|
|
Question Title: Commonhold and Leasehold Reform Act 2002
| Question: 442 |
| I manage a flat in a seaside block that is used during the summer as a holiday let and then as a six month AST over the winter. I pay, on behalf of the landlord, a monthly standing order towards the collective block maintenance. It's in a purpose built block of 12 properties and the head lease requires that the exterior is repainted every 5 years. Neither I nor the landlord has any problem with this and the management committee, which is made up of other occupants of the block, is fairly efficient in organising these management issues. I have now received a letter from one of the other occupants stating that the repainting constitutes a breach of the requirements of the Commonhold and Leasehold Reform Act 2002 and that he does not have to contribute towards what he is claiming are "illegal charges". Could this be the case?
|
| Answer: |
Regrettably he might be correct. Whilst the Commonhold and Leasehold Reform Act 2002 was intended to deal, amongst other things, with unfair and excessive maintenance and management charges from independent management companies its practical impact will hit many others.
The Act has introduced new requirements for this statutory consultation. Section 151 of the Act replaces the original provision, Section 20 of the Landlord and Tenant Act 1985, and introduces a new Section 20ZA, all with effect from 31st October 2003. The new provisions introduce different, more complicated procedures and extend the consultation requirements to include long-term contracts for services.
There are new requirements for the landlord to state why he considers the works or the agreement to be necessary and for further statements setting out his response to observations received and his reasons for selection of the successful contractor. Consultation notices must be sent both to individual leaseholders who have a right to nominate an alternative contractor and the landlord is bound to invite an estimate from such nominees. The new procedures provide for two separate 30-day periods for leaseholders to make observations and landlords would be prudent to allow a minimum of three to four months for the whole process.
While the principal purpose of the consultation process is to seek the leaseholders' views on the landlord's proposals, the effect of the provisions is to limit the landlord's ability to recover if they do not comply. If the landlord fails to carry out the full consultation procedures in the correct manner, they are not able to collect or recover service charges above the level of the statutory minimum amounts - £100 per lease- holder per year in respect of a long-term contract, or £250 per leaseholder for works to the building. These amounts are not large, for this block of 12 flats the total amount would only be £3,000 for maintenance. The landlord will have to cover the loss himself; the consequences could be disastrous, potentially rendering the company insolvent and unable to continue to fulfil its obligations to leaseholders.
|
|
References:
|
Pages:
|
Hyperlinks:
|
|
Letting Factsheet No 35 |
|
factsheet-35
|
For more information, discuss on the Forum
|
|
