How binding is the wording on a lease?

by Readers Question

9:56 AM, 6th May 2015
About 4 years ago

How binding is the wording on a lease?

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How binding is the wording on a lease?

We own a couple of flats in a large block of flats and we are charged service charges set by the size of the flats. However, the new management company has increased one of the flats service charges to much more than the size. They say the percentage charge is in the lease  and cannot be changed yet it is a lot smaller flat and has had a lower rate for the last 13 years. How binding is the wording on a lease

Can they charge the extra if it is in the lease or do they have to charge what has been the percentage for the last 13 years?

Would love some advise on this

Thank you

David Corless



Comments

Mark Alexander

10:00 AM, 6th May 2015
About 4 years ago

Hi David

If the increase is significant then it may be wise for you to pay to have a professional contracts lawyer to interpret the contract for you.

A word of warning though; if you have been under paying all this time the management company may well be able to claim the difference between the under-payments from you going back for six years. Therefore, before you make too much noise about this you really need to know where you stand, otherwise you could be in for a nasty shock.

Contract barrister and Property118 member profile >>> http://www.property118.com/member/?id=1945
.

Joe Bloggs

13:40 PM, 6th May 2015
About 4 years ago

the terms of the lease are binding. you could seek rectification of the lease if its a blatant drafting error, eg all the percentages of all the flats exceed 100%.

dont understand how or why you were undercharged all these years. was it just an error or was it result of litigation?

Gary Nock

17:38 PM, 6th May 2015
About 4 years ago

I think if this is service charges then anything going back past 18 months cannot be charged. And the terms of the lease are binding. If the proportions are set in the lease then they cannot be changed except by a Deed of Variation.

And if there has been a change if management company was this as a result of Right To Manage or on the whim of the Freeholder?

david corless

19:36 PM, 6th May 2015
About 4 years ago

hello all thanks for the replies
yes this is a service charge
but in the origional lease it states that the it may vary from time to time
and as the first set of percentages are set out in a letter dated after the original lease does this not take over
also the lower rate has been in operation for the last 14 years
and the flat in question is smaller than others but they are now charging more
I wonder if this would mean all the leases being rewritten as the percentage is wrong
and the landlord said they do not have the sizes of the flats

Chris Amis

19:40 PM, 6th May 2015
About 4 years ago

I wonder if the other leaseholders will notice a drop in their contributions, if they do they could go after the FH I suppose.

Gary Nock

21:35 PM, 6th May 2015
About 4 years ago

Reply to the comment left by "david corless" at "06/05/2015 - 19:36":

David leases always make the service charge variable so it can increase over time. The lease trumps any letter unless it is actually a Deed of Variation in which case it will say so on the document. Unless the service charge percentage is as it is set out in the lease then it cannot be levied and you can make application to First Tier Tribunal for a determination on what service charge is payable.

david corless

7:07 AM, 7th May 2015
About 4 years ago

thanks for that


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