of the hearing.
Typically, the Tribunal will schedule a pre-trial review (PTR) at which the parties are instructed what issues or evidence the Tribunal will hear. At the pre-trial review the Tribunal will usually decide whether they wish to visit the block and how much time will be set aside for the hearing.
In cases where the freeholder is present at the Tribunal and objects to your actions, then it is necessary to have your proposed Managing Agent present to demonstrate their expertise and that they are a reasonable and safe choice. If your proposed agent is a member of the Royal Institution of Chartered Surveyors (RICS) and probably also a member of the Association of Residential Managing Agents (ARMA) then you will have greater chances of success.
Provided your evidence has been presented well and the Tribunal is satisfied that the Managing Agent has the required experience and attributes needed to manage the block professionally, the Tribunal will set the appointment of the Managing Agent usually for a term of five years.
Freeholders that fail to keep the block in repair, charge too much for little return and are only interested in ground rent and insurance commission need to watch out as they are not invincible as leaseholders have rights.
The Ringley Group subscribes to the RICS 10 minute FREE consultation service on this topic. So to get the ball rolling feel free to call 0207 267 2900 and ask to speak to Mary-Anne Bowring or Teresa Tuck.
*Application fee relates to the number of dwellings 5 or less flats £150
6-10 dwellings - £250
10+ dwellings - £350
About Mary-Anne Bowring
Mary-Anne Bowring, Founding Director of Ringley Chartered Surveyors is a Member of the Royal Institution of Chartered Surveyors and a Member of the Association of Building Engineers. Since the Housing & Urban Development (Leasehold Reform) Act 1993 Mary-Anne has been advising in this specialist field and has presented cases to the Leasehold Valuation Tribunal (LVT). Mary-Anne has extensive detailed knowledge of building law and the Landlord and Tenant Acts. For the last 10 years Mary-Anne has managed the development of Ringley Chartered Surveyors building an Estates Department which manages 5,000 leasehold properties, a Survey and Valuation Department which has provides valuations to over 10 top banks and about 300 leaseholders/potential freehold enfranchise annually. . Frustrated by the mysticism surrounding property and the absence of simple tailor made solutions Mary-Anne's latest development is the launch of two web based products (www.leaseholdguidance.com and www.leaseholdersupport.co.uk) which are dedicated to supporting lessees through both legal and valuation procedures and providing knowledge, and financial administration for small blocks of flats.
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