3 new flats and garage demolished but no reduction in service charges!

by Readers Question

10:08 AM, 22nd July 2016
About 2 years ago

3 new flats and garage demolished but no reduction in service charges!

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3 new flats and garage demolished but no reduction in service charges!

I own a purpose built flat in a block of 8. The freeholder obtained planning permission to build a further 3 flats at the development. As our garage was to be demolished we appointed a PWA surveyor. cost

The surveyor was informed that all building works had been completed in April but the freeholder is claiming that completion has not been ‘signed off’ and is still charging service charges of 1/8th.

All three flats are on the market for sale with one shown a sold subject to contract. I suspect the freeholder is stalling in order to ensure all charges are paid by the present 8 flat owners and will not adjust the charges over the now 11 flats until the new flats are all sold.

Is he allowed to do this?

All responses will be much appreciated.

Gail



Comments

Neil Patterson

10:15 AM, 22nd July 2016
About 2 years ago

Hi Gail.

I am afraid I am no expert but I would start with the Leasehold Advisory Service >> http://www.lease-advice.org/

Gail Nelson

10:37 AM, 22nd July 2016
About 2 years ago

Thank you Neil. I have tried LAS and as usual they have no answers. I think I need some clarification of what defines 'completion' of new builds.

best regards

Gail

David Aneurin

11:39 AM, 22nd July 2016
About 2 years ago

Generally the freeholder should be paying service charges. In a In a normal situation service charges are payable form a particular date written into the lease. Have the new flats been included on the insurance policy? As the flats are up for sale that could be judged as being complete.
I assume you were recompensed for the loss of the garage.
I also hope that you are thinking of taking over the management via an RTM or even buying the freehold.

Steven Burman

12:18 PM, 22nd July 2016
About 2 years ago

Gail,

There is a point in the contruction process know as 'practical completion'. In simple terms this is when the building/development is deemd to be 'habitable' and the building contractor hands 'ownership' of the building/development back to the owner/freeholder although there could still be non-essential or snagging works to complete. It is normally at this point that the freeholder will become liable for utility bills, council tax etc.

It is normal practise for the freeholder to issue new leases for the new properties and amended leases to the existing to take effect from this point - thus having the effect of the service charge being calculated at 1/11th rather than 1/8th in your case. But remember that this will be based on the inclusion of the addition costs of running the 3 extra properties.

Unless there is good reason for this not to happen I would be questioning the motives of the freeholder.

It sounds like you need to get together with the other 7 leaseholders and get yourselves some specialist legal advice.

Good luck.

SB

Gail Nelson

12:29 PM, 22nd July 2016
About 2 years ago

Thank you for your reply David.

I, and one other flat owner, have considered a RTM but have been unable to obtain responses from others. As 3 new flats have now been constructed we will have to wait for them to be sold and then try again to contact all owners to try and achieve number required to form RTM. The service charges are very high and getting higher with services being very unsatisfactory.

I too thought that the freeholder should be paying the contribution to service charges for the 3 new flats but am being told that this will not happen until completion has been 'signed off'. I will ask for a copy of the insurance policy and see if this will be provided. The management agent is not very helpful and is always reluctant to provide any copies of paperwork but hopefully an insurance policy will be different.

Our garage situation is fine but as expected parking is now a problem with two garages demolished to enable the new building work. Disabled parking and visitor parking spaces now re-marked for parking spaces for new flats. There is no available off road parking either.

best regards

Gail

Gail Nelson

13:15 PM, 22nd July 2016
About 2 years ago

Reply to the comment left by "Steven Burman" at "22/07/2016 - 12:18":

Thank you Steve.

Your comments are all as I believed should happen and will refer to other leaseholders and decide on what we do.

best regards

Gail


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