Leaseholder refusing to contribute towards ‘Major works’?

Leaseholder refusing to contribute towards ‘Major works’?

9:32 AM, 16th January 2023, About A year ago 22

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Hello, Firstly thanks for taking the time to read my article/questions.

I have recently acquired a property and freehold which comprises of 5, 1 bedroom flats. 3 of which are owned by myself two of which have separate individual owners.

For ease, and anonymity, I am going to call the individuals “A” and “Z”.

“A”, resides in their flat and has been paying ground rent, insurance, service charges etc on time, in full, upon invoicing. A real pleasure to deal with.

“Z” has invested in a leasehold property, which they rent out to a paying tenant. They (‘Z’) are frequently late paying service charges, rarely pay in full and often are being chased for their contribution to all associated costs.

“Z” has an un-mortgageable property as the lease left on the property is less than 65 years.

“Z” and I have had numerous conversations about renewing the lease, which I am happy to do, but he is not willing to pay all the costs associated and actually can’t believe that the costs involved are so high. (In excess of £10,000).

This year, following on from some bank valuations I had done throughout my property portfolio and looking at the leases granted to both “A” and “Z”, I could see that the external of the property is to be maintained and repainted every 7 years.

I spoke with both lessees verbally after meeting with them to issue them with the year’s invoices regarding the lease and we all agreed the property would benefit from paint and remedial works.

The works would require a scaffold around the entire property, new guttering/fascias where applicable, two coats of a high quality paint, some rendering in areas where it has fallen into disrepair and, of course, whilst the scaffold was erect, we would take the opportunity to survey the roof.

To try and progress the works, this was initially quoted at around £13,000 (a great price of yesteryear) and passed on to both lease holders, with their contribution being around £2,600 each.

‘A’ was delighted and sent a cheque to proceed.

‘Z’ involved a solicitor, baffled that he has to contribute, which then meant we had to formalize the process, serving section 20’s and delaying the works.

After formalising the process, wasting a load of time, having someone come to survey the property, we are now faced with quotes of £38,000 + VAT and £29,000 (no VAT).

The consultation period has now ended, of course I have decided to proceed with the £29,000 quote and in such a fast moving world we’re now want to progress this before were hit with even higher build costs.

I have received a cheque for £6,000 (approx) from ‘A’ for her 1/5.

I parted with my £18,000 for my 3/5.

Once again, now we have requested payment for £6,000 from “Z”, he disagrees, despite no communication throughout the consultation period.

Of course. I want to continue with the works, how does this end?

Can I recover the costs and interest?

Can I put a charge over his property?

Any help would be greatly appreciated.

Thanks in advance,


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11:36 AM, 16th January 2023, About A year ago

There are plenty of no win no fee solicitors who will take on the task of recovering the service charges. Make sure that your section 20 is spot on or the whole process will fail.

Employing a solicitor will cost 'Z' extra, so you might care to point this out before proceeding.

Simon F

11:54 AM, 16th January 2023, About A year ago

If you are in England/Wales: Check out Money Claim Online on website -- that's the starting point for County Court Small Claims Procedure. It costs very little. You can do everything with submission of documents. It prompts you for claim of interest and the fee as well as the principle sum. Sounds like you have All the documentation you need. Be sure to highlight the lack of response in consultation period as key to your argument. If your letters requesting settlement have not included a specific date and statement that you intend to commence county court action then you will need to send another letter (recorded delivery) first and give at least two weeks. When You get a CCJ in your favour, you need to allow another 30 days before you can request a charge against property or salary/wages.


12:50 PM, 16th January 2023, About A year ago

A short lease is not unmortgageable as the extension can be done at the same time. Some lenders have shorter thresholds. Z is in breach of his lease. But you should have followed due process to start with as without Section 20 he does not have to pay...

There are several options but your best advice would be to seek a specialist solicitor. Also read the leases carefully so you know what you can and can't do.

Freda Blogs

13:07 PM, 16th January 2023, About A year ago

If you've exhausted the money collection avenues, including adding interest to the outstanding debt according to what the lease allows, find out the mortgagee of Z's property and write to them. They will be unhappy that:
- Z is not complying with his lease terms (first ensure you are on safe ground legally with your demands, according to the terms of the lease and the legislation);
- allowing the property to fall into disrepair will diminish its value and possibly their security.

The mortgage co may then write and tell Z to pay up according to the terms of the lease. They may even pay the sums due and add to his loan.

Simon F

13:25 PM, 16th January 2023, About A year ago

The leases say the exterior needs repainting every 7 years, but what is the scope of the service charge? Z potentially may argue that payment of the service charge discharges their responsibility in that regard.

Judith Wordsworth

8:16 AM, 17th January 2023, About A year ago

A S20 should have sen5 to all 8n the first instance or after discussion a s20 opt out drafted and signed. Also usually 3 estimates must be obtained or job put out to tender.

Depending on how the leases are drafted, and possibly each could be different if there have been subsequent sales from the original lease, the freeholder might have to fund and then reclaim as per lease terms.

Failure for a leaseholder to pay their service / maintenance charge a S46 Notice could be issued, after discussion with any lender involved.

Tom Body

9:04 AM, 17th January 2023, About A year ago

hello all, thanks for your speedy responses, this is my first time posting on here so im super impressed with the platform and the response. thanks to all.

so, to answer some of your questions,

service charges are by means of communal cleaning, which take place on a bi-monthly basis,
this is a quick run down through the H/S/L and exterior and is roughly £50, with each lessee, including myself paying £10 each (in my case £30)

we have demonstrated leniency and allowed 'Z' to pay monthly for insurance, ground rent etc, however is never on time and regularly needs chasing.

back to the section,
I recently sent part 3 of the section, detailing the contractor we had chosen and also sent a cover letter which signed off broadly....
"we have received funds from 4/5 lessees, we will write to you further to detail when works will commence and arrangement to collect funds"

'Z' has replied, saying he wishes to speak With 'A' direct, as can't believe 'A' has agreed to this.
also claiming as 'Z' has the rear tenement, he's not affected by this...

'Z' wants a face to face meeting in a couple of weeks, where I am going to have deliver the bad news.
I feel this is going to be a battle.

ultimately dealing with someone who has bought an investment property, without understanding the obligations of the lease.

Tom Body

9:23 AM, 17th January 2023, About A year ago

Reply to the comment left by Puzzler at 16/01/2023 - 12:50
thanks for replying to this thread.

although the initial conversations and agreements were not formal, this was then formalised using the correct procedure.
does the initial verbal consultation go against me?

Simon F

10:54 AM, 17th January 2023, About A year ago

Take care with the face to face meeting -- Z may claim afterwards you agreed to everything they said. You are in your legal rights to secretly record any conversation you are a part of. Or you can make it plain that you will be recording the conversation.

Freda Blogs

11:10 AM, 17th January 2023, About A year ago

Reply to the comment left by Tom Body at 17/01/2023 - 09:04
It may be worth your investing in a solicitor's time to accompany you to the meeting - to address the matters raised and specifically the non performance of lease obligations by 'Z'; less of a reprimand but for 'training', so that he learns his responsibilities - otherwise you will have ongoing pain with him for years, and he's not worth the money, stress and time he will take from you.

This will also assist you with any 'misinterpretation' of the meeting, as suggested by Simon F.

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