Question 1

Questioning service charge

Accepted Answer

I would be grateful if you could point me towards where I can seek advice on the right to manage by leaseholders of a property who are unhappy with present managing agents and the procedure for questioning the service charge? The FPRA replies: For details of challenging service charges, I can do no better than to refer you to the LEASE websote page on service charges. If the Managing Agents have not complied with the relevant consultation requirements set out in s 20 Landlord and Tenant Act 1985 then the excess over the relevant limits (£250 per flat for repairs, £100 per flat for ongoing contracts) is likely to be irrecoverable; if expenditure has not been reasonably incurred, then you may be able to get the Leasehold Valuation Tribunal to reduce the amount payable under s 19 LTA 1985. With regard to the Right to Manage, I would refer you to the relevant LEASE website page. You should carefully note that exercising the RTM does not just mean that the leaseholders nominate the Managing Agents: you would have to set up an RTM company, and the RTM company would then not only get to appoint the managing agents, but you would assume most of the management functions now carried out by the landlords. This might involve giving directions to any new managing agents on how strictly they should enforce certain regulations under the lease, deciding on the timetabling of maintenance works etc. Whilst the RTM is a valuable tool, it can sometimes mean that leaseholders have to be more involved in management than they would like to, and, if there are different schools of thought among leaseholders as to how the block should be managed, it can exacerbate those differences if they have to resolved within the RTM rather than having a solution imposed by an outside ground landlord. If what you really want is for the existing ground landlord to change the managing agents, you may find that the threat of invoking the RTM is more valuable than actually exercising it; though if your current ground landlord will not consider changing the managing agents, you may have no choice but to exercise the RTM. You ought to think carefully before exercising the RTM if your development includes non-residential parts, as the RTM extends to flats, not to commercial elements in the building. The LEASE booklet (under “non residential parts”) may rather underestimate the potential scope for conflict here, given that, if the owners of leasehold flats are exercising the RTM, it will almost always mean that there is a degree of animosity between the leaseholders and the ground landlord and/or the landlord’s managing agent. Against that background it seems to me a trifle unrealistic to expect that differences between (on the one side) the RTM Company and their managing agents and (on the other side) the ground landlord and its managing agents are going to be settled amicably by “sensible negotiation”.

Question 2

Questioning service charge

Accepted Answer

I would be grateful if you could point me towards where I can seek advice on the right to manage by leaseholders of a property who are unhappy with present managing agents and the procedure for questioning the service charge? The FPRA replies: For details of challenging service charges, I can do no better than to refer you to the LEASE websote page on service charges. If the Managing Agents have not complied with the relevant consultation requirements set out in s 20 Landlord and Tenant Act 1985 then the excess over the relevant limits (£250 per flat for repairs, £100 per flat for ongoing contracts) is likely to be irrecoverable; if expenditure has not been reasonably incurred, then you may be able to get the Leasehold Valuation Tribunal to reduce the amount payable under s 19 LTA 1985. With regard to the Right to Manage, I would refer you to the relevant LEASE website page. You should carefully note that exercising the RTM does not just mean that the leaseholders nominate the Managing Agents: you would have to set up an RTM company, and the RTM company would then not only get to appoint the managing agents, but you would assume most of the management functions now carried out by the landlords. This might involve giving directions to any new managing agents on how strictly they should enforce certain regulations under the lease, deciding on the timetabling of maintenance works etc. Whilst the RTM is a valuable tool, it can sometimes mean that leaseholders have to be more involved in management than they would like to, and, if there are different schools of thought among leaseholders as to how the block should be managed, it can exacerbate those differences if they have to resolved within the RTM rather than having a solution imposed by an outside ground landlord. If what you really want is for the existing ground landlord to change the managing agents, you may find that the threat of invoking the RTM is more valuable than actually exercising it; though if your current ground landlord will not consider changing the managing agents, you may have no choice but to exercise the RTM. You ought to think carefully before exercising the RTM if your development includes non-residential parts, as the RTM extends to flats, not to commercial elements in the building. The LEASE booklet (under “non residential parts”) may rather underestimate the potential scope for conflict here, given that, if the owners of leasehold flats are exercising the RTM, it will almost always mean that there is a degree of animosity between the leaseholders and the ground landlord and/or the landlord’s managing agent. Against that background it seems to me a trifle unrealistic to expect that differences between (on the one side) the RTM Company and their managing agents and (on the other side) the ground landlord and its managing agents are going to be settled amicably by “sensible negotiation”.

Questioning service charge

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