Leasehold, flat new roof £32,000, have to pay in advance

I know this is not helpful but £32,000 sounds like the total for the roof. Why should you pay for it all. That is rediculous.

I think I would get a second opinion if you can.

If it's like my mother's apartment they don't get to choose who does the work there told who they are getting cowboys like the last company

The Leasehold Advice Centre will offer advice for free, it is on the net, just search. There is also a free call from a solicitor available.

Aveline

In our block we pay upfront for the the same reasons your management fund gives you. My DH is chairman of the residents committee in charge of organising work currently needing done. It's not a scam. They just have to have the money to hand to pay the contractors. We really don't want to delay the work if the contractors walk off the site if they're concerned at non payment.

The Freeholder should have a Sinking Fund in place. I would write to my MP

Oldcareassistant. one of 48 we all paid about £1000 each

MrsMatt. Is that £32k each? How many flats are there

Half the building is leased to Costa and other half are for leaseholders of which I am one. 32 X 8 = 256,000 which is a cheaper roof but fewer leaseholders to carry the cost

RVK1CR
Thank you

shoppinggirl. shafted by the management
I wish you could give the names of the directors to find out if they have set up the company I am having to deal with.

Be careful too many cowboys out there it’s a lot of money for a roof. It’s not that long I had mine done half the cost I’m freehold so different terms . Hope everything goes well

The last roof repair needed for a flat my son lives in was over £1 million! That was 10+ years ago. The factoring company was brilliant and got a huge grant as it was a historic building. Flat owners paid in proportion based on the size of their flats. The buildings insurance also paid 6 months hotel bills for my son while the work was being done.

PoliticsNerd

Like others, I thought there had to be a sink/sinking fund, so I looked it up. They say every day's a school day and I found that, in UK law, there is no general requirement for all freeholders to create a sinking fund (also known as a reserve fund) for their properties. However, as I expect many are aware, establishing a sinking fund can be common practice especially in residential blocks of flats, where it is used to cover future maintenance and repair costs.

Leaseholds are a minefield - that is definitely the case - and sadly, the work in Parliament seems to have slowed, quite possibly because of that very complexity.

I viewed a flat as an investment a few years ago. Fortunately I had a lovely solicitor who read the lease in detail, not all solicitors do. It all depends on how much you’re paying them.
Re the flat I was going to buy. My dear solicitor said dont touch it for the very reason the op is having.
Another ploy lease holders can use ( it’s in the lease) is that you must insure through them.
My partner became an expert on reading leases after these 2 incidents 😉

A sinking fund is not a legal necessity, but it makes sense to spread the cost of future large bills relatively painlessly for the residents. It can mean, of course, that a resident pays into the fund over the time they are there and the money is not needed during that time - in which case it should enhance the value of the property on sale.

The principle is also used by local authorities, who, unlike most organisations (companies, for example) have no requirement to charge Depreciation on their fixed assets (buildings, machinery etc) and therefore don't, with the result that when an asset needs major repair or replacement there is no money to pay for it. This happened two years ago with our local Town Council who own the Town Hall. The central heating system failed (it was a thousand years old) and as yet they haven't found the money to replace it, so users of the hall (of which there are many, on a regular basis) sit in their coats and scarves with a couple of electric heaters that barely take the chill off. Of course in the "good old days" the council simply applied to central government for the money - and got it! Surprise, surprise, that doesn't happen any more.

Of course, the amount in the sinking fund may still fall short of the actual cost of the roof replacement but at least it would help.

I would want to know the company they are using. I would want to see the actual quote and I would also want to know how much they require upfront. How many of you are actually needed to pay this bill? How big is the roof? Especially a flat roof That seems an astronomical amount of money just the £32,000 never mind everybody else’s too!

The quotes should be issued by email to every member that shouldn’t be a big issue.surely

As it is a grade 11 building are there any grants you know of for flats?

Any grant would be for the building regardless of the sub-division into flats. You could try Historic England and the local authority but I doubt the latter has much spare cash.

My mother and the other apartments have employed a surveyor and he has been in the roof space and said it's as dry as a bone the leaking is coming from the windows not the roof like the management company was trying to make them pay for.my mother also did some digging and found out they apparently sold the company to another management company some time ago it's the same company just different name these companies need watching they think because people are getting on they can have them off watch them

People writing here about the need of a 'Sinking Fund' makes it seem as if that just 'magics' itself into being.

Sinking or Reserve funds have to be built up, slowly, from the annual Maintenance charges, which are levied on all the flats.

At present all costs of running a large building are rising very fast, including things like Insurance as well all the legislative checks, and all building and decorating work.

This means that increase in annual maintenance charge has to cover all these extra costs. In order to increase the amount put aside for the sinking fund has to come out of this, which means even more of an increase. And all such increases have to fought through AGM's

Agreed. We just call it a reserve fund. The rate is set by the residents committee and voted on at our AGM.

Franbern, give people some credit. Everyone knows that the money has to come from somewhere and does not appear as if by magic

It probably worth making people looking for retirement flats aware that:

"Some leases (common in retirement properties) provide for a contribution into the reserve fund out of sale proceeds whenever the lease is sold. This is typically a percentage of the sale price or a percentage of any increase in value since purchase. These leases are designed to keep the monthly (or annual) service charge costs at a more affordable level by deferring the reserve fund contributions until the leaseholder has received a capital receipt out of which a one-off contribution can be made."

Although, as has been said, a solicitors should make the terms of the Leasehold very clear.

What happens if some people don’t have a handy £32k in their bank or any means of getting a loan?

They would default on their obligations under their lease to contribute their share of the cost of repairing the roof and the landlord could forfeit their lease.

Oopsadaisy1
Fortunately, I had been saving for the refurbishment of my flat although I don’t have it all. But I don’t believe that is the case for the other leaseholders. I have told a bewildered young neighbour to ask advice from CABueau.

In France it is the law that there is a ‘sink fund’ of X per cent per year, paid into an account. When an owner sells a property they are refunded what they have paid in.
When a property is being sold, the buyer, by law, has to have copies of all the correspondence dealing with the building’s meetings of the last 5 years (I believe).. This should show any pending problems.

The landlord/management company could try to borrow the money and the owners of the leases would then have to repay the loan including interest.

Barleyfields

They would default on their obligations under their lease to contribute their share of the cost of repairing the roof and the landlord could forfeit their lease.

And, as I understand it (but would love to be wrong), this means the flat is sold and the landlord can take all it sells for if they choose to do so, whatever is owed. That is certainly an area of leasehold that need sorting out.

It is the last resort where the owner of a lease consistently defaults. It requires the sanction of the court but is a powerful threat. One has to think of the interests of all other flat owners if one refuses to comply with the terms of their lease. I don’t agree that it needs ‘sorting out’.

It is down in writing PN.

That if a leaseholder defaults on any outstanding charges, that charge plus the accrued compound interest, which is usually basic bank interest plus a % above, is removed in total from the amount paid to a leasehold seller. Statements are sent annually, showing any accrued debt as well as current amount for management charge. The leaseholder signs up to all the articles when buying a property

The solicitor for the seller does that, not the freeholder. I used to get a letter from the sellers solicitor asking if there was any unpaid debt wrt management charges