Cost of broken lift in leasehold flat? Big problem!

[missmouse101]

Has anyone been through this before? I own one of 12 flats (over 3 floors) and we pay £925 per year service charge for insurance, communal area upkeep, gardening, sink fund etc. All the reserves were used on a whole roof repair early this year. We have been quoted a minimum of 25k to have the necessary repairs done to the lift. (2k ish per flat)

We have looked into insurance, but it is not possible to claim for the works. 7 flat owners favour taking the lift out of use as no one currently NEEDS it. I would like to see the repair done as I think the long term implications are too serious. But we cannot find a way forward, mainly because many people just cannot afford to pay. We are having another meeting in a week or two.

Has anyone been in a similar situation? I'd be so grateful to hear anyone's thoughts!

Yes I've been in this position and we chose not to repair the lift and we were 5 floors in a listed building.

We then were all forced to spend an outrageous amount on fixing the roof and external decorating.

We all bandied together eventually and bought the freehold for ourselves. Most of us sold up and left after that. I vowed never ever to buy a flat again as all those costs were ridiculous and never ending as there is always something or other to pay out for.

No idea but is it possible to get a loan where the lift is fixed and each flat pays off say 100 pounds a month or whatever makes sense then after a couple of years the loan is paid off?
Is the problem just the one off cost or people don't think it's value for money having a lift?

If people can’t afford to pay and it’s not covered by insurance could you all agree to pay into an account a certain amount every month until the costs are met? It may take a while though.

Lifts are so expensive, I'd never buy in a block with one. Unfortunately I don't think the cost is excessive, I had to get quotes for a major repair for one around five years ago and that was £20K.

First thing I'd do is check if leaving the lift in its current state will invalidate the building insurance, it could well do. Also how much will it affect the resale value of the flat, and will the problem get worse/ more expensive if not repaired now?

The problem is, if you want to sell who will buy a flat with no working lift where you haven’t repaired something because the ongoing maintainance costs are too great? You’re basically making it so you’re unable to sell your property.

If the 7 flat owners who don't want the lift repaired all stay on the top floor I would maybe consider it. But bet they don't!!!

It means the 3rd floor owners will have to take shopping up, bins down 3 flights of stairs. What happens in an emergency and they or ambulance need to help them downstairs, a broken leg or even just a nasty sprained ankle could make their home inaccessible. What if they have visitors who have impaired mobility?

IMO The lift needs fixed, if all flats are legally equally liable for the costs and they won't be reasonable it is time for solicitors.

Also do you have right to manage or are you paying your service charge to an external management company? If the latter they may force the issue, doing the work and then pursuing each leaseholder for the cost.

(Am assuming you're in England or Wales. The law on leaseholds is different in Scotland, and unsure about NI.)

Thanks so much everyone for replying. A loan is certainly an idea, but the interest rate is so off-putting. We've considered saving up slowly but fear many other components will have deteriorated by that time, plus the original quote will be much more. We don't pay an external management company, we do it ourselves.

The problem is the one off cost rather than concern about value for money with the actual repair.

Anyone else been through this?

Is there any benefit to the ground floor flats of having a lift? If not I don't see why they would be expected to contribute?

It's in the contract that the flats all have to contribute equally to joint maintenance of everything within the building, regardless of whether they use it or not. Like maintenance of balconies etc.

The people who can’t afford it need to remortgage to contribute their share. Otherwise none of you will be able to sell. No one would want to buy in a building with a non-working lift, as it’s an indication that other common repairs wouldn’t get done.

There was talk of boarding it up/walling it off if they don't repair. So, potentially any future purchasers may not even know it existed. I feel very nervous about that whole idea though.

Hi, previous block manager manager.

You need to make sure that the management company are following the section 20 process - this means sending all leaseholders a letter of intent re the works, then a further letter when competitive tenders have been sought and evaluated.

The management company can only ask for monies for these works from you as per the charging schedule set out in your Lease (usually quarterly or half yearly).

Unfortunately you have no 'right' to a payment schedule but depending on the property funds the directors may be prepared to offer you one.

Decommissioning the lift will not be an option, leaseholders will have a right to use it, as per their lease. The only way this would be possible would be to get every Leaseholder with a right to use the lift to agree to their lease being varied (which I very much doubt would happen).

Happy to answer any questions

@cliffdiver, thanks so much for that. The letters as you describe and details of two quotes have been sent out to all owners. We discussed the fact that we'd need to contact our mortgage providers as there would be an amendment to lease, if it does get mothballed. So grateful for your offer of help with any more questions!

The management charge is actually too low. Your sinking fund should have been maintained at a reasonable level so that major repairs are covered. This needs to be addressed. People might begrudge an increase but it avoids problems later when there are big repairs.
I agree with cliffdiver . We had similar problems in a self-managed block. Low floors didn't want a lift, higher floors weren't so worried about gardens.

We made sure the sinking fund was kept high though - although that always caused some resentment - but it meant the big bills were then, (mostly), covered.

And you can't just remove the lift.

I agree with @SpiderPlant38 - at the next annual review of the budget you need to consider increasing service charges to build up a reserve fund. Where are you based? As a guide, I managed flats in Brighton and most contributed £1,000 per flat (more for seafront properties) per annum on top of maintenance charge - individual amounts would vary of course, as per the lease percentages but as a general guide £1,000 per unit.

This can be quite contentious, as all monies paid in belong to the property and cannot be withdrawn upon selling - meaning those planning to sell their flats in a couple of years will be hesitant. However, a healthy reserve fund can actually be helpful in negotiating a higher offer on your flat as any future purchasers will be less likely to have any large payments.

Do you own the freehold and do all flats own a share?

Is there any benefit to the ground floor flats of having a lift? If not I don't see why they would be expected to contribute?

Unhelpful comment clearly demonstrating zero knowledge of leaseholds.

When we sold the flats we found that actually one of the major worries for potential purchasers was whether or not they'd suddenly find themselves liable for major bills soon after moving in. Purchasers' solicitors always asked for detailed future budgets, for confirmation that there were no major works planned, for records of when the exterior painting, roof, windows etc were last done. A sinking fund of £ 20k which would be enough to cover any major repairs gives reassurance and is indicative of prudent management.

The flat is near Abergavenny in Wales and we don't own the freehold. They are leasehold. Really grateful for everyone's advice so far.