Maintenance Charges on Flats
By Ian Cox
Owners of leasehold flats usually pay to their freeholder/landlord a maintenance charge in addition to any ground rent set out in the lease.
Very often the freeholder contracts the management of the development to a company who will ensure that the landlords obligations contained in the relevant lease are fulfilled.
Generally this will include the repair and maintenance of the structural parts of the block in which the flat is situated as well as the insurance premium and taking action against other owners who fail to abide by the terms of the lease.
The management company then recovers the cost of the works carried out from the individual owners. Accounts have to be prepared and if major works are proposed all the owners have to be consulted on the estimates obtained.
In theory the system should work well but many owners complain of too little maintenance for the charges paid or too much interference with the everyday running of the block and the high charges which result therefrom.
Owners should know that they can take over the management of the block themselves under a procedure known as "The Right to Manage".
At least half the owners in a block would have to form a Right to Manage (RTM) company of which all the lessees must be given an opportunity to become members. The RTM company must serve a notice of claim on the landlord who is obliged to hand over the management on the date specified. The landlord is also entitled to become a member of the company but obviously in a large block he would have little influence. All the landlords' management rights and obligations transfer to the company except that of collecting the ground rent. The owners would then be able to decide which company they wanted to instruct to manage the block or they could deal with it themselves.
The procedure is complex and should not be attempted without the advice of a Solicitor. There is a helpful guide on the Leasehold Advisory Service Website
If the owners do not wish to take over its management they can still challenge current maintenance charges by making an application to the Leasehold Valuation Tribunal on the grounds that the amount is excessive in the light of any poor service provided.