Council charges on privately owned leasehold property
 

My mother owns a ground floor flat in a block with six other flats that are leasehold. The local council have just given her a bill for £975. The bill includes £178 "management charge", £88 insurance, and £250 "fire risk assessment", the latter I believe involved two blokes pointing at the door and talking for a few minutes. There are other charges for "responsive repairs" some of which I intend to dispute. What really annoys me is the fact that if you call them out to fix anything they charge you, that's on top of paying insurance and council tax. It seems even more unfair as my mother is 85 and housebound due to severe osteoporosis and rheumatoid arthritis. Seems like daylight robbery to me.

Does she pay a monthly service charge/ground rent to a managing agent?
Are the council the managing agent for the building?
Who owns the freehold on the building/grounds?
Is she in receipt of benefits?

When I was living in the flat I owned I was paying £160 a month to the management company. Why I was paying that I don't know, never saw them clean anything up and every time I received a letter to say that I had to pay for the corridors to be painted I had to pay for it, so what was the £160 a month I was paying a month used for then?. I hate them, and your right, they are a rip off.

Ground rent is paid to the local council, its only £10 a year, I guess they would be considered the managing agent. Not sure how it works with regard to a freehold as the flat is privately owned with leasehold. Yes she is in receipt of attendance allowance and gets a very small reduction on council tax.

Do you have any sort of leasehold contract with the freeholder (council), a legal document saying what exactly you are liable for, what the freeholder is responsible for, etc?

My home is freehold but I believe all leasehold properties should have something like this?

On a slight tangent all leaseholders should be careful about who owns the freehold and what the freeholder is entitled to. A growth area is for predatory companies to buy up freeholds on leasehold residential properties then to start charging rip off rents, then if you don't pay they can block the sale of your home and stuff.

If she is in receipt of attendance allowance, check if she is also eligible for housing benefit - housing benefit can pay all/part of her monthly service charge.

The service charge should cover known and projected maintenance costs - calculated by the managing agent, on behalf of the freeholder. Sometimes there is an intermediate head leaseholder.

The managing agent can raise further funds, from the tenants, for unexpected repairs or for double glazing the building etc. When the requested funds are above a certain level you may suggest an alternative contractor.

Giving the managing agent notice, you are within your rights to go to see the individual maintenance invoices for the previous years accounts.

Hopefully the managing agent is a member of ARMA

This organisation are helpful:
http://www.lease-advice.org

Me and my girlfriend have just moved into a new build house on a 999 year leasehold, held by the the company we bought off. We have a rental charge that's circa £150 a year and a £100 service charge, as the roads etc won't be taken on by the council but will instead be maintained by a contracting company.

Never heard of this extra council stuff you're on about, and I was very questionable on any extras the house builders may have "forgotten" to disclose.

Is the rental and 'service' charges fixed for the 999 years?

That sounds like BS about the roads.

I wish, Joe :lol1:

No it's allowed to rise online with inflation. That's my understanding from scrutinising the poor sales chap when originally signing some paperwork. I didn't want to be in the situation of paying an extra 5, then 10 etc. etc. like you inevitably do with TV subscriptions and such!

May well be BS regards the roads, the house is a tip at the minute so I haven't the details to hand. I do know (and indeed have seen) the greenery and such like being taken care of by outside companies in the weeks leading to and few days following our move last weekend.

They will sell it on to the highest bidding contractors within a year

That's good if it's locked to inflation, but really I can't see why a developer wouldn't want to get council to adopt the roads as public highway in principle unless they have some hustle going on to extract more cash from owners, or they built the roads substandard and cheap and below the spec the Highways people require?

What he said ^

I had some experience of this 20 odd years ago. Once the houses, flats etc. were all completed and roads/paths done, the freeholds were sold on to a company who immediately bumped up the annual charges. I did some investigation and found out that the company was owned by wife of one of the directors of the building company. Quite common, apparently

I also found out (but too late, obviously) that if more than 50% of the leaseholders in the building want to buy the freehold, they get first dibbs. I doubt it has changed, but check. Then get talking to your neighbours ....soon...

Even if you own the freehold on these estates you will still get a bill for roads, hedges, grass cutting, etc., if the developer never got the council to adopt them.

Mortgage providers actually hold back some money from the developers now to cover the costs of doing it, or taking the developer to court so they sort it. Bear in mind though I have no idea how long that practice has happened and i only know about it cos we bought a new build 17 months ago.

A freehold purchase by the leaseholders, should include the grounds/extent of the plot.
A minimum 50% tenant participation would be enough to trigger the process. But, the freehold purchase company, set-up by the tenants, would also purchase the other 50%, making the purchase double the cost, per individual.
However, the new company could then sell extended leases to the remaining leaseholders. The cost of which could be redistributed back to the original 50%.
Or, you could later sell a share of the freehold, to a non-participating leaseholder.
The longer the lease the less the freehold purchase will be.
After freehold purchase, the shareholders should appoint a managing agent.