Remove ads

Introducing the LemonFools Personal Finance Calculators

Lessors obligations

including wills and probate
Dendyver
Posts: 11
Joined: November 29th, 2016, 6:12 pm
Been thanked: 2 times

Lessors obligations

#138475

Postby Dendyver » May 12th, 2018, 7:56 am

My 1st floor flat is in a 1970’s purpose built block of flats, and according to the lease “the Lessors will maintain repair redecorate and renew (i) the main structure and the exterior of the building.” In January this year I reported to the Lessors that following wet and windy weather damp patches had appeared internally at ceiling height on my South facing external cavity wall.

Builders have identified a gap in the external brickwork at the 2nd floor level (above mine), which may have caused the water ingress into the building resulting in my dampness, but that really the complete brick wall should be re-pointed.

To date no remedial work has been carried out by the Lessors, as they state they have no money to carry out the work required. Obviously this is not an acceptable situation for me.

Is it any concern of mine as to whether the Lessors have the funds to meet their Lease obligations? If true there is no money, is not the Section 20 procedure a mechanism the Lessors can use to raise funds?

johnhemming
Lemon Quarter
Posts: 1337
Joined: November 8th, 2016, 7:13 pm
Has thanked: 3 times
Been thanked: 134 times

Re: Lessors obligations

#138481

Postby johnhemming » May 12th, 2018, 8:18 am

Where I have a lease for a flat the lessors do the work on the property but charge it as a service charge to the lessees.

mc2fool
Lemon Slice
Posts: 998
Joined: November 4th, 2016, 11:24 am
Has thanked: 4 times
Been thanked: 176 times

Re: Lessors obligations

#138521

Postby mc2fool » May 12th, 2018, 12:53 pm

As JH says, you will almost certainly also find a clause in the lease that says that the Lessor charges all such costs to the Lessees in the form of a service charge. However, for something of that sort their undertaking section 20 consultations will almost certainly be required.

Section 20 isn't a mechanism for the Lessor to raise funds, per se, but actually is primarily to stop Lessors charging Lessees for expensive works without their fore knowledge. It also serves to guarantee that the Lessor can get back the costs of works. Basically, if the cost of the work is going to be more than £250 per flat then they have to undertake the section 20 consultation or all they can charge each flat holder for the works is £250. Read all about it at https://www.lease-advice.org/advice-gui ... es-agents/

The other thing you want to look for in your lease is the terms of paying service charges. What's fairly common (I gather, and from personal experience) is that at the end of the financial year the lessor issues a certificate detailing the service chargeable costs over the previous year along with a statement of account for each leaseholder, and also issues a budget for the following year -- the whole of which may be payable up front, but with the lease also allowing "interim" payments (e.g. monthly service charges).

Dendyver
Posts: 11
Joined: November 29th, 2016, 6:12 pm
Been thanked: 2 times

Re: Lessors obligations

#138534

Postby Dendyver » May 12th, 2018, 2:08 pm

Thank you for your helpful replies - so for the Lessors to say they have no money is not an excuse for them not to full-fill their Lease obligations?

How to prod the Lessors into action though?

pochisoldi
Lemon Slice
Posts: 301
Joined: November 4th, 2016, 11:33 am
Has thanked: 5 times
Been thanked: 145 times

Re: Lessors obligations

#138541

Postby pochisoldi » May 12th, 2018, 2:58 pm

Dendyver wrote:Thank you for your helpful replies - so for the Lessors to say they have no money is not an excuse for them not to full-fill their Lease obligations?

How to prod the Lessors into action though?


My advice is to speak to someone at lease-advice.org - make a phone call.

In the meantime, obligations on lessors and lessees are defined in the lease itself.

The usual situation is that the freeholder is responsible for maintaining the property, and is able to recharge those costs to leaseholders.
The method of recharge may vary, and is usually constrained by "what the lease says/permits".
In my personal experience maintenance costs are funded from a service charge made every 6 months which is paid into the service charge fund which then pays for things. Another way (usually for smaller divided properties) is to pay for things as and when they need doing.

The service charge approach means that any planned work costing any single leaseholder more than £250 requires a section 20 consultation.
Where all the leaseholders agree on a course of action, a S20 consulation is not required (more easily achieved with a handful of leaseholders).

One option you do have (which would need to be in concert with other leaseholders) is to investigate "buying the freehold" or exercising "right to manage" (aka RTM). RTM is easier to achieve (lower hurdles to overcome) compared to buying the freehold - again lease-advice.org is your friend.

One more thing. If I were in your shoes, I'd be checking to ensure that the freeholder has taken out buildings insurance as specified in the lease...

PochiSoldi

mc2fool
Lemon Slice
Posts: 998
Joined: November 4th, 2016, 11:24 am
Has thanked: 4 times
Been thanked: 176 times

Re: Lessors obligations

#138545

Postby mc2fool » May 12th, 2018, 3:17 pm

Dendyver wrote:Thank you for your helpful replies - so for the Lessors to say they have no money is not an excuse for them not to full-fill their Lease obligations?

How to prod the Lessors into action though?

No, the lease is (presumably) clear on their obligation to maintain the structure and exterior of the building. It is, potentially, an excuse for not having done it immediately, but it's not an excuse for not having at the very least started the process -- although you do say that builders have identified a gap in the brickwork, so does that mean they've had builders in to look at the problem?

One thing you don't mention is a sense of scale, either of the size of the gap or the size of the block (i.e. number of flats). For fixing the immediate problem, if it's a small gap that's not going to be very costly to patch up, you should certainly give them grief for not having enough of a float to cover relatively minor maintenance issues.

If it's a more major job (inc. maybe re-pointing the whole wall) that'll go over £250 per flat then delays add to the problem. For a start section 20 requires two 30 day consultations (see previous link) and then there's the matter of when they can require the leaseholders to stump up the money to do the job -- that could be not for another 11 months, so read those parts of your lease carefully.

I think you should certainly send the lessors a stiff letter pointing out their obligations under the lease and asking them to reply explaining how (and when) they are going to proceed towards fulfilling them.

Depending the number of and your relationships with the other flat owners, you might also want to talk to them about the problem, firstly to see if anyone else is suffering and secondly to see how they might feel about stumping up sooner rather than later. After all, if you can turn round to the lessors and tell them that money isn't a problem that'd remove that excuse ;)

As an aside, if your lessor is an ass you may want to read up on, consider and discuss with the other lessees Collective Enfranchisement, which is the right of the lessees to collectively buy the freehold from the lessor (forcibly) and/or the Right to Manage, which is the right of the lessees to (forcibly) take over the responsibility for the management of the building from the lessor, which you can then either do yourselves or appoint someone else to do, as per your choice.

Dendyver
Posts: 11
Joined: November 29th, 2016, 6:12 pm
Been thanked: 2 times

Re: Lessors obligations

#139210

Postby Dendyver » May 15th, 2018, 4:09 pm

Thanks for the replies to date.

The building contains 15 flats, and there is a system of a six monthly service charge out of which all costs are paid. There does not seem to be a provision for raising funds to cover a large capital expenditure – the bizarre custom is to only fund from current expenditure.

I have found one other flat holder who suffers from water ingress into the building, resulting in damp patches on his south facing internal wall of the cavity wall. His is also a 1st floor flat, but he has been “waiting his turn” for remedial work for 4 years. Unfortunately his south facing wall is not the same as my south facing wall so I cannot piggy back to have my problem sorted with his. The other 13 flat holders are not interested in voluntarily paying in extra to pay for work that does not affect them, and I do not want to wait 4+ years.

The Lessors have a Lease obligation to maintain, repair and renew the main structure and the exterior of the building, and of course to permit water ingress for years is I think a dereliction of duty of care to the affected resident but also is bad for the fabric of the building. Is there a mechanism to prod the Lessor into fulfilling his contractural obligation even if that means raising extra funds?

There is the separate matter that neither the Lessor nor the Managing Agent notified my solicitor when I bought the flat last year of any damp problems. I also asked two residents during the buying process if there were any problems with the building and neither mentioned another resident has an ongoing problem with dampness, and one of the two was a director of the Lessor for 3 of the 4 years in question.

If anyone can advise further?

modellingman
2 Lemon pips
Posts: 182
Joined: November 4th, 2016, 3:46 pm
Has thanked: 30 times
Been thanked: 59 times

Re: Lessors obligations

#139229

Postby modellingman » May 15th, 2018, 6:20 pm

Dendyver wrote:The Lessors have a Lease obligation to maintain, repair and renew the main structure and the exterior of the building, and of course to permit water ingress for years is I think a dereliction of duty of care to the affected resident but also is bad for the fabric of the building. Is there a mechanism to prod the Lessor into fulfilling his contractural obligation even if that means raising extra funds?


I think mc2fool has already indicated the next obvious step

mc2fool wrote:I think you should certainly send the lessors a stiff letter pointing out their obligations under the lease and asking them to reply explaining how (and when) they are going to proceed towards fulfilling them.


Identify the specific parts of the lease where they are failing to meet their obligations. You could also follow PochiSoldi's advice

PochiSoldi wrote:My advice is to speak to someone at lease-advice.org - make a phone call.


I have found LEASE quite a helpful source in the past. One of their FAQs appears to deal with your situation:

https://www.lease-advice.org/faq/what-c ... the-lease/

What can I do if my landlord breaches their obligations in the lease?

A lease is a contract and so if your landlord breaches the terms of the lease you can take legal action against them through the County Court. Where relevant you can seek an injunction, order for specific performance and/or damages. You can also seek to recover your costs.

If the breach relates to unsatisfactory management or unreasonable service charges you could apply to the First-tier Tribunal (Property Chamber) for a manager to be appointed.


So you have legal remedies available to you and you may want to get a solicitor involved - either to write your stiff letter for you or to follow up if you do not get a satisfactory (or any) reply to your own letter.

Dendyver wrote:There is the separate matter that neither the Lessor nor the Managing Agent notified my solicitor when I bought the flat last year of any damp problems. I also asked two residents during the buying process if there were any problems with the building and neither mentioned another resident has an ongoing problem with dampness, and one of the two was a director of the Lessor for 3 of the 4 years in question.


IANAL but in property transactions it is generally a case of caveat emptor and that is why the prospective buyer (through his solicitor/conveyancer) sends written enquiries to the seller. If you still have your paperwork from the purchase then go through that - your solicitor should have provided you with a list of the enquiries made and the seller's response. You may have a case against the seller if he did not provide honest answers to the enquiries - though proving they were not honest might be quite difficult. Similarly, I suspect you would only stand any chance of having a case against the director if you could prove he had mislead you. If it boils down to your word against his/hers, then I wouldn't rate your chances highly.

In any event, though, you have a much more clear cut case against the lessor, so in your shoes that is the one I would pursue.

johnhemming
Lemon Quarter
Posts: 1337
Joined: November 8th, 2016, 7:13 pm
Has thanked: 3 times
Been thanked: 134 times

Re: Lessors obligations

#139231

Postby johnhemming » May 15th, 2018, 6:31 pm

If the lessor is a company which has the leaseholders as its shareholders then you can use the democratic process of company law to engage with the issue. It would be helpful to understand the relationship between the leaseholders and the lessor.

It would not surprise me if your co-leaseholders were quite pleased by not facing large bills for service charge and that could be behind the difficulties you face. If that is what is happening then really you need to talk to quite a few of them and find out if they would agree either an increase in the service charge or a one-off improvement scheme.

mc2fool
Lemon Slice
Posts: 998
Joined: November 4th, 2016, 11:24 am
Has thanked: 4 times
Been thanked: 176 times

Re: Lessors obligations

#139395

Postby mc2fool » May 16th, 2018, 4:28 pm

Dendyver wrote:The building contains 15 flats, and there is a system of a six monthly service charge out of which all costs are paid. There does not seem to be a provision for raising funds to cover a large capital expenditure – the bizarre custom is to only fund from current expenditure.

Are you talking about what has and is happening, or what the lease says?

Dendyver
Posts: 11
Joined: November 29th, 2016, 6:12 pm
Been thanked: 2 times

Re: Lessors obligations

#139792

Postby Dendyver » May 18th, 2018, 11:00 am

Hello mc2fool

Dendyver wrote:
The building contains 15 flats, and there is a system of a six monthly service charge out of which all costs are paid. There does not seem to be a provision for raising funds to cover a large capital expenditure – the bizarre custom is to only fund from current expenditure.

mc2fool wrote
Are you talking about what has and is happening, or what the lease says?

Dendyver writes
I am talking about what has and is happening. The lease does not refer to capital and current expenditure, or how funds would be raised to cover an unexpected capital outlay. The lease on my last flat for example was the same, but the Lessors there used the Section 20 procedure to raise additional funds to cover large capital outlays.

mc2fool
Lemon Slice
Posts: 998
Joined: November 4th, 2016, 11:24 am
Has thanked: 4 times
Been thanked: 176 times

Re: Lessors obligations

#139828

Postby mc2fool » May 18th, 2018, 1:37 pm

Dendyver wrote:I am talking about what has and is happening. The lease does not refer to capital and current expenditure, or how funds would be raised to cover an unexpected capital outlay. The lease on my last flat for example was the same, but the Lessors there used the Section 20 procedure to raise additional funds to cover large capital outlays.

Dendyver, it'd be good if you used the Reply with quote button -- the one with a pair of quotation marks in it, between the exclamation mark and thumbs up buttons at the top right of a post. That'll (a) automatically quote the post you are replying to, so obviating the need for your "xxx wrote" cut'n'pasting, (b) do it in the standard format that helps readers quickly and easily see who and what is being quoted, and (c) notifies the person being quoted, so they know someone is replying to them without having to discover it by chance.

Now, on what you say: you should ignore what has and is happening and refer to what the lease says. On section 20, as I've already explained, the section 20 procedure is not to raise additional funds but to give leaseholders a say over larger expenditures to be paid for from service charges to the lessees -- and it only applies to such service chargeable expenditures for which there is already a provision in the lease.

If the lease obliges the lessors to maintain & repair etc the building (as I'm sure it does) but doesn't say that the cost of that can be charged to the lessees, then you could force the lessors to do it out of their own pocket -- and I seriously doubt that's the case.

If it does say that can be charged to the lessees but doesn't give any mechanism for presenting/invoicing/budgetting service charges (which I also doubt) then the lessors can simply demand everyone coughs up at will (once the s.20s are completed).

Maybe you could scan in your lease and (suitably anonymised) post it somewhere and ask the more legal beagles here who are used to deciphering incredibly long punctuation free legalese sentences to glance an eye over it and tell you what it actually says.

Clitheroekid
Lemon Quarter
Posts: 1358
Joined: November 6th, 2016, 9:58 pm
Has thanked: 481 times
Been thanked: 980 times

Re: Lessors obligations

#140456

Postby Clitheroekid » May 22nd, 2018, 1:38 am

As always, in leasehold situations the starting point is the wording of the lease.

In this case you're fortunate, as there is a very clear and specific covenant on the part of the landlord to carry out exterior repairs.

A lease is a binding contract between the current landlord and the current tenant. If one side fails to carry out the obligations imposed by the lease they are in `breach of covenant', and legal action can be taken to enforce the obligation.

When, as here, the landlord breaks their covenant to repair the property the tenant has a number of potential options available through the court.

The first option is to seek ‘specific performance'. This is an order requiring the landlord to do what they are contractually obliged to do - in this case to carry out repairs.

Secondly, the tenant can seek damages (an award of financial compensation). The court will award damages where the tenant has sustained loss, for example the cost of carrying out repairs that were the landlord's responsibility, or the loss of the ability to occupy property (where the lack of repair is so serious as to make the property uninhabitable). In the latter case damages will be awarded on an ongoing basis until the repairs have been completed.

A third – and little known - remedy is the ability of the court to appoint a receiver - usually an independent building surveyor - who is given the power to ensure that the landlord's repair obligations are carried out.

So as the tenant you have plenty of ammunition. Of course, issuing court proceedings should be a last resort, but often the threat of them will achieve the objective.

Although I couldn't be certain without seeing the lease it sounds as though it's a fairly conventional arrangement, whereby the landlord is entitled to reimburse themselves the cost of repairs through the service charge.

However, the fact that most of the other residents don't want the work doing is completely irrelevant. The whole point of a service charge is to spread the cost of essential repairs to the building as a whole across all the flat owners. The landlord's attitude should be entirely neutral, as they will not be out of pocket as a result of carrying out their obligations.

If I were you I would therefore write to the landlord saying you've now obtained legal advice, and that if they fail to implement a repair programme forthwith you will have no option other than to instruct solicitors to seek an order for specific performance and damages. It’s always sensible to impose a deadline for a response – 14 days should be adequate. You can also say that you will claim recovery of your legal costs as well, and emphasise that the landlords will not be able to reimburse themselves for these through the service charge.

Hopefully, such a letter / email will finally stir them into taking some action.

Dendyver
Posts: 11
Joined: November 29th, 2016, 6:12 pm
Been thanked: 2 times

Re: Lessors obligations

#142137

Postby Dendyver » May 29th, 2018, 5:59 pm

Hello

Just a note of thanks to Clitheroekid and other contributors - the Lessors have now agreed to carry out the works required and the Statutory 20 Section Notice has been sent out.

dendyver


Return to “Legal Issues (Practical)”

Who is online

Users browsing this forum: No registered users and 4 guests