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Service charges need a look at next. If you live in a flat with loads of other flats next to you, I get being charged to look after the grounds/building, but service charges shouldn't even come into it when it comes to new build houses. The local councils should adopt the land as soon as building has finished, especially as they charge council tax the second you move in.
My family are actually trying to sell a flat which is how I found out about this.. It turns out that there is a clause in the lease that says the ground rent doubles every 20 years.. Which sorta sounds reasonable until you actually work it out.
So its currently £250 a year which is normal. But theres almost 120 years left on the lease.. Which means by the end of the lease the ground rent will be £16000 a year. Which is bonkers right. So the buyers solicitor has said that she shouldnt sign it. And our own solicitor said she would have advised the same thing.. We have asked the freeholder if they will remove it, they wont... So our only way out is if we extend the lease. Which the freehold management company said they refused.
Such a pain. And its all from a lease that dates back to something like 1964....
Let alone the service charges which are about £1200 a year for a company who seem to do nothing.. We recently needed some work doing to a property and it turns out that the freehold managers have now given the work out to a third party company to manage who want 10% of the cost of the project on top of what we will already have to pay just for sending a few emails out and making a couple of calls.. Its all such a rip off and I am totally sick of these fucks...
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Under a Tyneside flat scheme, each flat tenant even if holding the freehold of their own flat, is made the landlord (and thus reciprocally the tenant) of the other. This allows the responsibilities to be enforced legally, without requiring the existence of an external landlord or management committee over the whole building. A peppercorn was the arranged lease arrangement between properties.
Essentially, a reciprocal mutual consideration situation.
Edit: Bugger, this was clipped when I posted.
I was simply suggesting that there are & have been many good means of avoiding leasehold exploitation.
It was developed about 35 years ago and is a very pleasant place to live. One minute walk to the pub!!
The freehold is owned by one of the largest housing associations in the UK and we pay a monthly service charge to them. The only thing we are responsible for is the internal maintenance of our own properties. The service charge covers the lot, insurance, grounds, plumbing, wiring etc.
A month ago the association told us they wanted to sell the freehold and offered it to us for a nominal £1-00!!
As a group of residents we have decided, after taking legal advice, to cough up the required quid and go ahead with the purchase.
We will have to form a company in which each property has a twentieth share in the freehold or common hold and also appoint a managing agent as we are all in our seventies and more and we came here get away from responsibilities.
The alternative is for the housing association to sell on the open market and we could end up with a shower such as Rabs describes.
I think the bottom line is that we were costing them too much to run.
We have along way to go but at least we'll be our own masters.
Roger.
Before that I used to live on a big development with 330 properties - 30 houses and 300 flats in several blocks. Every property paid the service charge for the common areas and each block of flats had an individual service charge on top just for their block. The freeholder (all of us - the management company) was the landlord for the leasehold flats and had a managing agent doing the day-to-day work. It was expensive and they rarely made decisions without involving the unpaid directors anyway.
Assuming the 6 flats are in one block, I'd suggest one of the directors was a leaseholder who looked after the interest of the block and could liaise with their fellow block residents to establish their own priorities (and therefore how much they would need to collect and spend on looking after their own block).
Good luck! :-)
Its invaluable for us to compare our situation with people such as you.
At the moment we have accepted the offer but are not an 'official' body yet. We have appointed a 6 person steering committee and are interviewing potential managing agents and getting insurance quotes.
The next step is to put the legal representation in place and proceed with the sale.
We will have a large sinking fund coming to us, in excess of £100,000, so that will need to be invested carefully.
The flats are one block of 4 and one block of 2 and our solicitor recommends that because we are relatively small we treat them as commonhold with each flat having one twentieth of the freehold.
Obviously we have a long way to go and a myriad of things to consider, but once we have taken the first steps it will all fall into place.
Thanks for your good wishes.
Roger.
The £4.50 ground rent was payable in 6-month instalments, I used to send 'em a cheque in the post for £2.25 twice a year just to be awkward.
I think Michael Gove was heading up the inquiry into getting this lot sorted out but he's been stymied for whatever reason.
I presume you could still set an extra service charge on a per block basis to reflect their differing running costs if you wanted to.
We are all owner occupiers and I am sure we wouldn't look favourably on buy-to let or sub-letting.
We still have to look at the level of service charge but no doubt we'll take that into consideration.
Roger.