Management agents bill for external works

by Readers Question

13:47 PM, 26th March 2014
About 7 years ago

Management agents bill for external works

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Management agents bill for external works

I own a leasehold flat which is on the ground floor of a converted Victorian terrace. Management agents bill for external works

The managing agents have sent me an invoice for 50% of the £30,000 bill for external works and redecorations.

What powers do they have if I do not agree this level of works are required.

Thanks

Wavenie


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Mike W

14:04 PM, 26th March 2014
About 7 years ago

Contact the leasehold advisory service - government run, free advice, excellent service. Google it for contact info.

Gary Nock

14:04 PM, 26th March 2014
About 7 years ago

Hi Wavenie,

This appears extremely excessive. I was not aware that any of the Royal Palaces were terraces!!

In a nutshell as the works are over £250 per flat in any one service charge year they have to carry out a Section 20 Consultation process for tenders for the works etc. If they have not done this, then except in the cases of dire emergency then they cannot recover the service charge. You can also go to a First Tier Tribunal to ask them to determine the amount of the service charge etc. Go to the lease advice website at http://www.lease-advice.org and work your way through the FAQs.

Regards,

Gary

Annette Stone

19:09 PM, 26th March 2014
About 7 years ago

with all due respect to the respondents to the questioner they have not actually answered the question and to be fair, the question is really vague. The question is what does the questioner do IF they do not agree the level of works are required.

with 25 year experience as a managing agent can I point out a few things in an effort to assist:

1. The questioner does not tell us how many flats are in the building although she says her bill is for 50% of the costs. She does not tell us if the lessees own the freehold, if there is any outside freeholder and if there is, what his role is in all of this. It could also be that one of the other flats is owned by the freeholder. All these variables make a difference. We also do not know if there is a reserve fund, how long the work has been needed and what steps have been taken to prepare the lessees for the expense.

2. We do not know what work is required although external work and redecoration are mentioned. Where a new roof and full refurbishment was needed, it may very well be that the cost could reach £60,000 including surveyor's costs, managing agents fees, cdm supervision and VAT so perhaps we should not all be so quick to condemn the costs.

3. That having been said every lessee has rights and best practise as well as statute indicates:

a. Every lessee should receive an initial letter advising them that a refurbishment is due and giving a very brief outline of the work to be done and a copy of their rights and obligations.

The professional fees should be set out clearly and details of the surveyor who will be preparing the specification for tender should be identified as should the costs for inspecting the building and preparing the draft specification.

Here I would add that although not a legal requirement I think any managing agent who embarked on a major refurbishment without the benefit of an independent chartered surveyor would be acting in a foolhardy manner. If a matter did reach Tribunal the surveyor's opinion as to the condition of the building would carry weight and he would also be putting his Professional Indemnity into play and most surveyors would not risk this.

b. When the draft specification is sent to the lessees it should be accompanied by a Notice of Intention to Carry Out Work which offers lessees the opportunity of nominating contractors to carry out work and to comment on the extent of the proposed work. There is a 30 day period for consultation and the closing date should be clearly noted on the Notice

c. At the end of the consultation period the surveyor should be notified of all comments and nominated contractors. The contractors should be included in the tender process if their qualifications and insurances are all correct and the surveyor must take notice of any comments although he is not bound by them if they are not correct and not to the benefit of the building as a whole

d. The surveyor then puts the work out to tender and when the prices are received each lessee should receive a Statement of Estimates, a full copy of the winning tender document and the priced tender pages of the other contractors.

e. The lessees then have a further 30 day period to comment on the costs at which time if no valid comments are received the invoices can be sent out and the work will commence once the funds are in.

In practise unless you have a rogue managing agent lessees are protected at each stage of the refurbishment process and the questioner does not indicate whether or not any queries were raised prior to the invoice being received.

In the event that lessees do not feel the statutory consultation process has not been fully completed they can make an application to the First Tribunal who will hear the case, may wish to visit the building and will certainly hear evidence from any surveyor. Unless any work can be considered an emergency no funds in excess of £250 can be collected from the lessees without very good reason although recent case law does make more exceptions to this rule than previously.

I hope this sets out the rights and obligations of the managing agent and enables the questioner to move forward.

The final point I would make is that it may be that the work does need doing and in that case the lessee is bound by the lease to contribute to protect the fabric of the building.

Hope this is helpful

Mark Alexander

21:12 PM, 26th March 2014
About 7 years ago

Reply to the comment left by "Annette Stone" at "26/03/2014 - 19:09":

As we have come to expect from you Annette, that's an incredibly professional and comprehensive response 🙂
.

Gary Nock

21:50 PM, 26th March 2014
About 7 years ago

Whilst I appreciate that the answer given to the question is in general terms, it is in response to a question that is vague. The more detailed a question, the more detailed the response. The less so, then so is the response. It is one of the strengths of Property 118 that the contributors all give of their opinions freely, and in most cases altruistically with no reciprocal expectations. Replies have to be taken in that context..

Annette Stone

22:16 PM, 26th March 2014
About 7 years ago

Gary. My point was to make the point that before anyone answers even in general terms if we are answering as a professional then we should perhaps make sure we have enough information to give advice which is actually helpful otherwise we just give ammunition to those who wish to landlord or managing agent "bash" irrespective of the facts. This is what happened on a recent thread on 118

I completely take your point about information being given altruistically which is what many of us do on our specialist areas . For my part I cannot get involved in giving anything other than general advice to anyone with an ongoing issue unless they are a client and I am working on a professional basis because my Professional Indemnity insurance does not cover me to do so. I hope you can accept that. And also accept that before I give advice it is best to try and find out exactly what the question is.

I am a little wary of advising people to dash off to Tribunal. I know you have had some success there but I think that when lessees are advised to make an application before they are certain that they have a good case, can be misleading. Lessees often believe Tribunal exists solely to ratify their complaints when in fact it is extremely even handed and the Tribunals are made up of very experienced people

Hope that reassures you.

Graeme

9:01 AM, 28th March 2014
About 7 years ago

Gary,

All good advice given above.
The alarm bells for me though are this:- You say it is a Victorian terrace.. How big is it??
£30,000 is a HUGE sum for external repairs etc. for a terraced house. For that I assume it will be having a complete new roof, repointing and more. Are their expensive structural issues being addressed - such as subsidence? If yes, then this might be subject to an insurance claim.???
I have 2 small mid-terraced houses in Lancashire. One is about to have a complete new roof. Total cost is £2250 including 10 year warranty --- a long way to go before hitting anywhere near £30K.
Good luck
Graeme.

Gary Nock

9:37 AM, 28th March 2014
About 7 years ago

Hi Graeme,

Wavenie does not say how big but as you say it must be one hell of a roof!

I suppose it could be Grade 2 listed which is why the repair cost is so high?

Sambhabana Roy

10:31 AM, 28th March 2014
About 7 years ago

No power at all..that is up to you whether you agree or not. It would be better if you contact the leasehold advisory board. They can give the exact details or call Goodwill Coordinators for better results.


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