Leaseholder Problems
It’s still the case that most people dream of owning their own home. So, it can be a real shock to discover the people you legally have to pay to keep the place in tip top condition, don’t appear to be doing anything of the sort.
Watchdog spoke to Alex who bought his flat 4 years ago. He’s a leaseholder and pays management company Firstport around £2400 a year to service and maintain the shared areas in his complex. But according to Alex that’s not been happening.
He told us:
“The carpark gates, they now haven't worked properly for about the last three years.
The lift failed two and a half weeks ago An engineer got called out he fixed it…..and then the ceiling fell down.”
“In 2022 and 2023 there was an A4 notice up by the electricity (for the communal supply) saying you're about to be cut off. (Firstport) just hadn't paid the bill.”
Alex and other residents were also recently told that they’d have to pay thousands to maintain an old war memorial in the grounds – something they weren’t expecting.
“we’ve been told categorically that cost was never going to be passed over to the residents because the developers would foot that bill”
We put Alex’s complaints to Firstport, which told us that the war memorial appears to be the responsibility of the local council, not the residents, it’s grateful the matter has been brought to their attention and whilst it investigates, it will consider any costs already incurred by leaseholders.
It also told us there was a delay in paying energy bills because they were being sent to the wrong department, but this is now resolved. Whilst there has been intermittent issues with the gate, it says it hasn’t been broken for three years, and says the lift was been fixed and is now working.
It adds UK wide cost of living challenges have impacted on maintenance costs, it shares budgets in advance with customers and some of the issues raised by Alex needed input from external contractors.
Earlier this year Michael Gove, the Secretary of Statefor Levelling Up, Housing and Communities highlighted issues with leaseholds.
“We hope, in the forthcoming King’s Speech, to introduce legislation to fundamentally reform the system. We need to end this feudal form of tenure and ensure individuals have the right to enjoy their own property fully”
For Lizzie and her partner, who bought their flat in 2021, change can’t come soon enough. The block they share with 8 other leaseholders is managed by Eagerstates.
She told us:
“When we bought the flat, we were told the service charge was going to be 800 pounds a year, the year of June 22 – 23 it was 6200 pounds.”
Lizzie’s flat is a new build - yet the leaseholders have been charged for upgrading the fire doors, for drainage repairs and £570 for a rubber mat!
“Every time we've sent them a query asking, why is it so expensive? They just come back basically saying is necessary work or no, your insurance wouldn't cover this.”
“It has taken the joy out of buying a place completely…..I now will not recommend to anybody to buy a leasehold flat.” She said.
Lizzie and her neighbours have clubbed together to try and take action.
“We decided as a flat block that we wanted to get the right to manage, which is over 50% of the flat block have to agree, you can apply for this right to manage your building yourself.”
We put Lizzie’s concerns to Eagerstates which told us:
“It’s aware of some dissatisfied leaseholders, but they represent a fraction of the properties managed. It believes the service fees it charges are reasonable and based on actual expenditure. The increases in service fees were due to unforeseen repairs and needing to meet legal regulations. Attempts to charge these repairs to the builder and new buil d insurance have not been accepted.
It is aware of Lizzie and the other leaseholders Right To Manage application but says it has not yet taken effect.
A Department for Levelling Up, Housing and Communities spokesperson said:
“By law, service charges must be reasonable and freeholders or landlords that fail to uphold their legal duties can be challenged under tribunals and ultimately in the courts.
“But we must go further to reform the fundamentally unfair leasehold system and that is why we will bring forward new laws to protect leaseholders later in this Parliament.“
A spokesperson for the property management company FirstPort said:
“We understand the importance of providing value for money for our customers. Every year, we estimate how much money will be needed to cover the maintenance and repair work there is to do, including any costs for external contractors we need to appoint to undertake specific jobs. Unfortunately, the UK-wide cost of living challenges we’re all facing have affected some areas of service charge budget. We share budgets in advance, taking a transparent approach so that customers can see exactly what they are paying for.”
“We regularly maintain and service the mechanical equipment at our developments so that it remains in a good condition, and we can proactively plan for upgrades as equipment gets older. Unfortunately, some issues are outside of our control and need input from external contractors or require parts that are not immediately available. We have expert teams in-house who work closely with contractors to keep works on track and we do everything we can to minimise any delays.”
Regarding the gates to the car park:
“The undercroft vehicle gate is currently out of order because of a broken motor. We are working with our contractor to obtain the part and we will replace it as soon as possible.
“There have been intermittent problems with this gate over time and we have worked with our external contractor to resolve issues quickly. We have recently appointed an engineer to carry out an inspection on all the gates at Nash Mills Wharf to pre-empt any further issues.”
Regarding the lift:
“The lift engineer had to return to site on the 14th September as the lift briefly stopped working because the control panel door on the top floor was left open. The engineer who attended site the previous day has confirmed it was not left like this. The issue was resolved by the engineer on the same day, and the lift is now in full working order.”
An Eagerstates spokesperson said:
“We are aware that there are some leaseholders who are not satisfied with the service provided, but this is just a fraction of the leaseholders who we manage properties on behalf of and we have many hundreds of satisfied leaseholders, they don’t necessarily post this online, but we have a great relationship with many leaseholders. We are not aware of any property management company who do not have any complaints about their service, as this is the nature of being a service company. In fact, we have recently had discussions with some leaseholders who have taken over their right to manage and wanted us to manage the property for them, as the property was not being maintained.
In Lizzies case:
The case study did buy a new flat from an unrelated developer. We do not believe that these are unreasonably inflated service charge fees. These have been based on the actual expenditure incurred at the property, and we believe the individual items of expenditure are indeed reasonable.
The large increase for 22/23 was due to large repairs that were required during the year to the roof and the pumps, which were out of our control and could not be avoided. This accounts for nearly £1,800 of the charge in 22/23. There were some other minor repairs required during the year, but these large items of expenditure were out of our control, and we would not expect them to occur on a yearly basis.
We did make claims where these were possible, but these were rejected. We do not plan to have such large repairs this year, but these are not within our control. We always try to work with our leaseholders to assist them in paying their account if there are any issues.
We appreciate that these charges have been incurred but we have had to comply with legal obligations at the property. We are required by law to survey and service the fire doors at least once a year. There were issues noted by a third party and as a responsible managing agent we have had to deal with these issues and carry out repairs. With regards to the electrical works, this is unfortunate, but we did not hold an electrical certificate for the property and therefore legally had to carry out a test. Despite being a new build, the certification failed, and repair works had to be carried out. The issues here do not lie with us, as responsible managing agents, but with issues with the original development, which we have had to sort out.
This was another health and safety issues that was noted and had to be dealt with. We did obtain 3 quotes for this job and proceeded with the cheapest one.
The builder has not agreed to cover any of these charges. In addition, we have tried to claim for any repairs that we could against the new build insurance, but the claim has been rejected, for example the roof works were treated as storm damage by the new build insurance and were therefore not covered.
We do try to advise of works prior to them being carried out, but this is not always possible. A lot of these works have been reported to us by residents and so we have dealt with them. Other repairs are cyclical and are carried out periodically. If there will be any disruption to the residents, we will always do our best to advise in advance.
Leaseholders who do not fully appreciate that repairs will cost money, regardless of who manages the property and that properties cannot be left to be neglected. In addition, there are many laws that need to be followed, especially in regard to fire, health and safety, and that these cannot be avoided as these are for the safety of the residents.
We have explained above the large number of unforeseen repairs that have arisen in relation to the pumps, drainage and the roof. These are issues that were causing active damage to the property and to the residents and had to be dealt with. These could not be budgeted for, and it is unfortunate that they arose, but they had to be dealt with.
We do always try to respond to any complaints as soon as they are raised. We do intend for the charges to be lower this year, although of course this is subject to any repairs that may arise. The budget is also now more realistic, being based on nearly 2 years (1 full year) of services, which has allowed us to budget better as we now have actual costs to create the budget from. We have also implemented a system whereby if there will be a large deficit at the end of the year, that we do provide a pre-warning a few months before so that the leaseholder can try to budget for this or make some additional payments in advance to lower any potential deficit.
We cannot comment on the budget set by the developer, but we very often find that these are under-estimated in order to assist the sales of the flats. This didn’t include any management fees and was based on less services than were actually required at the property.
We have tried to make claims for any issues but as above these claims have been rejected.
It seems clear that a lot of the issues at this property are due to the development and the builder rather than us. We, as responsible managing agents, have simply dealt with the issues we have faced at the property, whilst ensuring that the property is maintained and compliant with the legislation.”
