Major works payment issue

[londongal]

Our property has 10 flats and we all have a share of the freehold. I recently arranged for some maintenance work to be carried out and followed the required consultation procedures. However, once the work started it became clear that the repairs needed were double what we had envisaged and a replacement rather than a repair would be the most cost-effective solution. (even though it was more expensive). As the work has already started and the builder gave me a very reasonable quote for the replacement, I phoned all the other residents asking for them to vote for the replacement or the repairs and 8 out of 10 voted for the replacement option. The works are now complete and one of the 2 that voted for the repairs only is refusing to pay claiming that the correct consultation was not carried out and that the work was not necessary.

Any advice on how to proceed with this would be appreciated.

I was thinking of going to the LVT to apply for restrospective dispensation and was hoping that the fact the 7 other leasholders all agreed with the works would help my case.

[animal]

I'm not a solicitor but have been reading LVT decisions on consultation. LVT are quite strict and to obtain retrospective dispensation it really needs to be urgent, i.e. the building is falling down or suchlike... If the proper consultation hasn't been carried out then the cost can't be recovered.

You might point out that the company will be insolvent and their flat unsaleable if they don't pay... I would suggest the best bet is gentle persuasion.

[londongal]

Thanks Animal. I too have been reading some LVT decisions and get the impression that they can cometimes take common sense into account and the views of other leaseholders so I may have a chance, especially using grounds of safety and cost effectiveness.

I was wondering if the fact that all leaseholders are also shareholders (most also directors) of the freehold company would also affect this as it was a company decision to go ahread with the works.

[animal]

I was reading a decision a while back where 7 of 8 lessee/shareholders voted in favour, 1 objected and the LVT found in favour of the 1. Taking an issue like this to LVT is risky and you may not be able to charge the costs back through the service charge.

IMHO Gentle persuasion is the way to go. It may be they can't afford the costs, but are embarassed to say so.

[ram]

all leaseholders are also shareholders (most also directors) of the freehold company .

Then you have had a management vote and the others have to abide by the vote.
There was a vote of 10 out of 10 to do the repairs, and 8 out of 10 to do the right thing to replace. There is no need to go LVT route whatsoever.

even without a majority vote, repairs can always turn into replacements, -- that's life .. tough ... that's the way it goes.
Repairs are always an estimate till items are inspected / dismantled.

Assuming the works ARE aboveboard, then the "Management" have agreed to the costs, and the objectors --must-- pay.

[animal]

Then you have had a management vote and the others have to abide by the vote. There was a vote of 10 out of 10 to do the repairs, and 8 out of 10 to do the right thing to replace. There is no need to go LVT route whatsoever.



Assuming the works ARE aboveboard, then the "Management" have agreed to the costs, and the objectors --must-- pay.


Ram,

Can you supply any legal precendent to back up what you say?

Regards

[ram]

Ram,

Can you supply any legal precendent to back up what you say?

Regards

Sorry, legal precendent ?????????

A Management Company ( Ltd usually) is a Business Governed by the Companies act. The Directors vote, pass resolutions, and act upon it.
As do all Limited Companies.

Nothing to do with leases ........ Yes, we KNOW it's about flats, houses etc, but it's a Management majority vote.

O.K. - the work cost more than envisaged for the good of the longevity of the building by replacement, rather then repair, and possible replacement later on.----- tough, live with it, it happens.

In the long run, the replacements will save money in the future -- a wise and correct decision, so to object to paying anything by one resident after they voted to have the work done initialy, is just that they can't afford it. But if it comes out of the maintenence funds, then there is no problem.

londongal did the right thing in notifying an increase of costs and 80% agreed.... You cant have a majority vote to do routine essential work / maintenance questioned every time, as you may as well not have a management company.

Yes - there ARE many instances when you go to the LVT, but this is not one of them, because its routine essential maintenance ( in my opinion ) and bricks, concrete, steel etc does not last forever.

[londongal]

So really it's their legal obligation as a freeholder rather than as a leaseholder that is the key to making them pay their share and therefore a matter for the Small Claims Court than the LVT.

[ram]

So really it's their legal obligation as a freeholder rather than as a leaseholder that is the key to making them pay their share .

Well, maybe either .

Long answer below, as i don't know how long you have been doing the Management.

The Management company looks after all aspects of the building.

Provided the Management company have done nothing wrong in the repair or replacement of items that were in need of maintenance / repair / replacement, A decision was made that the "major" works needed doing, and the one objector initialy agree it wanted doing.

Often, people know that if they had their own house, that they can put off repairs indefinitely, but when in a block of flats, they cannot ignor work that --has-- to be done. And that annoys some people when they are in a block, and you will meet this occationaly, where they retract their first statement to pay.

It's the duty of the Directors of the Managing company to look after the building in a reasonable and responsible manner, ( Or "The Company", according to the Companies Act ) and maintenance cannot be ignored. You have shown to be responsible ( in this instance ) and if the objector is a Director, then they have to act in the same manner, or he/she should not be a Director.

But to answer your question, Small claims court could be your recourse, but get additional advice in future if it comes to this, as the objectors reasons may have changed by then.

Suggest you talk to them, apologise for the increase, and quote things you think you need to from all these posts to make your point, but it has to be done, and they have to abide by the decision to pay the increased costs, which is no fault of yours, but see others posts here as well.

I think if you sue someone, it has to now come out of company funds, so tell them if they -do- contest the payment due, the starting figure ( here ) to start proceedings via a Solicitor, is £ 2600 and the other residents may not be too happy at that., but if objector loses, they have your costs to pay as well. - so butter them up .... -- best of luck

R-a-M

[animal]

Ram, Londongal

From a legal viewpoint the only way to forcably collect service charges via a court is if the item is specified in the lease and you have complied with the statutes.

The company can make any decision it likes, but if you (the company, the majority shareholders) have not fulfilled the statutory requirements any individual member can refuse to pay and there is nothing you can do about it. It may be possible to win in the small claims if the defendant doesn't know his/her rights, but I wouldn't bet on it, especially as they seem to be objecting specifically because of lack of consultation. There is a reason for the word 'limited' in limited company...

Have a read of this (http://www.arma.org.uk/files/LAN07.pdf)

[ram]

quote=animal;97611 Ram, Londongal

From a legal viewpoint the only way to forcably collect service charges via a court is if the item is specified in the lease and you have complied with the statutes.

True, but you will find in 99.99% of leases that the flat owner agrees to pay the service charge, and usualy a clause for unforseen items where owners can be **asked for a percentage of emergency / unforseen items - so of course you can sue.

The owners WERE **asked.

It may be possible to win in the small claims if the defendant doesn't know his/her rights, but I wouldn't bet on it,
The objector agreed to the repairs and to pay, and is only now changing his / her story to get out of paying.

There is a reason for the word 'limited' in limited company...
It means that the company is only limited to the amount of the cost of shares the company or shareholers if it gets sued / goes bankrupt ( The directors are only liable for a total of £100 )
Our company has a limit of £ 100 so we are only limited to £ 100


Have a read of this (http://www.arma.org.uk/files/LAN07.pdf) ( S20 Consultation and Major works )

Of course we have, -and- i repeat, objector is only now changing his / her story to get out of paying.

By the way, we had an agreement not to comply to the the S20 as we here are recognised as being 100% above board and fair, and for urgent works up to £1000 it was deemed that it would take 4 months or more to get the go ahead, ( Owners abroard, contracters dont quote, etc etc etc. and when some things have to be done within 4 weeks, it has to be done in 4 weeks.

The bottom line is - an owner changed their mind, and now don't want to pay, ( as far as it seems )

R-a-M

[animal]

I phoned all the other residents asking for them to vote for the replacement or the repairs and 8 out of 10 voted for the replacement option. The works are now complete and one of the 2 that voted for the repairs only is refusing to pay claiming that the correct consultation was not carried out


My understanding is that two objected to the increased costs when telephoned. One of those is refusing to pay and IMHO within their rights under statute.

[Stillere]

Animal is absolutely right, the company cannot vote to waive rights given to lessees by statute. The proper consultation must be done regardless.

I would also agree that LVT's are fickle things and the outcome of a request for dispensation cannot be guaranteed. However, if you went to court to enforce the debt the moment the defendants mention "failure to adhere to s20 consultation procedures" the judge will transfer it to an LVT anyway.