lease agreement :-ref maintenance

[andyv]

Hi, can anyone advise.

The situation.

I own a flat (leasehold ) and have also brought the freehold to the mid victoria terrace that contains 2 flats , my flat (maistonette) & one basement flat (also leasehold) which i do not own.

Both leases were written in 1976 and are not written in plain English !
The maintenance proportions is worded in both leases as the "proportional rateable value the properties" . The rates went to council tax years ago... so how is this calculated in todays terms ?

I have always paid 2/3 of all maintenance costs because i own the larger flat.

But there has never been an anunnal maintenance sum to pay in (every 6 months or yearly) like many other flats do in Brighton.
Sums have been paid out on a ad-hoc basis when the previous leaseholder /freeholder required. This worked ok untill a large bill occurred recently and there are others to follow " ie roofing work" and exterior rendering. The lother easeholder is old and cant afford the bills because of a sudden payout is required..... even if i pay my 2/3 rds.

But now i have the resonsibilty to the other leaseholder for the exterior of all of the building.
I would much rather have the leases changed so that monthly amounts from both parties are payed into an account (sinking fund) then money is less hard to find when things need doing.

The question:-

If the current other leasehold doent want to do this , have i as the only other leaseholder & now freeholder got the right to change the maintenance arrangement over to a monthly payment sytem that we both put into.
Would i have to take legal advise on this .... & how much is it going to cost me if i can change the maintenance arrangements.

[Poppy]

Please will you share with the members what the lease says about actually paying for maintenance (not the proportions, you've already mentioned that).

How much notice and consultation have you had with the other lessee about the re-roofing and exterior rendering?

You cannot unilaterally alter the clauses of the lease.

At the end of the day, your fellow lessee will have to pay their share in whatever manner.

[andyv]

Hi, I have to produce accounts every 6 months as per lease agreements. Recently in 2003 the two leases were changed (deed of variation) to allow the ex-freeholder to ask for funds to complete any necessary building repairs within 7 days...as there was no sinking fund & emergencies repairs do happen ie flat roofs !
This was allowed by myself & the other leaseholder of the property in exchange for 25 year lease extensions ! (deed of variation) as both flats only had 74 years left. This occurred as the new leaseholder was buying her property for cash back in 2003 & was brought up when she purchased it, she contacted me & we both paid of the legal bill to have this implemented.
When i questioned it with my solicitor when buying the flat he said that i may have trouble selling in 5-10 years with a shorter lease so it wasnt a bad deal as charges for lease extensions can be high.

current slight probelm is:-
If a somebody doent what to play ball with maintenance & they own the flat outright (as in this case) it can (it is) a nightmare especially if they say i have not got the money ...or just ignore you.

[Poppy]

I don't believe that you have answered my questions. You have added that the freeholder produces accounts every six months. You still have not specified what the lease says how/when the lessee pays also if it is in advance/arrears?

You have also not mentioned how much notice you intend to give prior to carrying out the works.

If these aren't the issues you are concerned about and I'm barking up the wrong tree, please correct me.

If a lessee's service charge is not forthcoming in a manner acceptable to the freeholder under the terms of the lease, then the freeholder has the right to recover the money through legal action - which may lead to forfeiture.

[andyv]

I don't believe that you have answered my questions. You have added that the freeholder produces accounts every six months. You still have not specified what the lease says how/when the lessee pays also if it is in advance/arrears?

You have also not mentioned how much notice you intend to give prior to carrying out the works.

If these aren't the issues you are concerned about and I'm barking up the wrong tree, please correct me.

If a lessee's service charge is not forthcoming in a manner acceptable to the freeholder under the terms of the lease, then the freeholder has the right to recover the money through legal action - which may lead to forfeiture.

Sorry but i dont know all the lease details without having it in front of me...its jargon in places is somewhat difficult to understand...but from my understanding of the leases maintenance accounts are set for Twice a year in June and december and the accounts are in arrears to the lessees, all maintenance schedules are discussed and agreed with leaseholders before anything is done....ie quotes shown dates & then builders agreed on. Sometimes when a probelm occurs & money is required asap for a repair ie roof is leaking this is when probelms occur .... ie no money in a sinking fund.... as no funds are paid in on account of maintenance in advance for the year or every 6 months .
There is the 7 day clause now in place (in the deed of variation) where any resonable amount of money must be paid in 7 days in order to do any repairs this was add for emergency maintenance issues, but i have already discovered that this is problematic as it doesnt encourage lessees to save for any necessary maintenace requirements.
I hope that answers your previous question.

[Poppy]

So you seem to be tentatively saying that service charge is paid in arrears.

I am a freeholder like yourself. Charges for things like buildings insurance I lay out the money myself and invoice the lessees after. That's my choice. However I understand very well that the leases provide for me to bill the lessees in advance of any or all expenditure.

When the roof was renewed a few years back, the lessees and I consulted on several matters including:

the quotes received
how much each lessee would have to pay
when the work would begin.

This all happened and was documented more than a year before the work started. All lessees therefore had reasonable time to fund their share of the cost.

I certainly invoiced the lessees and received the money on a scheduled basis in advance of the work starting.

This is why you need to be clear about what you can and cannot do under your particular leases.

If you can only reclaim the expenditure in arrears, then you must factor in any finance charges incurred.

[andyv]

Yes, i do the same by billing , including insurance in arrears to the leaseholder, via the maintenance accounts.

I understand your leases allow you bill in advanance as long as you have had the quotes and the work is agreed with the leasees, but i will have to read mine and may be get a solicitors advice to ensure i do things correctly.
How can i be sure i can do the same thing ie
"invoice the lessees and received the money on a scheduled basis in advance of the work starting." What do you mean by " on a scheduled basis" is this in the leases is that monthly payments or just a demand for money via the maintenance accounts ?

This is ok for pre-planned maintenance ie painting exterior or any other known probelms that can be done over a period of time.. more probelms occur when raising funds when a probelm arises that needs urgent attension.

[Poppy]

This is an example of scheduling payment of an invoice (wish I could format it better):

Say total cost is £6,000. Your lessee must pay £2,000 (you already suggested they pay one third).

Date
Addressee
Description: Roof renewal and external rendering of 123 High Street at £2,000
Payable on or before 1 January 2006 £1,000
Payable on or before 1 February 2006 £500
Payable on or before 1 March 2006 £500
Total £2,000

Do you get the idea?

Scheduling payments is my way of showing that I am human and I also sleep better - but I don't schedule things in a way that leaves me out of pocket.

[andyv]

Many thanks for the replies, the ex- freeholder wasnt a good comunicator and i have brought the freehold in order to better more efficient & effective job of maintaining the property that i have a vested interest in......i should have asked more questions to the solicitor at the time of purchase, but like everthing in life you dont alway ask the right questions when you are in-experienced...... these things always take time.:)