Page 14 | AIBU to be absolutely devastated by this?

Haveyouseenthischicken · 2024-11-16T00:16:35+00:00

Posting here for traffic and because I am desperate for someone to talk me down off the ledge! We own a flat in an expensive part of England. We paid £275k for it back in 2020, it came with a £1900 annual management fee. We thought ah, not so bad, it’s a city centre flat in a new development. In 4 years it’s gone up to £3600. The services received are crap. Over £50k for ‘gardeners’ who come once a year to mow the communal lawn. Cleaners who clock in on the sheet then leave 10 minutes later having done nothing. A scummy company basically, con artists and of course they’re totally unregulated. We were unluckily caught up in the cladding scandal, and the whole saga of having this rectified took nearly 4 years in total. We moved out over 2 years ago and relocated for career changes, and have been living in a tiny 1 bedroom flat ever since. We couldn’t sell due to the lack of fire safety so have had to rent. We got the fire safety certificate and thought great, now we can sell our flat and move on with our lives! Now we can start trying for a baby (I’m 31, time isn’t on my side). The flat has been on the market for 6 weeks and not a single viewing or enquiry. We’ve already priced it 25k below market value. Our agent believes it’s the high service charge putting people off. After 2 years of hell waiting for the certificate and constant pushbacks by the housing developer for non existent reasons, we’ve today been told that our 2025 service charge will be between £7-9k PER FLAT to cover the cost of a new building safety report for all buildings over 18m high. There’s no guarantee this is a one off payment either. If people don’t want to buy with a £3600 service charge, they aren’t going to touch a flat with a £7-9k service charge. I am absolutely devastated and have been crying since we found out. We thought this hell was over. Our lives have been stalled for over 2 years already. We can’t afford this charge. We are looking at a potential £700+ addition on top of our mortgage. We have tenants in at the moment but their rent only covers the mortgage and the service charge. We never have and never will make any profit off the flat, we rented it out of desperation and because we needed to relocate. We are now looking at selling it at auction with a reserve price of £230k. We have an £80k deposit in this property and £180k left on the mortgage, so we would be selling at a major loss but at this point it seems the best option. We’ve even stooped to contacting those house buying companies. I know it sounds dramatic but it genuinely feels like our life is over. We are just normal people with normal salaries. This will financially ruin us 😭

LilySLE · 20/11/2024 06:52

GranPepper · 19/11/2024 23:56

And in plain English?
Taking into account the OP is an owner not a landlord or tenant, from what I understand

Show quote history

That response took me a considerable time to write. I was trying to be helpful (I thought that’s what Mumsnet was for?). Next time I won’t bother.

The OP has clearly already done some research about this, and on the basis of the information in my post I was aiming to give her the tools to enable her to do more and hopefully get her where she needs to be more quickly, rather than get bogged down in the mass of stuff that is the internet. Some of the phrases I have used have been used elsewhere in this thread.

A person who owns a leasehold flat is a tenant. Just in the same way that somebody who rents a flat on a short lease is a tenant. Both have a lease.

Wow. Just wow.

GRex · 20/11/2024 08:23

LilySLE · 20/11/2024 06:52

That response took me a considerable time to write. I was trying to be helpful (I thought that’s what Mumsnet was for?). Next time I won’t bother.

The OP has clearly already done some research about this, and on the basis of the information in my post I was aiming to give her the tools to enable her to do more and hopefully get her where she needs to be more quickly, rather than get bogged down in the mass of stuff that is the internet. Some of the phrases I have used have been used elsewhere in this thread.

A person who owns a leasehold flat is a tenant. Just in the same way that somebody who rents a flat on a short lease is a tenant. Both have a lease.

Wow. Just wow.

Show quote history

I thought your post was very helpful actually.

Short version for the person who struggles with long sentences:
Compliance as a higher risk building is difficult due to new legislation, it carries the risk of criminal charges so it's too high risk for a leaseholder group of amateur flat owners and will get expensive in professional fees. This means the charge does not sound extortionate for next year, so OP would be best to accept or sell.

GranPepper · 20/11/2024 09:39

LilySLE · 20/11/2024 06:52

That response took me a considerable time to write. I was trying to be helpful (I thought that’s what Mumsnet was for?). Next time I won’t bother.

The OP has clearly already done some research about this, and on the basis of the information in my post I was aiming to give her the tools to enable her to do more and hopefully get her where she needs to be more quickly, rather than get bogged down in the mass of stuff that is the internet. Some of the phrases I have used have been used elsewhere in this thread.

A person who owns a leasehold flat is a tenant. Just in the same way that somebody who rents a flat on a short lease is a tenant. Both have a lease.

Wow. Just wow.

Show quote history

I apologise if my reply upset you. I think this may have been caused by the fact that, in Scotland where I live, an owner is an owner and a tenant is someone who rents a property either from a Local Authority or a private landlord. The only slight caveat is if a property owner purchased using a Shared Ownership scheme, in which case they pay a rent to whoever part-funded the purchase of the property. We do not pay a rent for the ground the property is built on to anyone and, if we want to make certain adjustments to our property that exceed "permitted development", the authority we require is from Building Control at the Local Authority. I presume your response was from an England/Wales? perspective

Original poster

Haveyouseenthischicken · 20/11/2024 10:22

LilySLE · 19/11/2024 23:16

First off I’m really sorry to hear that you’re in this position. It’s truly dreadful.

There’s a lot of advice on this thread, but I hope that this helps to clarify some of it.

The Building Safety Act 2022 is a very new and complex piece of legislation. Professionals are still grappling with it. It’s virtually impossible for a lay person to navigate. The Act distinguishes between, on the one hand, costs payable to remediate EXISTING defects in buildings - for which the principle is that by and large tenants shouldn’t pay, and tenants receive certain protections (though the application of the rules can be complex) - and, on the other hand, FUTURE costs payable by what is known as the “Accountable Person” for the building to ensure that the building is duly registered with the Building Safety Regulator and that the Regulator has all the information to be able to monitor that the building STAYS safe going forwards. These costs CAN be recharged to tenants. The legal authority for this is s30D of the Landlord and Tenant Act 1985, which was inserted by section 112 of the Building Safety Act.

The requirement to apply for a building safety case report for a higher-risk building is part of the costs that can be charged for via the service charge. Because it is a new requirement, there is a lot of uncertainty around what the regulator will require, and often the regulator will come back and ask for more documentation. It is not a quick or straightforward process, and most Accountable Persons would hire professionals to assist them with this. Those professional fees can also be recharged to tenants.

That’s not to say that the normal protections that tenants have around their service charge do not also apply to these costs (eg the option to challenge in Tribunal etc) - I haven’t actually looked into this point, but let’s assume that they can. But there isn’t much precedent for how much it “should” cost to prepare a building safety case, because it’s such a new requirement and the regulator keeps moving the goalposts. So the Tribunal may not have much to go on.

Many people have advised going down the route of clubbing together to buy your freehold, or exercising the right to manage. Aside from the fact that it sounds like you want to be rid of this flat asap, rather than get more involved, I would really counsel caution before doing either of these things. The fact that your building is a “higher-risk building” for the purposes of the Building Safety Act impacts this decision considerably. The compliance requirements under the Act are extremely onerous. They are difficult for even commercial landlords with the benefit of expensive advisors to comply with. A tenant run body would have to engage external consultants in order to stand a hope of complying. It would be massively time consuming, and carries the risk of criminal penalties if you get it wrong. Those who have advocated exercising these rights probably are not in a higher-risk building.

As you can probably tell, I have some industry knowledge, but I promise you I’m not a property developer/investor/landlord/managing agent or anything like that!

Good luck

This was really helpful and I appreciate it likely took you a long time to write. I found it much easier to understand than anything else I’ve found online about the 2022 Act. I’ll be sharing this with my husband and getting his thoughts too! Thank you.

OP posts:

Lovemycat2023 · 20/11/2024 10:26

LilySLE · 19/11/2024 23:16

First off I’m really sorry to hear that you’re in this position. It’s truly dreadful.

There’s a lot of advice on this thread, but I hope that this helps to clarify some of it.

The Building Safety Act 2022 is a very new and complex piece of legislation. Professionals are still grappling with it. It’s virtually impossible for a lay person to navigate. The Act distinguishes between, on the one hand, costs payable to remediate EXISTING defects in buildings - for which the principle is that by and large tenants shouldn’t pay, and tenants receive certain protections (though the application of the rules can be complex) - and, on the other hand, FUTURE costs payable by what is known as the “Accountable Person” for the building to ensure that the building is duly registered with the Building Safety Regulator and that the Regulator has all the information to be able to monitor that the building STAYS safe going forwards. These costs CAN be recharged to tenants. The legal authority for this is s30D of the Landlord and Tenant Act 1985, which was inserted by section 112 of the Building Safety Act.

The requirement to apply for a building safety case report for a higher-risk building is part of the costs that can be charged for via the service charge. Because it is a new requirement, there is a lot of uncertainty around what the regulator will require, and often the regulator will come back and ask for more documentation. It is not a quick or straightforward process, and most Accountable Persons would hire professionals to assist them with this. Those professional fees can also be recharged to tenants.

That’s not to say that the normal protections that tenants have around their service charge do not also apply to these costs (eg the option to challenge in Tribunal etc) - I haven’t actually looked into this point, but let’s assume that they can. But there isn’t much precedent for how much it “should” cost to prepare a building safety case, because it’s such a new requirement and the regulator keeps moving the goalposts. So the Tribunal may not have much to go on.

Many people have advised going down the route of clubbing together to buy your freehold, or exercising the right to manage. Aside from the fact that it sounds like you want to be rid of this flat asap, rather than get more involved, I would really counsel caution before doing either of these things. The fact that your building is a “higher-risk building” for the purposes of the Building Safety Act impacts this decision considerably. The compliance requirements under the Act are extremely onerous. They are difficult for even commercial landlords with the benefit of expensive advisors to comply with. A tenant run body would have to engage external consultants in order to stand a hope of complying. It would be massively time consuming, and carries the risk of criminal penalties if you get it wrong. Those who have advocated exercising these rights probably are not in a higher-risk building.

As you can probably tell, I have some industry knowledge, but I promise you I’m not a property developer/investor/landlord/managing agent or anything like that!

Good luck

mumsnet is brilliant sometimes - this is a well written and useful post, with some helpful practical points too.

GRex · 20/11/2024 13:13

GranPepper · 20/11/2024 09:39

I apologise if my reply upset you. I think this may have been caused by the fact that, in Scotland where I live, an owner is an owner and a tenant is someone who rents a property either from a Local Authority or a private landlord. The only slight caveat is if a property owner purchased using a Shared Ownership scheme, in which case they pay a rent to whoever part-funded the purchase of the property. We do not pay a rent for the ground the property is built on to anyone and, if we want to make certain adjustments to our property that exceed "permitted development", the authority we require is from Building Control at the Local Authority. I presume your response was from an England/Wales? perspective

Show quote history

Leasehold is less common in Scotland. Where the leasehold (often flats) legal constructs exist however, a leaseholder is still technically a tenant. That is the case even if the lease is 999 years, and even if all their mates call them a flat "owner", because they do not own the land.

GranPepper · 20/11/2024 13:35

GRex · 20/11/2024 13:13

Leasehold is less common in Scotland. Where the leasehold (often flats) legal constructs exist however, a leaseholder is still technically a tenant. That is the case even if the lease is 999 years, and even if all their mates call them a flat "owner", because they do not own the land.

Show quote history

I wouldn't describe it as just less common. Property was held by feuhold in Scotland historically. This was abolished and later "leases" on even tenements were abolished for any over 175 years (vast majority were 999 years). So people in Scotland don't pay a ground rent or feu duty. They do pay service charges in some circumstances, eg, common repairs/insurances/cleaning

LilySLE · 20/11/2024 16:08

Haveyouseenthischicken · 20/11/2024 10:22

This was really helpful and I appreciate it likely took you a long time to write. I found it much easier to understand than anything else I’ve found online about the 2022 Act. I’ll be sharing this with my husband and getting his thoughts too! Thank you.

Show quote history

Glad you found it helpful. I’ve since spoken to someone else in the industry as I felt so bad for you. She is involved in preparing building safety cases. Her bit is only one component of the building safety case, and she estimated that her bit would cost about £7k. There are other bits to be layered on top as she only advises on one specific aspect of it. It was a bit “finger in the air”, but she thought that a total figure of around £30k for the preparation of a building safety case was not a bad guesstimate.

I don’t know how many flats are in your block, and how the service charge is divided up between them. But on a total figure of around £30k, £7-9k per flat sounds steep unless there are only a few flats in the block? On that basis I would say you definitely need more information as to the basis of the charge. It may be covering other aspects of building safety compliance as well as just the building safety case of course.

A couple of other things. You were asking how often this cost would recur. My contact said the building safety case needs to be done every five years (I haven’t verified this).

Also one of the other obligations of the “Accountable Person” (likely either your landlord or the management company) is to have a resident engagement strategy around building safety. So this would be another good question to ask them, because they are obliged by statute to engage with residents, and this may give you another opportunity to probe more deeply into the costs.

Daisymay2 · 20/11/2024 18:14

@LilySLE
Your response was very helpful, so please do not be put off by the PP.
My only slight caveat is that when I said about heading for a Right to Manage (RTM) option, the idea was not to start managing the development themselves but to select another better Managing Agent. In theory existing directors should be able to do this, but often they are not in place, even though they should be or are close to the existing Managing Agent. We had this situation in a property we own and one owner downloaded the Land Registry details from all flats and then wrote to everyone. Then requested an EGM and a board of Directors was elected. The MA had refused to allow a Board to be elected as they had been appointed by the liquidators about 5 years previously. We then drew up a spec for what was needed in a MA and set about selecting a new one.

Nantescalling · 21/11/2024 10:01

If you coud band together with other owners,the costwould be split. It is probable that even owners with no intention of selling are caught up in this ludicrous charge business. I would even suggest that you get free independent advice from the Citizens' Adviuce Bureau. hey often know how to deal with this kind of issue.

Nantescalling · 21/11/2024 10:01

If you coud band together with other owners,the costwould be split. It is probable that even owners with no intention of selling are caught up in this ludicrous charge business. I would even suggest that you get free independent advice from the Citizens' Adviuce Bureau. They often know how to deal with this kind of issue.

sallydoodlecat · 22/11/2024 06:59

There's a BBC. Article on this. Read it and thought of you. www.bbc.co.uk/news/articles/c3e8x0084x5o

sallydoodlecat · 22/11/2024 07:02

And this one. www.bbc.co.uk/news/articles/cy84g9822gro

I'm so sorry you're going through this

friskybivalves · 22/11/2024 08:29

sallydoodlecat · 22/11/2024 07:02

And this one. www.bbc.co.uk/news/articles/cy84g9822gro

I'm so sorry you're going through this

This is so disgusting to read.

GranPepper · 22/11/2024 10:02

They have been talking about leaseholder issues for a large part of Bbc Morning Live today and have pointed people to iplayer for 2 programmes (called The Leasehold Trap; and secondly The True Cost of Leasehold). I haven't watched them as yet but these may be helpful to OP

Original poster

Haveyouseenthischicken · 22/11/2024 10:50

Thank you again to everyone commenting. I’ve been following the BBC articles closely. Sadly it sounds like nothing will change instantly :( but I agree it’s positive to see it in the media.

OP posts:

frecklejuice · 22/11/2024 19:54

@Haveyouseenthischicken there is a programme on BBC about this right now. I feel so sorry for you, it’s awful that they can do this and get away with it.

Marieb19 · 23/11/2024 17:56

Leasehold legislation is a mess and is completely down to appaling successive governments. Please write this to your MP, because they are the only people who can remedy it. It sounds like yours may be a larger development which makes things a lot more difficult. If it were a smaller block the residents can band together and form a management committee and take over the management of the block. Not probably what you want to do at this point in time.

Pawparazzi · 23/11/2024 18:10

I think I've posted on this already, but as others have already suggested, one sure way out of this he'll for you is 'Right to Manage'. Send me a DM if you want more info on this, but it IS a long process, it can take 12 months or more. But also, you can go to the FTT (Fist Tier Tribunal) to claim back unreasonable charges. You don't need a solicitor. You can make a case yourself.
Did you see the BBC coverage yesterday on Eagerstates and AssetHold in north London? They are my Freeholder and we too, are facing upward-spiralling service charges. We have achieved RTM but have been blocked so we are back at the FTT Court. Failing everything else, look into selling by 'Modern Method of Auction'. You will lose money, perhaps have to sell at 25% under valuation, but the process takes only about 8 weeks and then you will be free of the issue.

Pawparazzi · 23/11/2024 18:13

GranPepper · 22/11/2024 10:02

They have been talking about leaseholder issues for a large part of Bbc Morning Live today and have pointed people to iplayer for 2 programmes (called The Leasehold Trap; and secondly The True Cost of Leasehold). I haven't watched them as yet but these may be helpful to OP

This is my Freeholder and Management Company they are talking about: AssetHold and Eagerstates. We are a block of 36 flats but we have achieved RTM, although it's been appealed and so we are back at Court over it.

Ebedee · 23/11/2024 18:31

Floralnomad · 16/11/2024 00:35

Can you try and speak to the MP who has the constituency , may not be any use but some of them are willing to try and assist with these kinds of things . Obviously these management groups need regulating as it’s ridiculous .

This!
Good advice.

Seelybe · 23/11/2024 18:34

It's an awful situation for you but essentially the management company can't charge what they like. They should be providing the residents with accounts showing how the charges have been calculated, and if they are blatantly inflated or you're not getting what you've paid for as in the examples you've given, first stage is to challenge directly (ideally collectively). If that doesn't produce a result you can take them to tribunal who will assess the fairness of the charges. Obviously takes time though leaving you with the status quo a while longer. The quick and simple option is to take the financial hit for a quick sale, draw a line and move on (galling though it is) but there are options to fight it if you can face it. But I'd be devastated too.

LoyalShaker · 23/11/2024 18:39

I def don't think you are being unreasonable. It is sounds outrageous on the part of the company charging you the service charge. It's like the wild west out there with lack of accountability and standards. I can only offer my understanding and hope that you can extricate yourself soon. It's unfair if you want to start a family. I really feel for you. 🥰 xxxc

Another2356 · 23/11/2024 19:11

You can challenge the service charge.
And take legal advice as a first step. Including the option to set up a board to take over the leasehold management.

take a little time to legally understand your options before you sell via auction.

IamMoodyBlue · 23/11/2024 19:37

I wish I could offer you help and advice, but I can't. Just much, much sympathy and understanding.
None of this is your fault. You're a victim in all this. I can sympathise very much with your feelings of desperation and helplessness. I quite understand how you felt so very bad. I"ve been there.

There will be brighter days ahead for you I have no doubt. You're still looking for the switch to put on the light at the end of the tunnel, but, somehow, you will find it.
It takes a lot of courage to ask for help when you are feeling so bad.
My very best wishes for a happier, brighter future.