RTM Settlers Court Nightmare decision for leaseholders?

RTM Settlers Court Nightmare decision for leaseholders?

10:29 AM, 6th December 2022, About A year ago 26

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The Settlers Court supreme court judgement is we believe totally unfair and unreasonable. This decision enables RTM (Right to Manage) companies to only manage their building and not any common parts i.e. gardens etc.

This takes away a key reason for RTM to manage their building and surrounding areas some of which may not be appurtenant but generally used by the RTM property.

We are two blocks of flats one RTM and the other managed. The managing agent has now sent service charge demands (400%) over previous charges to the RTM company without consultation or agreement and with no breakdown of what they are – with an upfront payment demand?

This is unfair and unreasonable if anyone has any knowledge to bear on this or any details of tribunals challenging Settlers Court that would be good. We understand that the Leasehold Reform Act may change this!

What is needed are invoices with breakdowns for actual works to the fabric of the common parts!


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Laura Delow

13:01 PM, 6th December 2022, About A year ago

Wasn't this because the problem with this appeal is your building forms part of a larger estate containing other blocks or houses together with facilities/amenities which are managed by a common landlord or other third party at the collective expense of the leaseholders of "all" the properties in the estate, which are not exclusively used by the leaseholders of flats in your building?

eagle view

14:23 PM, 6th December 2022, About A year ago

My understanding is that you can only manage your own block and not the whole estate. If the landlord manages the rest of the estate, they are entitled to charge you for the facilities you use that are outside of your building. For this reason, the judgement is fair and reasonable. The leaseholders of the right to manage company are also entitled to receive a breakdown of their estate charges, but this is not what was appealed for.


16:27 PM, 6th December 2022, About A year ago

If RTM is not working for you - you should use Right to Enfranchise and buy the freehold. Then your destiny will be in your hands - and the appurtenant land.

But even where you have RTM, the Landlord of the appurtenant land (via their managing agent) still has to abide by Landlord & Tenant law ... including "reasonable" service charges.

I suggest you query the 400% increase - ascertain the facts - and then apply to the First-tier Tribunal if appropriate.

Jill Lucas

13:27 PM, 7th December 2022, About A year ago

Reply to the comment left by Laura Delow at 06/12/2022 - 13:01
Yes but every situation is different and this takes away RTM right to manage and puts the control into the hands of freeholders and managing agents who will use this as an opportunity to charge high fees. This has happened in our case whereby we manage our block and have an area of garden which is our responsibility and logged with the land registry. We are now receiving ridiculous service charge demands with no detail/justification which bear no relationship to any exterior common parts work. Every RTM has a different agreement and bears no relationship to our RTM. This is now in the hands of solicitors which will I am sure be the case in other situations too

Jill Lucas

13:36 PM, 7th December 2022, About A year ago

Reply to the comment left by eagle view at 06/12/2022 - 14:23
We need to clarify 'estate' in our case it's two blocks of flats a block of 4 units and a block of 10 units with a steep garden and a terrace. The lease is the bible and all leaseholders (14) have an obligation for maintenance/remedial work to the exterior - i.e.common parts this has never changed even with the Settlers Court judgement. Our RTM included an area of responsibility registered at the land registry. Now the managing agents are charging over the top fees to manage over and above our costs which is unreasonable to leaseholders and smacks of opportunism plus invoices are sent without detail and they do not communicate or consult. This has to change and am sure that this will be raised with new legislation in the leasehold reform act going forward

Jill Lucas

13:44 PM, 7th December 2022, About A year ago

RTM is working for us and we already own and manage other blocks with no issues whatsoever! We own a share in the freehold. We are constantly challenging the managing agent who do not respond communicate or provide detail on recent invoices since the Settlers Court. judgement. Settlers Court has not changed leaseholders responsibilities re the lease and they are obliged under RTM legislation to consult and agree costs and also they cannot charge leaseholders direct! We would like to hear from others who have this issue! Especially receiving invoices with no consultation or justification.

eagle view

13:52 PM, 7th December 2022, About A year ago

Reply to the comment left by Jill Lucas at 07/12/2022 - 13:36
Please keep in mind that the RTM company will only have the authority to manage its own block of flats. "Own building" means from the entrance of the main building to the roof of their building. Your landlord is entitled to charge for any other service they provide to your estate, such as security and upkeep of the estate. If their charges are not market value, then you can challenge them by proving other quotes.

Jill Lucas

15:35 PM, 7th December 2022, About A year ago

Reply to the comment left by eagle view at 07/12/2022 - 13:52
We fully understand the changes. However we dont have a large estate to be managed. Settlers Court comprised 800 units with walkways, gardens etc. We are 14 flats with a garden and steps to a bin store. No relationship to Settlers Court. Yet the managing agents appears to think he manages Wembley with excessive Charges with no consultation or justification. We manage other properties with no issues. This judgement has given managing agents a licence to overcharge! Charges should relate to actual work! no fantasy charges.

Mervin SX

10:34 AM, 10th December 2022, About A year ago

I think the Supreme Court's decision on this matter has given a much needed clarity regarding communal space outside of a building that has undergone RTM and which is not classed as appurtenant property.

If the Freeholder's agents continue to charge higher than expected fees to manage these spaces, then, as a fee-paying leaseholder, you have the right to ask for a breakdown, see the invoices (Section 22) and in the worst case scenario, take the matter to the FTT to challenge these costs.

If the landlord or their agents fails to provide a breakdown or provision to inspect their invoices within the time limits, without a reasonable excuse, they will be committing an offence, which is punishable by a fine.

Have you tried any of this?

Jill Lucas

11:19 AM, 10th December 2022, About A year ago

Reply to the comment left by Mervin SX at 10/12/2022 - 10:34
Thank you for your response. Our beef is that we already have an agreed area of responsibility with no issues for the past few years. There are no other common parts that require works. We are not 800 flats but 14 flats in two blocks. We are already in a legal battle on this and are ready to go to FTT. Our RTM predates Settlers Court. There are lots of others in similar situations. Settlers Court was a different ball game as they had not agreed areas of responsibility prior to completion of their RTM. This is why the judgement is wrong. As in all situations areas of responsibility should be agreed during the RTM process then there would be no cross over issues!

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