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Communal repair in flats where freehold is jointly owned by leaseholders

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  • Communal repair in flats where freehold is jointly owned by leaseholders

    Hi, my first post here, have found this site most helpful!

    I have recently bought a top floor flat in a converted end of terrace building, with four flats in total, one per floor. Ground, first and second floor flats are all accessed by a communal stairwell, while basement flat has own doorway (however basement flat has access to stairwell for mail, etc). The top three flats are owner-occupied (inc mine), while the basement flat is currently empty and for sale, previously let out.

    The Freehold is owned by a management company, of which each flat owns a quarter share.

    In the lease agreement communal areas are described as the stairwell, loft/roof, drains, exterior walls, etc.

    A majority of directors of the management company (ground, first and second floor flats) are willing to spend to remedy some problems the building has, some of immediate urgency, listed below:

    - roof problems (leaks), requiring work (in process of getting quotes but in region of £2-5k).
    - Communal front door replacement as current one is not secure (~£400 job).
    - communal electrics are non-functioning (doesn't appear to be safety critical though, but no lighting).

    As far as I understand, the top 3 flat owners can use a majority vote to get the management company to sanction the expenditures, through which we can demand payment of a share of the costs from the other flat (leaseholder, but part-owner of management company).

    We have no sink fund in place, although we also wish to establish one going forwards - beyond the costs of remedeying the above problems. The management company doesn't have a bank account yet either; upto now fees for building insurance (and other miscellaneous costs) were paid by lease-holders to a lawyer-accountant (I'm working to get specific details from others) who then paid for the insurance.

    With this background, I have a number of questions:

    1) Am I correct in understanding that it is in our role as a lease-holder of a flat, rather than as part-owner of the freehold, which makes us liable to pay recurring costs (insurance, sink fund) and one off costs?

    2) If 3 out of the 4 lease-holders are willing to upfront pay directly for their share of the cost of doing the above work, what are the options with regards to getting the work(s) done ASAP? For example, could one or more of the 3 of us 'lend' money to the management company, which then subsequently demands it back from the basement flat lease-holder?

    3) If the basement flat is sold, will liability for money owed to management company (or individual who fronted the money) be transferred to new owner of the lease-hold? Am I correct in assuming that this liability ought to be found by the conveyancer dealing with the purchase, so perhaps an incentive for current owner to pay up promptly?

    4) If some of the work is urgent - ie repair of a leaking roof, is this recognised differently than say, changing a front door, which might be more viewed as maintenance?

    Thanks, Daz

  • #2
    Re: Communal repair in flats where freehold is jointly owned by leaseholders

    Hi all, in light of some reading and research I have done since posting the above, and given I cannot seem to edit the original post, I'd like to reword my queries more precisely:

    --Background:
    I have recently bought a top floor flat in a converted end of terrace building, with four flats in total, one per floor. Ground (recently bought), first and second floor (mine) flats are all accessed by a communal stairwell, while basement flat has own doorway (however basement flat has access to stairwell for mail, etc). The top three flats are owner-occupied, while the basement flat is currently empty and for sale, previously let out.

    The Freehold is owned by a management company, of which each flat owns a quarter share, a situation I believe is termed a "resident management company". In the lease agreement communal areas are described as the stairwell, loft space, roof, drains, exterior walls, etc.

    We have no sink fund in place, although we also wish to establish one going forwards. The management company doesn't have a bank account yet either; upto now fees for building insurance (and other miscellaneous costs) were paid by lease-holders to a lawyer-accountant (I'm working to get specific details from others) who then paid for the insurance.

    --Problem:
    The roof is leaking severely, and upon consultation with some tradesmen, it seems that the best course of action is to do some extensive work to it, eventually costing something of the order of £1000 per leaseholder.

    The top 3 flats (inc myself) met up and discussed the issue, and in principle agree that this is the desired course of action, pending some quotes being procured for the work.

    As I understand it, based on amongst other things, what I have read here and here, one must satisfy S.20 of Landlord and Tenant Act 1985, with regards to consultation on major works.

    As I am in the top flat, I want to make sure that the repairs are carried out swiftly, to a high standard, and that we do everything as legally sound as possible so that no one is left with liability should someone later on "change their mind" or refuse to pay.

    --Questions:

    1) a) Is there a way to speed this up, as the full process outlined in S.20 would take 3 months, and in that time, the consequences of water penetration would be severe. I have looked into seeking a dispensation from the LVT but cannot find anything specific.

    2) Assuming we do have to comply with S20 and that is the only route, do we (the 3 of the 4 lessees that took the decision) have to:
    a) maintain any paperwork of the decision
    b) serve the relevent notices on ourselves

    3) If we managed to get an 'ok' from the 4th lessee, would that be sufficient to carry out the works as soon as possible? I am unclear with regards to the legal requirements should all of us in principle be happy to have the work carried out. this question is tied up with the next, in terms of what is the best way to then take a unanimous agreement for work forward to the stage of procurement and payment.

    4) What is the normal process of paying for such repairs? Since we have no bank account nor any accumulated sink fund, for example would one of us pay the contractors, then procure cheques off the others? What kind of paper trail is satisfactory for this?

    5) If we go the route of S20 or some alternative, what is the situation with regards to seeking the proportion of the cost from the basement flat, if it is sold in the interim period? Would liability transfer with the transfer of ownership of the lease (if so, how would a conveyancer be made aware of this?)

    6) S20 talks about "major" work being that which would cost each leaseholder more than £250. What is the situation with carrying out multiple minor works, which individually came to less than £250, but on aggregate, came to more than £250? I struggled to find specific info on this. For example, the roof requires multiple things done to it. Would it be possible to break it down into multiple minor works?

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