Money: A fight with the landlord needs firm foundations

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The Independent Culture
Like a love affair, the relationship between leaseholder and landlord can sour - especially when the landlord wants to call in the builders. Karen Woolfson explores ways of keeping control of the costs, and the options if things go seriously wrong.

Readers who suffer from abusive landlord syndrome will easily recognise the trait. One leaseholder describes the "syndrome" as a freeholder who uses underhand tactics, is uncomfortable with plain facts and exploits situations for his own gain. In some cases, this individual may pocket money he is not entitled to and exhibit rage when his actions are questioned.

This type of landlord can be particularly difficult to handle when it comes to refurbishing your building, so it would be wise to familiarise yourself with the legal procedure managers are required to follow before carrying out major building works.

One leasehold flat owner who lives on the outskirts of London has learnt the hard way. His freeholder applied for planning permission to build additional flats on the roof and to extend the front of the block. At the same time, leaseholders were sent a bill for around half a million pounds for extensive refurbishment of the building. The secretary of the residents association alleges the freeholder included charges for works being done for himself.

The leasehold flat owner also claims that the landlord failed to follow the consultation procedure, which is a legal requirement if the building work costs pounds 50 per flat or pounds 1,000 in total, whichever is the greater. Tenants must be informed that the work is going to take place. At least two estimates for the works must be obtained, one from a person who is wholly unconnected with the landlord.

Each tenant must be given a copy of the estimate and at the same time receive a notice specifying exactly what building work is being suggested. In large blocks, this information can be displayed in a place where all the tenants will notice it and an additional copy must be given to the secretary of the residents association.

The notice must describe in detail the works the landlord wants to carry out and invite observations on them and on the estimates. Leaseholders must be given at least one month, from the date on which the notice and estimates are received, to respond with observations. The law states that the landlord must have "regard" to all observations received.

Gerry Fox, managing director of Fineman Lever, the property management group, says that if the landlord fails to pay regard to the tenants' comments and observations, then it may not be possible to recover costs incurred. He says the consultation procedure for building works should be a decision- making partnership.

Fox chaired the working party for the RICs statutory service charge residential management code which was approved by the government and came into effect in March this year. He says the code can be used in evidence in civil and criminal proceedings.

Fox also says: " It is essential for managers to pay by cheque and obtain proper receipts for everything."

Richard Hickey, a chartered accountant, says it is rare for landlords or managing agents to pay in cash for anything, even very small bills. He adds: "Building works paid by cash would ring all the alarm bells."

Readers with difficult landlords may find it useful to obtain a copy of 'The Service Charge Residential Management Code' (pounds 9.95) from the Royal Institute of Chartered Surveyors' book shop.

Karen Woolfson welcomes letters from readers for her column. Her address is Homebattles (care of Nic Cicutti), Personal Finance Section, 'The Independent', 1 Canada Square, Canary Wharf, London E14 5DL. She regrets that she is unable to reply personally to all letters.