Service charge – Who is liable?

by Readers Question

8:42 AM, 14th October 2020
About A week ago

Service charge – Who is liable?

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Service charge – Who is liable?

Hello all, I hope someone can help. I own 3 apartments in a block, the only apartments in that block with our own entrance. We do not own the entrance/hallway the freeholder/landlord does. The landlord owns the building and on the ground floor an estate agency with its own entrance.

We are trying to allocate who is legally responsible for the hallway area. It’s not in any contract. It’s quite important as it will impact service charge percentage contributions.

The Freeholder says I must be responsible as only I use it, but I say it’s in the freeholder’s ownership, not mine, hence he should be liable.

Does anyone have a constructive opinion on this?

Thanks for any assistance.

Paul


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Comments

Derek t

11:00 AM, 14th October 2020
About 7 days ago

The floor plans on the leases and freehold should tell you but I would say the communal parts are freeholders responsibility.

Ian R

11:04 AM, 14th October 2020
About 7 days ago

Paul, refer to the terms of the lease as it should be set out within that vip document. Your question suggests your apartments have exclusive use of this entrance/hallway, so why wouldn’t you contribute to the insurance and upkeep of this area? Even if it’s not your access point, your lease should refer to the apportionment of services charge costs. Your lease may refer to an alternative dispute resolution process e.g. referring a point of disagreement to an independently appointed surveyor/solicitor for their binding opinion. However that route or the FTT may actually cost you much more than many years of contributions.

graham.bowcock@oakwoodvaluations.co.uk

11:23 AM, 14th October 2020
About 7 days ago

If the lease is silent o share of costs, the ultimate responsibility will rest with the freeholder (who it seems is defined in this matter). As to percentage of costs, if you are the only user then it seems that you may end up bearing 100% of the costs.

When I have encountered similar situations and the lease is silent we have generally reviewed usage to try and get to the correct answer.

Is there any reason why you think nyou would pay less than all of the costs for an access that only serves your properties?

Freda Blogs

11:35 AM, 14th October 2020
About 7 days ago

The demises, access and service charge information should all be contained in your lease and/or others. If the relevant information is not in any of the leases, you may need to do a deed of rectification, but in my view it’s for the freeholder to demonstrate to you that you have the liability for it. He has visibility of all of the interests in the property, whereas you do not (although other lease information can be obtained from the land registry should you choose to do so). Depending on the building and the lease set up, service charge schedules can be very simple or very complicated and we don’t know the specifics of this particular building, so it is hard to comment further.

That said, on a pragmatic note, if it is just your three properties that have access from the hallway, personally I would be inclined to consider accepting responsibility for cleaning and perhaps repairing that area (but not insuring - to remain part of the FH’s policy) so that you can ensure it presents well.

Gracie

11:48 AM, 14th October 2020
About 7 days ago

Even if it is his responsibility I'd jump at the chance for him to have nothing to do with it. Anything he does will only be charged back to you anyway, because as a leaseholder you're liable for common areas upkeep & repair cost, along with any additional markups / commissions / "managing fees" % for the job, by him and/or his fleecing managing agents. Get it in writing that he has no interest in upkeeping the area & gives you full autonomy, anything you do will then be your choice and your price. Bonus that it's only for your flat's use.

Seething Landlord

11:59 AM, 14th October 2020
About 7 days ago

In my limited experience the lease always carefully defines your demise so if it does not include the disputed area and is silent on the the question of its maintenance my view would be that it is the responsibility of the freeholder. Apportionment of maintenance costs should also be defined precisely in the lease.
We had a similar situation a few years ago go when the Juliet balconies to apartments on the first and second floors of a block where we own just one ground floor apartment needed to be replaced. Careful reading of the lease made it clear that the owners of the ground floor apartments needed to contribute their share of the cost even though they derived no benefit from the work.

TrevL

13:25 PM, 14th October 2020
About 7 days ago

Should be on the lease or land registry extract..... but if the apartments are the only users of the hallway, who else would be paying?

Don't confuse ownership with service charge liability, the freeholder owns the whole building but does not pay service charges to himself.....only leaseholders pay service charges.

TrevL

13:33 PM, 14th October 2020
About 7 days ago

If there is no lease agreement, your solicitor should have highlighted this when you bought the apartments (I would have run a mile)....otherwise you probably have a legal argument on your hands and legal advice should be sought, there may be legal guidelines but it might be an expensive process to go through.

Derek t

14:04 PM, 14th October 2020
About 7 days ago

If the free holder is also a leaseholder for the shop he will have to contribute to the service charge fund subject to the lease terms
Also you don’t say how many units are in the block as if there are others they will have to contribute to the stair well up keep as you will to the rest of the block. Be aware that the stairwell should have a fire risk and a health and safety assessment carried out annually so someone needs to be responsible for that and the maintenance and servicing of the fire Alarm system

sam

5:08 AM, 16th October 2020
About 5 days ago

If your lease docs is silent on this issue, does your freeholder's insistence mean
1. The owners of the 3 flats wud still b responsible exclusively if they r 3 separate entities?
2. The owners of the other flats who use the other entrance(s) exclusively r responsible exclusively for their entrance ie that u r not?


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