I am a new leaseholder, having moved in December 2020. Six months after I moved in, we received a bill for major works that amount to £160,000.
I asked the freeholder before buying the flat, but they didn’t warn me of the extent of this work.
There are six flats in the building. Three owned by the freeholder and three by leaseholders. No work has ever been done since 1933.
I have just moved in and I have to pay, it seems so unfair.
The three leaseholders have decided to split the bill as it was too high. About £40,000 each. Now the first bill due soon is £20,500 each and additional charges if they occur. I would have never bought this property if I had known of the extent of the costs. CM
Buying a leasehold flat can present some unexpected surprises if you don’t do your research
MailOnline Property expert Myra Butterworth replies: Buying a leasehold can present some unexpected surprises if you don’t fully do your research before signing on the dotted line.
One of the issues with leasehold is that it is a complex and archaic system, parts of which are no longer fit for purpose in the modern world. Indeed, the Government is currently reviewing leasehold and writing new legislation in a bid to address some of its flaws.
It is important that you take on board and follow up on any advice given before a purchase, including in a survey that mentions upcoming works.
We speak to a legal expert about your options in this particular case and whether you are obliged to pay the money in full.
Stephen Gold, ex-judge and author, explains: Tenants who hold long leases have a knack of achieving a quick sale once they have a whiff of plans for major works to the building. It is imperative to make the fullest enquiries before agreeing to buy a lease about the landlord’s intentions to carry out repairs and improvements where you could be called on to contribute towards their cost.
Ask the landlord or their managing agent. Question the seller about what they know. You may find it prudent to have your conveyancer add to the standard written enquiries on the subject which the seller should answer.
Get hold of recent minutes of any residents’ association meetings. Chat to the other tenants.
Where you are suspicious or it appears that a heavy bill might eventually come your way, take up with a surveyor the likelihood of expensive works being necessary and how much the bill for them could be. Have a go at getting your seller to agree in the contract to reimburse you for the excess over a specific figure of any service charge demand you receive within a stated time after completion.
Our questioner covered some of this ground. She knew from the seller before agreeing to buy simply that ‘external decorations and repairs’ were expected, and she took comfort in the fact that he had paid £2,700 into a reserve fund towards his contribution. If that information had been false and she had relied on it, then she would have had a claim for compensation against the seller for misrepresentation.
The wording of the lease should be closely scrutinised if you are considering buying a flat
But she knew much, much more and so could not have relied on what the seller had said. In particular, she knew from her surveyor that the balconies and flat roof were due for attention, and this has proved to be correct and expensive.
Repairs and redecoration to her flat’s balcony were flagged up in the survey report and a note of her conversation with the surveyor referred to ‘replacement’ and ‘really expensive’. In relation to the roof, the report stated that ongoing repairs were expected and that emergency repairs might be necessary.
It follows that she went into the purchase with her eyes open. Had she wanted to put a price on the likely cost of what was required then she would have needed to get an estimate from the author of the report she had obtained or, better still, consult a building surveyor.
Stephen Gold is a retired judge and author
Where a surveyor is negligent in failing to draw attention to defects and they are relied on then they may well be liable for compensation, whether they have been instructed by the buyer’s prospective mortgage lender or directly by the buyer.
Even the seller’s estate agent who misrepresents to the buyer factual matters about a property which are relied on may incur liability for the seller on the basis that the sins of the agent become the sins of the seller.
However, I do not consider that there was any negligence here by the surveyor. Also, although the estate agent gave certain information to the questioner about the roof, I am not satisfied that she could show this was false. Where a surveyor or estate agent have gone wrong, they may still escape liability if they can show that the buyer would have proceeded with the purchase and at the same price, regardless of what they told them.
Our questioner feels let down because the landlord failed to tell her before she agreed to buy what works might be planned. She found out about them around six months later. But she had her surveyor’s information which could have been expanded and costed. I do not consider that the law can provide her with any redress against the landlord.
The wording of the lease should be closely scrutinised. If it does not impose an obligation on the tenants to pay for some of the works then there would be no legal obligation to contribute towards them.
It is said that no works to the building had been carried out for some 33 years and the questioner is critical of the landlord’s neglect.
It may well be arguable that this neglect has increased the extent of the deterioration to the building and so raised the cost of the works and that this should be reflected in what the tenants have to pay. A tribunal challenge to the level of the service charge contributions could be made to the First-Tier Property Chamber (Residential Property).
Stephen Gold is an ex-judge and author of ‘The Return of Breaking Law’ published by Bath Publishing. For more on service charges, go to breakinglaw.co.uk