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15:51 PM, 3rd March 2020, About 4 years ago 31
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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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Jambone
16:22 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Adrian Atkins at 05/03/2020 - 10:15
Not applicable in these circumstances as the freeholder (separate company) has no access to the loft. Also, it's a tiny loft space.
Jambone
16:25 PM, 12th March 2020, About 4 years ago
In regards to roofers that I had to quote before this process started, they did inspect the roof but were 'ballpark figures' because I didn't have the specification from the surveyor to give to them at that point. My fear is that because the specification is so onerous (they are not even allowed to play music) that most smaller roofing companies didn't want to deal with the hassle of that 'red tape' (which is why I believe only 3/14 companies ended up submitting a tender – and those 3 were companies the freeholder/surveyor put forward) and the large companies obviously priced the job higher to make it worth their time. It was my understanding that at the previous stage of the Section 20 process, that I was only able to put 1 contractor forward, and on the notice of estimates I received back from the freeholder they, along with a few other companies, were marked as declined. I am still trying to ascertain whether the contractor declined the job or the freeholder declined their tender.
I was aware that VAT would probably be payable because I reputable company would need to be used - No complaint from me there.
I does seem like they have gone about this professionally, apart from the fact that the surveyors doesn't seem to have any formal surveying qualifications from what I can tell and not RICS.
I was always aware that it would cost more when the freeholder wants to carry out work, however, considering I know and trust a One man band type roofer that would get the job done to a very good standard for about £8K total, I assumed that the more reputable companies that (gave me a ballpark figure) charged VAT at £12-£16K was more the region I was expecting.
Jambone
16:27 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Clint at 05/03/2020 - 11:28
RTM does seem like a viable option, however, I would think that the freeholder is likely just to get the works done, regardless of a future RTM in place and then claim back the money later.
At what point in the section 20 process where you when you applied for the RTM? We are currently at the Notice of estimates stage which, I believe, is the last stage before they choose/employ and contractor.
Would you mind linking me your LVT case so that I can read through?
Why would it be better to apply with both leaseholders, as opposed to just me?
Jambone
16:27 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Gracie at 05/03/2020 - 15:18
While I believe the surveyor has used the cheapest contractor previously, they have stated clearing in this notice that the freeholder/surveyor/managing agent has no connection, financial or otherwise with the contractor.
Jambone
16:29 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Ian Narbeth at 05/03/2020 - 16:01
I am still concerned that, while the lowest quote chosen, by the surveyor being picky (e.g. picking, large companies and only wanting companies that are NFRC and won't even accept FMB) even the 'low' quote is much higher than they should/could be.
I got my own quotes just after the initial consultation of Section 20, which was Feb 2019. No idea why the freeholder has taken so long to get to this next stage.
One discrepancy in the price was I asked for quotes based on Redland 49 tiles, the freeholder, wants to use/reuse slate (it's currently a slate roof) and has, basically, refused to consider changing material type. Do you know if they are allowed to outright refuse to use another material?
Jambone
16:30 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Clint at 05/03/2020 - 17:12
See my reply above for more clarification, though your assumptions were pretty on point.
Jambone
16:31 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Puzzler at 06/03/2020 - 07:18
Indeed a better rate could be found elsewhere.
The freeholder is a different company and not connected to either of the 2 leaseholders.
I'm not sure if we are too far down the road with the current works to start the RTM process and whether we could stop the current Section 20 from going ahead.
Also if we were to go down the RTM route do you have any idea of other fee's could the freeholder could impose every year to make sure the RTM is complying?
Paul Shears
16:31 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Jambone at 12/03/2020 - 16:25
"the specification is so onerous (they are not even allowed to play music) that most smaller roofing companies didn't want to deal with the hassle of that 'red tape'"
This is otherwise known as standard corporate corruption.
Clint
19:03 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Jambone at 12/03/2020 - 16:22
The RTM takes over the duties of the Freeholder so the freeholder cannot charge you any fees and has no say but can be a member to represent themselves at a meeting. The Freeholder has the right to collect the ground rent and must be informed when the property is sold and may charge a nominal fee for registration. Besides this the Freeholder cannot interfere even if your management of the building is poor although, it would be in your own interest to keep the property in a good state of repair.
Don't waste any time apply for the RTM immediately. I personally would apply and not pay the management company anything for the roof. I take it that they have not started any works on the roof. I cannot see them doing anything without you making any payment and also knowing that you are taking over.
I have taken over about 5 management companies by serving the notices and getting the RTM but if not confident the sensible way to do it is to use a company that does this. There are many online that would do it for £500 and under
Clint
19:46 PM, 12th March 2020, About 4 years ago
Reply to the comment left by Jambone at 12/03/2020 - 16:27
I already posted previously without having read this post. I would think one way or the other it is best that you get the RTM for the future. If the management company presses away with the works, you have nothing to lose unless you consider paying around £500 to a specialist company for carrying out the works to get the RTM as money not well spent.
It would be best that both leaseholders participate in getting the Freehold as, firstly you could share the cost which in the above costs would be around £250 each and secondly it is best to apply with a united front where the Freeholder may have to take you both to court to get the money from you and you could delay things between the two of you by saying something like you want to get an independent surveyor to establish if the roof really does need replacing.
I tried to find the LVT case but was unable to and could not find any of my cases although, I had been to LVT & First Tier totally about four times the latest being in around 2014 for a lease extension.
From memory, we were at the stage where the management company was about to start the works but, none of the leaseholders had handed over any money which, prevented the management company from starting as they would have to make payments themselves.