9:36 AM, 26th August 2022, About a month ago 4
Hello everyone, I am a leaseholder in a small block of 6 flats that is self-managed through a limited company in which each leaseholder has an equal share (the Management Company).
The flats were created in 1989 by converting a 5-storey Victorian house. The leases for each flat, drawn up in 1989, specify a fixed proportion of the total costs of servicing, maintenance etc of the block to be paid by each flat; these proportions are 12.5% for 2 of the flats, 15% for one (the basement flat) and 20% for each of the remaining 3 flats.
The basis for these proportions is not documented but it is clear that it is not based on floor area – the basement flat has the largest floor area.
Some leaseholders have questioned whether these allocations are fair and reasonable and are suggesting that floor area would be a fairer basis.
If this course of action was taken it is likely that there would be more ‘winners’ than ‘losers’, with the main loser being the basement flat. Decisions by the Management Company are made by majority vote, so the ‘winners’ are likely to prevail in any vote.
Any advice on the following would be useful:
• Can the Management Company legally override the fixed percentages specified in the leases?
• Why is floor area often used as the basis for apportionment of service charges between flats? Is it for convenience or is it in some way considered ‘fair’?
• What examples of a ‘fair’ basis of service charge apportionment do members have experience of?