I hold a long lease on a flat in N London. The leaseholders bought the
freehold last year and took over management. There are around 100 flats in
the block. There is a lot of urgent work to be done, possibly costing
£7,500. A meeting of leaseholders was held, and it was agreed to raise only
£750, and only about two-thirds of leaseholders have actually paid up. In
the meantime, the block is dilapidating further.

What options do the management company have to raise the money for at least
the most urgent works? The £750 was never going to be nearly enough, and
it's such a small sum that chasing up payment is not cost-effective. This is
not a great time to go looking for money from people, but it's expenditure
that has been put off for years.

I have a nasty feeling that the directors of the management company are
acting negligently.

GB wrote:
I hold a long lease on a flat in N London. The leaseholders bought the
freehold last year and took over management. There are around 100
flats in the block. There is a lot of urgent work to be done,
possibly costing £7,500. A meeting of leaseholders was held, and it
was agreed to raise only £750, and only about two-thirds of
leaseholders have actually paid up. In the meantime, the block is
dilapidating further.

What options do the management company have to raise the money for at
least the most urgent works? The £750 was never going to be nearly
enough, and it's such a small sum that chasing up payment is not
cost-effective. This is not a great time to go looking for money from
people, but it's expenditure that has been put off for years.

I have a nasty feeling that the directors of the management company
are acting negligently.

I should have said that those figures are per flat.

Fri, 26 Sep 2008 17:35:08
uk.legal.moderated GB

GB wrote:
I hold a long lease on a flat in N London. The leaseholders bought the
freehold last year and took over management. There are around 100
flats in the block. There is a lot of urgent work to be done,
possibly costing £7,500. A meeting of leaseholders was held, and it
was agreed to raise only £750, and only about two-thirds of
leaseholders have actually paid up. In the meantime, the block is
dilapidating further.

What options do the management company have to raise the money for at
least the most urgent works? The £750 was never going to be nearly
enough, and it's such a small sum that chasing up payment is not
cost-effective. This is not a great time to go looking for money from
people, but it's expenditure that has been put off for years.

I have a nasty feeling that the directors of the management company
are acting negligently.

I should have said that those figures are per flat.

So c. GBP750K is needed and you have around GBP50K (6.7%) so far?

Are the directors also lease holders or has the management company
appointed external directors? Are they paid to be directors and if so
is it a nominal amount or market rate?

What is the nature of the most urgent works? Are they (for example)
"our kitchens units are falling apart" or "the sewage system fails on a
regular basis"? Are all the leaseholders affected equally or some more
than others. A sense of scale and proportion might help, maybe the
people that haven't paid up and didn't vote for a larger fund aren't
affected. Is the block a mixed one in terms of the value of the flats
or are they all of more or less the same value?

These are general questions that if answered may lead to a better
answer.

--
Wm...
Reply-To: address valid for at least 7 days

Wm... wrote:
Fri, 26 Sep 2008 17:35:08
uk.legal.moderated GB

GB wrote:
I hold a long lease on a flat in N London. The leaseholders bought
the freehold last year and took over management. There are around
100 flats in the block. There is a lot of urgent work to be done,
possibly costing £7,500. A meeting of leaseholders was held, and it
was agreed to raise only £750, and only about two-thirds of
leaseholders have actually paid up. In the meantime, the block is
dilapidating further.

What options do the management company have to raise the money for
at least the most urgent works? The £750 was never going to be
nearly enough, and it's such a small sum that chasing up payment is
not cost-effective. This is not a great time to go looking for
money from people, but it's expenditure that has been put off for
years. I have a nasty feeling that the directors of the management
company
are acting negligently.

I should have said that those figures are per flat.

So c. GBP750K is needed and you have around GBP50K (6.7%) so far?

Are the directors also lease holders or has the management company
appointed external directors? Are they paid to be directors and if so
is it a nominal amount or market rate?

They are all leaseholders, and unpaid.


What is the nature of the most urgent works? Are they (for example)
"our kitchens units are falling apart" or "the sewage system fails on
a regular basis"? Are all the leaseholders affected equally or some
more than others. A sense of scale and proportion might help, maybe
the people that haven't paid up and didn't vote for a larger fund
aren't affected. Is the block a mixed one in terms of the value of
the flats or are they all of more or less the same value?

The roof is leaking. Ancient pipework in the building leaks. There are
boilers that supply hot water to the flats. These break down, and they need
replacing. The flats are all the same AFAIK. Clearly, those just under the
roof have the greatest interest in that being done.

I am thinking of fitting a combi boiler to be self-sufficient for hot water.


These are general questions that if answered may lead to a better
answer.

Thanks for any help.



--
Wm...
Reply-To: address valid for at least 7 days

GB ] said:
Wm... wrote:
Fri, 26 Sep 2008 17:35:08
uk.legal.moderated GB

GB wrote:
I hold a long lease on a flat in N London. The leaseholders bought
the freehold last year and took over management. There are around
100 flats in the block. There is a lot of urgent work to be done,
possibly costing £7,500. A meeting of leaseholders was held, and it
was agreed to raise only £750, and only about two-thirds of
leaseholders have actually paid up. In the meantime, the block is
dilapidating further.

What options do the management company have to raise the money for
at least the most urgent works? The £750 was never going to be
nearly enough, and it's such a small sum that chasing up payment is
not cost-effective. This is not a great time to go looking for
money from people, but it's expenditure that has been put off for
years. I have a nasty feeling that the directors of the management
company
are acting negligently.

I should have said that those figures are per flat.

So c. GBP750K is needed and you have around GBP50K (6.7%) so far?

Are the directors also lease holders or has the management company
appointed external directors? Are they paid to be directors and if so
is it a nominal amount or market rate?

They are all leaseholders, and unpaid.


What is the nature of the most urgent works? Are they (for example)
"our kitchens units are falling apart" or "the sewage system fails on
a regular basis"? Are all the leaseholders affected equally or some
more than others. A sense of scale and proportion might help, maybe
the people that haven't paid up and didn't vote for a larger fund
aren't affected. Is the block a mixed one in terms of the value of
the flats or are they all of more or less the same value?

The roof is leaking. Ancient pipework in the building leaks. There are
boilers that supply hot water to the flats. These break down, and they need
replacing.

We had that where I used to live and decided to remove them - expensive
but the right decision!

The flats are all the same AFAIK. Clearly, those just under the
roof have the greatest interest in that being done.

I am thinking of fitting a combi boiler to be self-sufficient for hot water.


These are general questions that if answered may lead to a better
answer.

Thanks for any help.

On 26 Sep, 14:20, "GB" wrote:
I hold a long lease on a flat in N London. The leaseholders bought the
freehold last year and took over management. There are around 100 flats in
the block. There is a lot of urgent work to be done, possibly costing
£7,500. A meeting of leaseholders was held, and it was agreed to raise only
£750, and only about two-thirds of leaseholders have actually paid up. In
the meantime, the block is dilapidating further.

What options do the management company have to raise the money for at least
the most urgent works? The £750 was never going to be nearly enough, and
it's such a small sum that chasing up payment is not cost-effective. This is
not a great time to go looking for money from people, but it's expenditure
that has been put off for years.

I have a nasty feeling that the directors of the management company are
acting negligently.

Erk. Sounds awful. The phrase "can of worms" doesn't even do justice
to this kind of thing. Unfortunately there's going to be little option
but "chasing up payment" one way or another (ultimately by legal
action which is not the easiest in the world). The sorts of thoughts
that come to mind are

(i) what do the leases say (they should permit the landlord to recover
costs from the tenants, they may not permit demanding advance payments
but they should), if the leases are rubbish you may need to get them
fixed - part IV of the landlord and tenant act 1987 may help.

(ii) have the sums paid been demanded properly (proper notices, s.20
consultation if necessary) and so on? If not, you are buggered if you
want to recover the sums and may need to get things done right, there
are possible disasters here too.

You might find it cost effective to pay someone who knows how to
manage property to do it for you (pluses and minuses) we do in our
block. You might want to take legal advice too (or encourage the
management company to do so).

At the risk of being a little self-serving (not a little), there's a
fairly decent LAG book that might be some help:

http://www.lag.org.uk/Templates/Syst...3&Mode=display

8-).

Francis

wrote:


Erk. Sounds awful. The phrase "can of worms" doesn't even do justice
to this kind of thing. Unfortunately there's going to be little option
but "chasing up payment" one way or another (ultimately by legal
action which is not the easiest in the world). The sorts of thoughts
that come to mind are

(i) what do the leases say (they should permit the landlord to recover
costs from the tenants, they may not permit demanding advance payments
but they should), if the leases are rubbish you may need to get them
fixed - part IV of the landlord and tenant act 1987 may help.

(ii) have the sums paid been demanded properly (proper notices, s.20
consultation if necessary) and so on? If not, you are buggered if you
want to recover the sums and may need to get things done right, there
are possible disasters here too.

You might find it cost effective to pay someone who knows how to
manage property to do it for you (pluses and minuses) we do in our
block. You might want to take legal advice too (or encourage the
management company to do so).

I haven't been through the leases, but I think they are pretty standard. We
have a professional firm of property managers, AFAIK all the correct notices
were issued, and I remember seeing a S20 notice a while back. The problem is
one of democracy in inaction, as virtually all the leaseholders have a share
in the freehold. With due respect to your book, Francis, I don't think
anybody wants to have a dispute. All the leaseholders agreed that work needs
to be done, but they can't agree on a sensible funding level to get it done,
as most leaseholders don't want to dip their hands in their pockets.

What I was wondering about was whether anyone had any practical examples of
what has been done in these circumstances? Are there means for the freehold
company to raise extra funds, perhaps through a loan or even selling the
freehold to someone else?

To help chase up payment, can the freeholders inform the mortgagees of
defaulting leaseholders? Would the mortgages be at all interested?








At the risk of being a little self-serving (not a little), there's a
fairly decent LAG book that might be some help:

http://www.lag.org.uk/Templates/Syst...3&Mode=display

8-).

Francis

"GB" wrote in message
...
wrote:


Erk. Sounds awful. The phrase "can of worms" doesn't even do justice
to this kind of thing. Unfortunately there's going to be little option
but "chasing up payment" one way or another (ultimately by legal
action which is not the easiest in the world). The sorts of thoughts
that come to mind are

(i) what do the leases say (they should permit the landlord to recover
costs from the tenants, they may not permit demanding advance payments
but they should), if the leases are rubbish you may need to get them
fixed - part IV of the landlord and tenant act 1987 may help.

(ii) have the sums paid been demanded properly (proper notices, s.20
consultation if necessary) and so on? If not, you are buggered if you
want to recover the sums and may need to get things done right, there
are possible disasters here too.

You might find it cost effective to pay someone who knows how to
manage property to do it for you (pluses and minuses) we do in our
block. You might want to take legal advice too (or encourage the
management company to do so).

I haven't been through the leases, but I think they are pretty standard.
We
have a professional firm of property managers, AFAIK all the correct
notices
were issued, and I remember seeing a S20 notice a while back. The problem
is
one of democracy in inaction, as virtually all the leaseholders have a
share
in the freehold. With due respect to your book, Francis, I don't think
anybody wants to have a dispute. All the leaseholders agreed that work
needs
to be done, but they can't agree on a sensible funding level to get it
done,
as most leaseholders don't want to dip their hands in their pockets.

you seem to have confused the two problems, deciding upon the amount to
spend, and collecting it.

In a self managed block the first is usually done democratically, i.e. by
majority vote of leaseholders.

You seem to have reached the point where you have democratically decided to
collect 750 pounds per flat, so (assuming drawing up the lease hasn't be
stuffed up) you are contractually entitled to collect it.

So you (or a solicitor) sends a letter to the leaseholders informing them
that they are obliged to pay the money and that if they do not do so, action
can be taken against them for forfeiture of the lease and that permission to
sell the property will not be given until it is paid (these are not idle
threats, these are your legal remedies)


What I was wondering about was whether anyone had any practical examples
of
what has been done in these circumstances? Are there means for the
freehold
company to raise extra funds, perhaps through a loan or even selling the
freehold to someone else?

You don't even wan to consider this

To help chase up payment, can the freeholders inform the mortgagees of
defaulting leaseholders? Would the mortgages be at all interested?

Yes they will. If you write to them (you can find out who they are from the
land registry) informing them that the maintenance account is in arrears and
that action is to be started for forfeiture of the lease, they will normally
pay the money ASAP and add it onto the owner's loan. It would be good
manners to give the owner one last chance before you do this.

tim

On 29 Sep, 20:25, "tim....." wrote:

Yes they will. *If you write to them (you can find out who they are from the
land registry) informing them that the maintenance account is in arrears and
that action is to be started for forfeiture of the lease, they will normally
pay the money ASAP and add it onto the owner's loan. *It would be good
manners to give the owner one last chance before you do this.

Except that, unless the service charge is reserved as rent, you can't
forfeit for breach without service of a s.146 notice and you can't
serve one of them until a court or tribunal has determined the amount
of service charge owed, so such a threat would be empty and improper.

Francis

" wrote in message
...
On 29 Sep, 20:25, "tim....." wrote:

Yes they will. If you write to them (you can find out who they are from
the
land registry) informing them that the maintenance account is in arrears
and
that action is to be started for forfeiture of the lease, they will
normally
pay the money ASAP and add it onto the owner's loan. It would be good
manners to give the owner one last chance before you do this.

Except that, unless the service charge is reserved as rent, you can't
forfeit for breach without service of a s.146 notice and you can't
serve one of them until a court or tribunal has determined the amount
of service charge owed, so such a threat would be empty and improper.

--------------------------------------------------------

I tried to be careful with my words (as I didn't know what the process was)

but surely going to the court for such a determination is "starting the
action"?

tim