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MrPin

Naughty Leasehold

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http://www.bbc.co.uk/news/business-15040273

Flat-owners' complaints about service charges have risen by 46% in two years to 7,600, figures show.

Any flat purchasers here with similar anecdotals? :huh:

Growth

In the early part of this decade, half the homes being developed were flats, as a result of the property boom. That is much higher than the long-term trend.

Oh dear :blink:

Edited by MrPin

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http://www.bbc.co.uk/news/business-15040273

Flat-owners' complaints about service charges have risen by 46% in two years to 7,600, figures show.

Any flat purchasers here with similar anecdotals? :huh:

I was a vendor who happened (by chance ) to be in charge of the freehold of the building I lived in, which I sold to the buyer of my flat and the other two leaseholders in the building at a very reasonable price when I moved out.

Oh.. I think I might be in the wrong thread:(

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I was a vendor who happened (by chance ) to be in charge of the freehold of the building I lived in, which I sold to the buyer of my flat and the other two leaseholders in the building at a very reasonable price when I moved out.

Oh.. I think I might be in the wrong thread:(

No I think that's absolutely the way it should be, that the leaseholders manage and own the freehold, and collectively organise maintenance. :huh:

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No I think that's absolutely the way it should be, that the leaseholders manage and own the freehold, and collectively organise maintenance. :huh:

They (including myself) pretty much did while I was there. I arranged and collected shares of the buildings insurance. When things went wrong I asked how they should be sorted out and then tried to fix them to everyone's satisfaction. I clearly would have been a rubbish slumlord!

:huh:

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I live in a leasehold house. Out of the £11k a year I pay in rent, my landlord has to fork out £2.5K in standard maintenance fees plus extraordinary costs where necessary. The lessor's maintenance company keep the area spotlessly clean and tidy, making it a great place to live if you're renting, but I would never buy here.

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http://www.bbc.co.uk/news/business-15040273

Flat-owners' complaints about service charges have risen by 46% in two years to 7,600, figures show.

They queried the amount they were being asked to pay for maintenance and repairs, the Leasehold Advisory Service for England and Wales said.

In some cases flat-owners have been asked for payments of tens of thousands of pounds by those who manage the blocks they live in.

But an agents' association said actual numbers of complaints remained low.

'Frustration'

Rod Campbell, a former film stuntman from Zimbabwe, lives in a block of flats in Worthing in West Sussex.

He and the other 44 leaseholders have been told to pay £11,000 each to cover recent repairs. This included painting and installing new railings.

"The people here are feeling the heat and they are very frustrated," he said.

"To find that sort of money, in a one-off payment? Pretty much impossible."

The managing agents have justified the charges to residents by telling them in a letter that they are trying to "push for a better future".

What are the implications if you default and can't pay, will the move to force you to sell?

In the current economic climate it's certainly going to cause a lot of people a problem. If someone demanded £11k off me I certainly wouldn't have it and if you save up some money for these bills how occasional are they, I mean if they are going to start asking for £11k every 3-5 years I'd certainly struggle to save it and obviously I'd have to spend less in the economy.

Can those that manage to do the work before seeking the consent of the owners? Plus is there any competitive tendering to do the work or do the landlords just get their mates in to do it?

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In life you want to go from birth to death, carrying the least amount of people on piggyback. You've got to carry the banker, the landlord, the freeholder, insurance people, the government, who, sure may provide an honest service, but also want to profit where they can. If you're unlucky you end up with hungry leeches.

davd-henrie-piggyback-wizards.jpg

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We have share of freehold split between the 3 of us. We pay £50 per month into a sinking fund which covers maintenance, insurance and general repairs year on year. The house is in sound condition but each year we review what may be needed 24 months ahead and adjust accordingly. Last big expenditure was £5k to have the house painted which wemall budgeted for a year in advance.

Its really not that hard to arrange buildings insurance, pay for electric in common areas and file accounts with companies house once a year.

Why we'd need to pay some **** driving around in a mini at least £100 a month to "manage" this plus our sinking fund fee, I don't know.

Sorry, but IMO people who pay management companies are mugs. I appreciate that there is only 3 of us in our building, but same principles apply to blocks of flats.

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We have share of freehold split between the 3 of us. We pay £50 per month into a sinking fund which covers maintenance, insurance and general repairs year on year. The house is in sound condition but each year we review what may be needed 24 months ahead and adjust accordingly. Last big expenditure was £5k to have the house painted which wemall budgeted for a year in advance.

Its really not that hard to arrange buildings insurance, pay for electric in common areas and file accounts with companies house once a year.

Why we'd need to pay some **** driving around in a mini at least £100 a month to "manage" this plus our sinking fund fee, I don't know.

Sorry, but IMO people who pay management companies are mugs. I appreciate that there is only 3 of us in our building, but same principles apply to blocks of flats.

You expose yourself to possible legal issues health and safety doing it yourself. At worse get some residents to become directors you manage the managing agent, review budget.

Say you underinsured your building and it burns down, residents could sue you. Or the caretaker injures himself seriously from you not taking h&s seriously.

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http://www.bbc.co.uk/news/business-15040273

What are the implications if you default and can't pay, will the move to force you to sell?

In the current economic climate it's certainly going to cause a lot of people a problem. If someone demanded £11k off me I certainly wouldn't have it and if you save up some money for these bills how occasional are they, I mean if they are going to start asking for £11k every 3-5 years I'd certainly struggle to save it and obviously I'd have to spend less in the economy.

Can those that manage to do the work before seeking the consent of the owners? Plus is there any competitive tendering to do the work or do the landlords just get their mates in to do it?

http://www.brethertons.co.uk/Content/File/PDF/Property%20Management%20-%20Forfeiture%20of%20the%20Lease.pdf

It may be better to pay your Ground rent on time than worry too much about works, having said that, from my experience i believe that you are supposed to find 3 quotes for any works to be carried out.

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Im so happy I managed to get a house. 70 quid PA, place spotless. Law firm do it.

Flat service charges are a complete and utter rip off. It's like buying a holiday staight from the brochure, or a DFS sofa at full price. The rubbish people spout about the cost of maintenance is unbelievable.

I know for a fact that the slave boxes up here are sold with a service agreement which is out and out fraud. Backhanders to the construction firm, trebles all round etc.

Keep well away.

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We have share of freehold split between the 3 of us. We pay £50 per month into a sinking fund which covers maintenance, insurance and general repairs year on year. The house is in sound condition but each year we review what may be needed 24 months ahead and adjust accordingly. Last big expenditure was £5k to have the house painted which wemall budgeted for a year in advance.

Its really not that hard to arrange buildings insurance, pay for electric in common areas and file accounts with companies house once a year.

Why we'd need to pay some **** driving around in a mini at least £100 a month to "manage" this plus our sinking fund fee, I don't know.

Sorry, but IMO people who pay management companies are mugs. I appreciate that there is only 3 of us in our building, but same principles apply to blocks of flats.

That's far too organised.

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http://www.bbc.co.uk/news/business-15040273

What are the implications if you default and can't pay, will the move to force you to sell?

They don't need to force you to sell. They simply terminate your lease and evict you, leaving you with nothing (except any mortgage debt which is now secured on thin air).

They can then rewrite a new lease and sell the flat on the market themselves, keeping any and all proceeds.

The substantial windfall available to the management/freeholder has led to substantial abuse of this process in the past - e.g. leases were terminated for arrears of as little as £300. Now, the courts require that the arrears are 'severe' and 'prolonged' for this type of action to be taken. However, 24 months or £5k worth of arrears probably would be seen as both by the courts.

In practice, if there is a mortgage on the property, the mortgagee will pay any and all arrears immediately that they become aware of them (because of the risk to their security). They will then add them to the balance of the account, often with substantial administrative charges, and may change the terms and conditions/interest rate on the mortgage account, in view of the mortgagor's breach of the terms&conditions.

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This would go a long way to explaining why the most spectacular property price falls we've seen in recent months have been of flats in large blocks in the north of England, wouldn't it? I seem to remember a thread about one that was sold for over £200k not so long ago that is now on the market for £90k.

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What are the implications if you default and can't pay, will the move to force you to sell?

It's worse than that. They'll have you declared in violation of the terms of your lease, and just terminate it. So you still owe on your mortgage, but your supposed asset disappears.

That is of course an effective weapon to convince your mortgage lender to cough up. Though by the time it reaches them it won't be a mere £11k, it'll be £111k with legal fees.

[edit] Oh, right, chumpus got in first :unsure:

p.s. Apart from checking who owns the freehold[1], the other important thing is to check whether the lease itself exposes you to unlimited liability.

[1] If it's the leaseholders then everyone's interests are at least somewhat aligned. Also if it's a company with a legitimate business (e.g. a builder or even a bank) you should be OK, but if it's the mafia then steer clear!

Edited by porca misèria

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I live in a leasehold house. Out of the £11k a year I pay in rent, my landlord has to fork out £2.5K in standard maintenance fees plus extraordinary costs where necessary. The lessor's maintenance company keep the area spotlessly clean and tidy, making it a great place to live if you're renting, but I would never buy here.

There are many overpriced service charge payers in this land. They charge huge amoonts for maintenance which no house freeholder would ordinarily contemplate on an annual basis. IT IS FAR TOO DIFFICULT TO CHALLENGE THEM. It needs a law reform so that it has to be run as a collective freehold by the leaseholders, with either no profit, or if not desired (by elederly) a system to provided repairs fairly, with tenders being sought. Not just cosy relationships with kickbacks which should be illegal.

After all, it's only about arranging buildings insurance, cleaning common parts, window cleaning, ad hoc repairs and annual lift maintenance etc and possibly a sink fund. Not rocket science!

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We have share of freehold split between the 3 of us. We pay £50 per month into a sinking fund which covers maintenance, insurance and general repairs year on year. The house is in sound condition but each year we review what may be needed 24 months ahead and adjust accordingly. Last big expenditure was £5k to have the house painted which wemall budgeted for a year in advance.

Five grand to paint a house...???

This is either a mansion of epic proportions, you had it painted it in molten gold, or you've been well ripped-off mate....

XYY

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Five grand to paint a house...???

This is either a mansion of epic proportions, you had it painted it in molten gold, or you've been well ripped-off mate....

XYY

Living in London it's pretty hard to find quality and reliable people to do work. I also prefer to have work done safely with scaffolding for good access, rather than by a couple of Eastern Europeans balancing precariously on ladders only to try and sue when they fall off.

Unfortunately a lot of the stonework was in a very bad state and needed to be rebuilt as well as wood properly stripped rather than a lick of B&Q's economy white paint. We also got a 5 year Dulux guarantee.

I don't know your circumstances but I expect you don't fully appreciate what it costs to properly maintain a building.

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You expose yourself to possible legal issues health and safety doing it yourself. At worse get some residents to become directors you manage the managing agent, review budget.

Say you underinsured your building and it burns down, residents could sue you. Or the caretaker injures himself seriously from you not taking h&s seriously.

Yep, I suppose good old 'elf n sayftee is something which you need to think about in a large block of flats! I guess it amazes me that people with small share of freeholder properties still pay to have managing agents. It's really not difficult.

In regards to insurance I would always recommend having a chartered surveyor value the building for reinstatement purposes and ensure your insurance policy is arranged on a day one basis. You'll find that most property damage policies for freeholders will also provide adequate Public Liability cover £2m to £5m - more than enough to cover that knob postman who slips over and sues you!

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Five grand to paint a house...???

This is either a mansion of epic proportions, you had it painted it in molten gold, or you've been well ripped-off mate....

Depends on the job.

If it needed scaffolding that looks middling. If it also needed touching up of brickwork/stonework it looks cheap!

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We have share of freehold split between the 3 of us. We pay £50 per month into a sinking fund which covers maintenance, insurance and general repairs year on year. The house is in sound condition but each year we review what may be needed 24 months ahead and adjust accordingly. Last big expenditure was £5k to have the house painted which wemall budgeted for a year in advance.

Its really not that hard to arrange buildings insurance, pay for electric in common areas and file accounts with companies house once a year.

Why we'd need to pay some **** driving around in a mini at least £100 a month to "manage" this plus our sinking fund fee, I don't know.

Sorry, but IMO people who pay management companies are mugs. I appreciate that there is only 3 of us in our building, but same principles apply to blocks of flats.

Way back in the 90s I did the same thing with the block of 4 flats I lived in. It works well for small blocks where everyone knows each other. I think the problem comes with larger places where people don't see the thing as a whole as theirs. In that case, the management company, whether owned and run by the tenants or a separate freeholder is just another anonymous, maybe profit making, service like a gas or electricity company. I rented a condo (legally speaking much like a leasehold flat with a shared freehold) in Toronto for a while when I first moved here and the building had some serious issues that needed sorting out but the apartment holders had voted against putting up their monthly fee for several years in a row. So, even though the fees charged by the management company they used were very reasonable, there was never going to be enough cash to pay for the big fixes.

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I don't know your circumstances but I expect you don't fully appreciate what it costs to properly maintain a building.

Which is actually the root of the problem. Every smart-ar5e in a block of flats will complain about 5K for maintenance and come out with some crap about how they could do it themselves for 20 quid but then, when it comes to it, they never actually will. As soon as you have to pay someone else to do it, everything becomes way more expensive, especially if you want it done well.

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We have share of freehold split between the 3 of us. We pay £50 per month into a sinking fund which covers maintenance, insurance and general repairs year on year. The house is in sound condition but each year we review what may be needed 24 months ahead and adjust accordingly. Last big expenditure was £5k to have the house painted which wemall budgeted for a year in advance.

Its really not that hard to arrange buildings insurance, pay for electric in common areas and file accounts with companies house once a year.

Why we'd need to pay some **** driving around in a mini at least £100 a month to "manage" this plus our sinking fund fee, I don't know.

Sorry, but IMO people who pay management companies are mugs. I appreciate that there is only 3 of us in our building, but same principles apply to blocks of flats.

Have you ever tried to get more than seven people to agree on something?

It's much like trying to split a restaurant bill with a pedantic half wit arguing over why they shouldn't contribute the same as everyone else because their starter was cold.

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  • 331 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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