Freeholder charging £36k for a new roof for my BTL Flat!?

by Readers Question

15:51 PM, 3rd March 2020
About 8 months ago

Freeholder charging £36k for a new roof for my BTL Flat!?

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Freeholder charging £36k for a new roof for my BTL Flat!?

I am extremely ill informed as to what to do next. If someone could point me in the right direction, whether it be advice on here, or which professional I should be taking to about this  – I am happy to pay for a solicitor if that’s what’s needed

The building is a 2 story Edwardian house that was converted into 2 flats in the 70’s I believe. The ground floor is one flat and the 1st floor is the other flat. No shared space or communal areas. Both flats have their own external front doors.

I’ve just received the statement of estimates and accompanying notice in relation to the proposed major works at my flat. I’ve read threads on here so was able to submit my observations and my preferred contractor previously without issue, however the specification was 15 pages and read more like a spec for a large block of flats.

My preferred contractor declined the tender and the other flats preferred contractor didn’t respond. In total 14 contractors were contacted (3 of which were ones the other leaseholder and myself put forward – the rest the freeholder has sort), only 3 of which gave estimates. the freeholder is choosing to go with the lowest, which is £26k.

FYI: The original Notice of intention to carry out works was issues in February 2019 (if that makes a difference)

The breakdown for the project is as follows:

Contractor: £26,000
VAT@20% £5,200

Surveyors fee @ 11.5% to include 2% CDM fees: £2,990
VAT @ 20%: £598

Block management company fee @ 5%: £1,300

Total = £36,088

My portion (Half) = £18,044

This seems absolutely ridiculous to me. When i’d spoken to professional roofers at the time, they seemed to indicate it would cost somewhere between £12k-£16k plus VAT. And half that again for a one man band that I’ve used before and has done a friends roof for under 10K

The surveyor, has said: “that the freeholder is willing to offer payment plans over 3 years at an interest rate of 5.99% per annum on a reducing-balance basis. He would also support us meeting with leasees in person to discuss alternative means by which the freeholder would be able to perform upon its repairing covenants.”

– What does this mean? FYI The managing company were originally wanted to do repairs to the roof but they seemed expensive (£3k for replacing some slates and 2 new gully’s). At the time a friend had had his entire roof replaced for under £10k so wanted to see if that was a better option in the long run. They then switched to wanting to do a notice of major works for full roof replacement.

A few thoughts come to mind

a) We had no say in who the Surveyor was, or able to put forward our own. 11.5% + VAT for someone to write a specification and oversee the work seems very expensive. Should the surveyor have been part of the tender process?

b) Why does the management company want 5% of this project? We pay £250 per flat per year to the management company (one-man band), all they do is send out a few letters each year regarding insurance and service charges.

c) should the management company not be the ones to who write the spec and oversee the project

d) The management company has said “ Can you please ensure that funds are available to forward to us upon request”. I’ve read my lease a few times and it doesn’t seen to have a provision for advanced payment, Is this different for Major works?

Absolutely any help will be appreciated!

Thank you

Shocked Landlord


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Comments

Neil Patterson

15:56 PM, 3rd March 2020
About 8 months ago

Hi Shocked,

I am no expert but to get you started procedures are detailed out in the Leasehold Advisory Service website >> https://www.lease-advice.org/faq/what-should-the-notification-of-award-of-contract-for-major-works-contain/

What should the notification of award of contract for major works contain?

This notice should be given within 21 days of entering into the contract. It must contain the reasons for the award of the contract and give a summary of the leaseholders’ observations regarding the estimates or provide a place at which these could be inspected. This notice is not required where:

the contract has been awarded to a contractor nominated by a leaseholder or recognised tenants association (RTA)
the contract has been awarded to the contractor with the lowest tender.

Paul Shears

20:54 PM, 3rd March 2020
About 8 months ago

There is nothing about this in my opinion, that is not either very worrying or plain outrageous.
If you think that there is no immediate urgency to fix the roof, then get together with the other leaseholder and get rid of the management company.
Then form an opinion yourself based on clear evidence on what needs to be done and why.
I see absolutely no reason to employ anyone who is not going to actually do the work themselves.
Even an entire new roof on a small flat should not come to this unless there are some pretty restrictive practical details.
To state the obvious, one thing that you can say about virtually all readily available building materials such as ordinary tiles, upgraded felt, battens and galvanised nails, is that they are cheap. It's the labour that costs the money. Even scaffolding can, if you have the right contact, (A builder with a good relationship with a scaffold company) be rented at less than half the usual market rate. E.g. Market rate for scaffolding on the front of a three storey property in my area: £900 Price actually paid £320.
An important thing to consider here is timing. You need two or more fit and healthy chaps and a weather window to get the job done in. This assumes that the job is not so big that the whole house has to be covered with a protective weather scaffold.
I have four properties that have been waiting for the right five days without rain for several months but I do not have an immediate crisis. The result of this is that the quote is way under half what other roofers would charge but still allows the roofer to make a good living as 90% of my job is labour.

Graham Bowcock

9:02 AM, 4th March 2020
About 8 months ago

As a former managing agent, roof repairs were the bane of my professional life. They can be expensive - usually more expensive than most people think.

It sounds like your managing agent has gone about things correctly in terms of notices so you will have had chance to comment and suggest contractors. If you really don't think the repairs are necessary then you and your fellow leaseholders need to get together and challenge.

You mention that professional roofers have said the price should be lower - but why did they not tender?? I hear so much "pub talk" on similar matters, but it doesn't hold water when you come to get actual prices based on a proper specification.

I find it very hard to get roofers and, rather oddly, this is an area of work where health and safety rules are frequently not adhered to, despite being one of the most dangerous jobs you can do. Your managing agent (or their consultant) will have had to arrange a detailed risk assessment which the contractor has to abide by. This is essential. Remember that the managing agent has a much greater responsibility than a private householder. This inevitably means no ladders and more care to be taken (at a greater cost).

As for the management company charging 5%, this sounds cheap. They have a role to oversee the project, including the legal notices and duty of care to the members. There is no way that their regular management fee should include managing structural repairs. I think they are right to outsource writing the spec. - as a chartered surveyor of 30 years I would not write a spec for a new roof myself.

Debates such as this led to my early retirement and disillusion with management work. Everyone can do it cheaper and better.

On the face of it, it seems that procedures have been followed. The key query is over what actually needs doing, which nobody on this forum can answer for you.

J Kaapa

9:48 AM, 5th March 2020
About 8 months ago

Hello Shocked
I don't understand why you should be in this situation. As far as one can understand from your text you own half (50%) of the block and your neighbour the other half. Who is the freeholder? Usually one of the flats would have held onto the freehold. Anyway, I own a flat in a block of four. I was trying to buy the freehold but could not get another flat to pursue it with me (you can purchase freehold if 50% of the block pursues it). Secondly, you can kick out the management company if you have 50% leaseholders agreeing to it. So, why can't you (even without your neighbour if they don't want it) to just kick out the management company as you own 50% of the block and then just find a roofer. And, within that £36K you were quoted you could buy the freehold and the roof. Even better if you and your neighbour come together and just create a 50:50 shared freehold which then carries on forever when the flats are sold for the new owners. As you are learning, this whole leasehold system is a remnant of the feudal society Britain never totally freed itself. As a leaseholder you are a modern tenant farmer at the whims of a landlord. As a European, we are always baffled as to why the government does not simply take down the system.....may be because they are the landlords.

Adrian Atkins

10:15 AM, 5th March 2020
About 8 months ago

Landlord I know opted for a loft extension instead, didn't cost him much more than roof, but increased rental and resale value. Made it a separate flat. Depend on planning of course and maybe other issues.

Ian Narbeth

10:25 AM, 5th March 2020
About 8 months ago

Reply to the comment left by Graham Bowcock at 04/03/2020 - 09:02I agree Graham. If the "professional roofers" thought it could be done for £12-16K (did they inspect the roof, look at a specification?) why did they not bid £20K and make a super profit? 14 contacted and only 3 responding suggests that the job is not as simple as it might appear to a layman.
The VAT is unavoidable unless you use a very small outfit whose turnover does not meet the VAT threshold. The managing agents cannot be faulted for using a VAT registered company. It appears the managing agents have gone about this in a professional way. The offer of finance is reasonable. If Shocked Landlord can borrow more cheaply then he should do so. He should be able to set the cost and the interest off against taxable profits.
Subject to Neil Patterson's points about the procedural steps, I think Shocked Landlord will have to treat this as a business expense and a lesson that with leasehold property the tenant does not control the timing of repairs and that the cost of work is higher than if you are a freeholder controlling the job yourself.

Clint

11:28 AM, 5th March 2020
About 8 months ago

My suggestion would be to immediately apply to get the "Right to Manage". It may take some time but, in the meantime, just don't pay for the roof works as it sounds like you are being ripped off.

We had the exact same situation in 2006 where the Freeholder served notices for a new roof. I had a roofer that I used regularly and still use to this day that had a look at the roof and stated that the works needed was a repair which was to cost from memory around £200. The new roof was to cost substantially more than the estimates we had from other roofers (cannot remember the costs) and of course the Freeholder wanted an additional 10% for management.

Having received the notice for RTM the Freeholder tried to rush the work through by stating that it was essential and applied to LVT (Equivalent to First Tier Tribunal). At the LVT hearing, the decision was to get an independent roofer to look at the roof. In the meantime, we did not pay anything to the Freeholder and time was passing to the point where we were close to getting the RTM.

The Freeholder gave up pursuing his claim obviously knowing that a new roof was not needed, and we got the RTM and all costs have been minimal ever since then and to this day we have the same roof with no problems where we had the £200 repair carried out in around 2006.

I also have two flats in a house conversion of four where we have been maintaining ourselves since around 2002 and over a year ago the Freeholder had written to us saying that he was going to take over the management and wanted to do some major works. We wrote back saying that if he did not let us manage ourselves, we would apply for the RTM. We never heard from him again.
If rules have not changed recently, you need 50% of the leaseholders to start the application for RTM. In your case, you could apply on your own but would be better for both of you to apply together.

Best of luck.

Paul Shears

11:46 AM, 5th March 2020
About 8 months ago

Reply to the comment left by Clint at 05/03/2020 - 11:28
Well said sir! The all-prevalent idea in every walk of life that if you fill out a form and pass a problem onto someone else will be the end of all of us.

Gracie

15:18 PM, 5th March 2020
About 8 months ago

Contractor: £26,000, ask them if a portion of this will be a kickback to them, as a thanks from the contractor for using them.

terry sullivan

15:18 PM, 5th March 2020
About 8 months ago

leasehold has to be totally abolished for residential

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