Dodgy Management Company/person for Freehold House

[Kpo]

I'm posting this message and would be grateful for any advise on this matter. Thanks!

 

We purchased a terraced house in a cul-de-sac last October and promptly paid the annual estates mangement fee of £470 promptly. However, from Jan - present, no work has been done including garden maintenance.

 

In July, we received an email from the new Estates company informing us that they have been appointed to replace the old company and asked for some more money. I emailed back with the following questions:

 

1) Who appointed them? Why wasn't there any communication/consultation with us (the landlords) on this matter?

2) How will we be reimbursed for the fees paid since no work has been done for the past 8 months?

3) What are the services that are covered by the fees? We also pay council tax, should the council be responsible for matters such as litter collection and repairing of roads?

 

We received a non-commital response which didn't answer our questions.

 

After speaking to some of our neighbours, we realised that one neighbour set up a management company who has been managing the past and present estates company. When I posed the questions as above, she responded as follows:

a) it is a legal requirement to have a management company in the estate, otherwise, we will not be able to sell our property in the future

2) we will not be able to re-coup any of the fees as the money has been given to the new estates company

3) If we refuse to pay anny future fees, we will face legal consequences

 

We feel very unsettled with the response as it simply doesn't make sense and feel strongly that there should be more transparency when managing these affairs. There are a total of 24 units who pay the annual fee of £460 each which total an amount of £11,000 and it seem a very large fund to be handled by a single person with no consultation whatsoever.

 

Please can I have some advice on what are our rights on this matter and where do we stand. Is this neighbour acting suspiciously? Can we refuse to pay anymore fees?

 

Thanks!

[citizenB]

I am losing the plot. I do not know if I have moved you to the right forum, we don't appear to have a specific place for management company issues.

 

However, you will receive more views here than the Welcome forum"

 

 

I will also flag for site team views.

Edited August 14, 2013 by citizenB

[raydetinu]

Is it a leasehold property then? with ground rent?

I presume the access road has not been adopted by the council? drains etc.

Does not sound legal that one person van just set up a management co without the approval/agreement of all the householders.

Suggest you get legal advice.

What is in your lease contract and what services do get for your fee?

[ericsbrother]

Agree, sounds like you need to speak to the original developers to see what is what that is not in your deeds regarding common areas. You may be an equal shareholder in the management company and this person has taken it upon herself to be a be-all and end-all for the work (and making a bit on the side if she has contracted to do things herself). if it is the case then you need to leaflet all of the other property owners to call a management meeting and sort things out on a formal basis. This may mean paying a lawyer to draw up new contracts/agreements afterwards but you need to know now who is properly in charge.

[Kpo]

Thanks both for the helpful comments. It confirms my suspicion of illegal behaviour. I am pretty sure that there's no ground rent but I will contact the developer to find out more details.

 

In the meantime, can I refuse to pay anymore fees? Also, can anyone recommend where I can get some free legal advice on this.

 

Thanks again for your help - much appreciated!

 

Agree, sounds like you need to speak to the original developers to see what is what that is not in your deeds regarding common areas. You may be an equal shareholder in the management company and this person has taken it upon herself to be a be-all and end-all for the work (and making a bit on the side if she has contracted to do things herself). if it is the case then you need to leaflet all of the other property owners to call a management meeting and sort things out on a formal basis. This may mean paying a lawyer to draw up new contracts/agreements afterwards but you need to know now who is properly in charge.

[andydd]

Hi. Im the freehold 'expert' here.

 

Your case sounds a bit puzzling, normally people who own a leasehold property dont own it fully, they actually rent it for 99 or 999 years, the freeholder owns the poperty and is responsible for maintenance, (he must can only recover sums he has actually spent, therefore if he charges for maintenance, then works must be done !).

 

Often a freeholder takes a back seat role and employs a management company, generally the home owners have no say in this.

 

The OP does state though that he is the landlord which confuses things a bit (freeholder/landlord are interchangable), although a leasehold can be a landlord if he doesnt live at the property but instead lets it out, is this the case here ?

 

Or it may be that the OP fully owns the property (i.e its freehold not leasehold) but as with some new estates there are still charges to pay as part of the purchase agreement, to kep estate tidy, etc

 

Andy

[raydetinu]

Ok Andy, OP needs to clarify!

[Kpo]

Sorry Guys if I'm not being clear and thanks for helpful comments.

 

We bought the house in October last year in a cul-de-sac estate and it is listed as a freehold property. We were asked to pay service charges of £470 to an Estates Management company called Aston Rose for the following year and we did. The gardens in the communal areas were being maintained periodically and suddenly stopped in January this year. There was no communication at all and nobody in the estate seem to know what happened. Then in July, we received a letter from a new Estates Management Company called Sterling Estates stating that they have replaced the previous company and then asked us to pay more fees.

 

I responded with questions asking:

- what services do they perform for the fees that we pay?

- do we get our fees reimbursed for the past 6 months where no work was done?

- who appointed them in the first place?

 

They did not answer my questions but simply asked us to pay the extra charges.

 

We then went around the estate asking neighbours. Most of them were renting so didn't have a clue but one particular neighbour, Irina, told us that another neighbour called Graham is the Director of Pembroke Management Company who is managing the estate and she has been 'helping out' on the affairs. She explained that:

- we won't be able to get any of our fees back as they have been spent paying the new estates company

- we are legally obliged to the pays otherwise we would have difficulty selling our property in the future

 

As mentioned in my first thread, we were not convinced by her explanation. There are a total of 24 households paying £470 a year which totals £11,000. Why do we not have a say in matters relating to the estate, e.g the appointment of estate management company and what their services cover?

 

Also, since no work has been done since January until now, why won't we get reimbursed for the fees already paid? We also pay council tax, should the council be responsible for matters such as litter collection and maintaining street lights and repairing of roads?

 

Sorry for the long lists of questions but this is all very confusing for me and would appreciate your advice.

 

Many thanks as always!

[raydetinu]

Check with the council, roads dept. if the road has been adopted by the council.

Suggest you check your deeds if the is a covenant regarding the management of common areas and what fees are payable.

[andydd]

So its a freehold property, so the rules about leasehold and lvt etc dont apply BUT the usual contract rules will, i.e there must be an agreement somewhere that you will pay for estate upkeep BUT also they must their side too and do work, etc you cant be expected to pay for nothing !

 

You need to find out whats going on ?, where is original contract, what does it say?, etc

 

As i mentioned above you may not have a say in how the management works or what services they do.

[ericsbrother]

It will be a covenant in your deeds that states the position and dealings of common areas and who owns them. It could be owned commonly by all of the home owners, by the developer or another property company. Your solicitor should have looked into all of this before you exchanged contracts, what did they say about it if anything? If it really wasnt brought to your attention then that is quite a serious shortcoming and a compalint should be made, firstly to them and then to the SRA if you dont get any joy.

[bellijayne]

OK I've never heard of this either. As the others have said you need to go over the Title Deeds here in detail. Few Freehold property's come with covenants. If you are truely that suspicious about this woman there is another way... You & the other residents could do a gang up & fire her on a vote of no confidence? I would certainly raise Q's as to the validity of the Accts & how much money is involved. Sometimes it pays to google a name or that of the Co. to see if there is any cartel activity including shared Directorships.