Freeholder owns flats as freehold and not paying service charges?

Freeholder owns flats as freehold and not paying service charges?

11:13 AM, 23rd March 2022, About 2 years ago 12

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Hello, there, I’m looking for some advice, please. I own a flat in a block of 160 flats where the Freeholder owned the management company that dealt with the service charge, after a battle for many years we eventually got the RTM.

We found out that the Freeholder owns quite a few flats within the building that are Freehold and not Leasehold like everyone else’s, there’s nothing to state that they pay towards the running costs or maintenance of the building.

They even charged rental for the wiring of the intercom system at 10k per year.

I’ve owned my flat since 2002 when the building was first built, but it looks like they have never paid anything in the last 20 years.

They said they will pay an agreed amount towards the service charge, but this never happened

The problem is, freeholders are the only ones that can force foreclosure.

The building is in a very bad state and desperate for the money, on top of all that, we have the cladding issue to deal with and balconies that are made with wood platforms which looks like the Leaseholders will have to pay as well as a new fire alarm system.

Our solicitors are looking for a sit-down mediation, but they are a big property development company with deep pockets, and they don’t mind delaying or referring things because the amount of money they owe is far less than their solicitor’s costs.

My questions are has anyone been in the same position as this and if so what did they do?

These are shared facilities in the building, surely they have an obligation to contribute, and how should this be calculated fairly?

Can we hold back facilities on their flats, i.e Need to get their own buildings property insurance, can’t use the lifts or concierge services and parking enforcements etc.

Any advice would be much appreciated.

PH


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Comments

SCP

17:08 PM, 24th March 2022, About 2 years ago

Thank you.
Unless you want to be a litigant in person, you have to go to a solicitor.
To minimise costs, gather all the information: your Title Number, copy of your Lease; Title Number(s) of the Freehold Flats (the retained part) and a plan.
History and facts: ground rent, service charge paid so far and to whom; is there one or more block (vertical hereditament).
What is your problem now, and what remedy do you seek.
I am going on holiday now, and will not be able to answer any further regarding this matter.
Good luck.

BernieW

15:29 PM, 25th March 2022, About 2 years ago

It is a shame you didn't find out the facts BEFORE going for Right to Manage. Had you done a simple search at HM Land Registry you could have seen how many leases existed - and hence there were flats with no long lease. But you are where you are.

Action 1 > RTBL ... Read The Bl**dy Lease ... your lease ... to see if there is a clause whereby the freeholder agrees to act as if there was a lease, for those flats where there is no lease (unsold flats).

If there is, Action 2 > you can enforce the service charges via the First-tier Tribunal (Property Chamber) ... for example. Alternatively, if you've served legal service charge demands, you could go vis the County Court and a straight money judgment.

Action 3 > if the above two won't work because there isn't an obligation to 'behave as though there were a lease' then your RTM is doomed. You'll be paying 100% of costs but not recovering 100% and the the RTMCo will go bust. Therefore, cease the RTM and hand the management back to the freeholder.

Then, Action 4 > enforce the terms of your leases via the FTT ... and make certain the freeholder incurs the expenses they need to incur in order to comply with the services provisions of the leases. The fact that they cannot recover 100% of the expenditure is their problem and no longer your problem.

If all else fails, Action 5 > apply to the FTT for the appointment of a Manager. That will work IF that manager is provided with an Order that has the right management provisions; i.e. correcting the deficiencies of the current non-100% recovery.

Moral of the story > RTM should only be claimed when you know ALL the facts ... and those facts will allow RTM to work. If the facts show management deficiencies, don't claim. Chose another route.

Second moral of the story > get good professional advice BEFORE you jump into the unknown.

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