Any alternative to defaulting on the service charge and getting repossessed?Make Text Bigger
Ten years ago my husband and I bought a newly converted leasehold flat for my husband to live in for work purposes when working away.
Shortly after purchase the management agent sold the freehold and the service charges increased significantly.
A tribunal ruled that electricity charges be itemised separately (although individual meters were put in each of the 17 flats, none were connected, which only became obvious upon moving in.)
Many leaseholders defaulted on the service charge and were repossessed, meaning we are now the only original leaseholders. The flats are above commercial premises and therefore we cannot get Right to Manage.
The flats are no longer mortgable. We took out an interest-only mortgage which comes to an end 2017. The service charges and repair costs on flat have prevented us being able to pay off mortgage.
The building is now in a bad state of repair and the management agent has said the sinking fund is not enough to cover the repair bills due to the many defaulting lessees. The flats sold way below the value of what we paid for ours (140,000 in 2005) are now worth less than £90,000.
The flats are easy to rent out and we have always found tenants easily, fortunately.
I have acted as spokesperson for most of the other current leaseholders and we are in contact, having explored right to manage unsuccessfully.
This issue is a major concern and I have been proactive on the buildings many problems for ten years.
What is now causing extra concern is that the building is in a bad state of repair and the sinking fund is not enough to cover the costs. (A building survey has just been completed) and we are being asked to put up more money to cover the repairs which have arisen due to the defaulting flat leaseholders.
A horrible situation and I would much appreciate some thoughts/advice on whether we can refuse extra payment. The rent of the flat has barely broken even for ten years and covers service charge, internal repairs and mortgage. I am getting older and this situation is not sustainable. Is there any alternative to defaulting on the service charge and getting repossessed as most of the other leaseholders have done?
We cannot afford legal advice and did originally try to seek redress from the conveyancing solicitor who failed to give proper advice concerning the purchase, I believe.
Any thoughts/advice would be greatly appreciated.
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