Absent Freeholder and Leaking Flats
Leasehold tenure has been in the mainstream news for quite some time now due to the efforts of campaign groups such as the Leasehold Knowledge Partnership and the National Leaseholder Campaign highlighting the gross unfairness of the tenure. Onerous ground rents, third party management problems and with the balance between profit and ‘reasonableness’ becoming ever wider, leasehold has also been recently announced as being included in the Law Commission’s 13th Programme of Legal Reform. My story also highights some serious issues that then (as of now) are not widely reported, coming as it does from the angle of our block of flats having an absent freeholder, negligent agents and the building suffering years of degradation.
It starts with me moving into my partners flat in an East London block toward the end of 2003, a flat he had purchased as a long leaseholder in 1989. I was horrified at the state of the kitchen due to years of water ingress from the roof and water tanks running down a load bearing wall and I decided do something about it, as my partner was in full time employment.
Little did I know this decision would be the start of a project which would cause many tears and sIeepness nights but we had to find a way to protect our interests, i.e. our flat. So, the first thing I did was to start digging for the whereabouts of who owned the freehold. I couldn’t find the freeholder at first so I had to start with the managing agents. After several e-mails sent to various addresses and some telephone calls, someone eventually came to visit us in the first quarter of 2004.
We were given the impression that if we paid some service charge arrears then we would at least get our part of the roof fixed. However, the demands that had been received up to that meeting had been very sporadic over earlier years so I wasn’t really sure exactly what was owed. It was at this point that my research into the leasehold sector really began.
I established roughly how much we were liable to pay under the 18-month rule and we started to make small regular payments. However despite the assurances that the work on our part of the roof would start, we received no receipts and no work was carried out! Even when we reduced payments for a short time, trying to get some communication, they didn’t even ask why!
Absent freeholders cannot meet any of their covenants (promises) in the lease and further research revealed that not only was the freeholder an individual in jail for Customs and Excise fraud but that the so-called managing agents were his daughters. Both parties were responsible for opening and closing many other businesses over a number of years, 15 of which were dissolved. There were more but I ran out of (my) money researching them. Additionally they had left a large number of (mainly) unsatisfied County Court Judgements in their wake.
Note: Another block of flats that he was the freeholder of also experienced major problems which can be read about here.
We then decided to seek the advice of a solicitor for which we paid for out of our own pocket. Not only were we advised that it would be potentially expensive to the agents sue for breach of contract, but we were also told there was also no guarantee we would be successful!
COMMUNITY PROTECTION OFFICER
In the beginning of 2005 and in desperation, I approached the council for help and we were assigned a Community Protection Officer. She carried out a thorough inspection of the roof, writing reports and taking photographs. This led to her serving a notice on the agents under s190 (1a) of the Housing Act 1985 (notice to execute repairs to a part of a building containing a flat in a state of disrepair but not unfit).
The notice said that our flat was in such a state of disrepair, the condition of the part of the building outside our flat, (consisting of the water storage tank above the flat, the roof area below the water storage tank and the roof area above the front door), was such as to interfere materially with the personal comfort of the persons occupying the flat. This did not only apply to us but to all the other flats immediately beneath the roof. As the persons having direct control of the part of the building concerned, the agents were required under s180 (2) of the Housing Act 1985 to carry out the works specified in the Schedule to the notice and to complete them within 3 months.
Later notices also fell on deaf ears because due to a family rift they said the block was nothing to do with them! This denial went on for about 10 months until we were told by the council that we were not entitled to any help as we were long leaseholders! This made me furious as we had told them right from the outset that we were! As far as they were concerned there was nothing further they could do!
This was when I decided to contact my (then) local Labour MP to see if he could help.
BARONESS ANDREWS REPLIES
After writing to the Office of the Deputy Prime Minster about our situation, our MP received a reply from Baroness Andrews. She said that it was precisely because of similar situations to ours that the Government felt it was necessary to introduce some wide-ranging provisions to strengthen the rights of leaseholders through the Commonhold and Leasehold Reform Act 2002. She went on to explain what those measures were and what the terms of our lease should explain. She also said that if freeholders fail to turn up to court this should not prevent a repair order being issued.
Baroness Andrews then went on to say that council powers were further strengthened by the Housing Act 1988 which need a landlord to start work on a certain date and stipulate a completion date. A landlord could also be taken to court for failing to comply with a repair notice and it’s not just council tenants who can get the council to take such actions.
She finished by saying that we may wish to make a complaint to the council and, if dissatisfied with the response, we can then escalate our case to the Housing Ombudsman.
A response also came from the Council’s Housing Standards but that only confirmed what steps were carried out in 2005 and that I had been informed that nothing further could be done. As far as they were concerned, the case was closed!
I still felt that our situation hadn’t been properly addressed under the circumstances so I again wrote to the Council Leader and copied in Baroness Andrews asking the following question: As she had stated that the powers of the Council were increased under the Housing Act 1988 and we didn’t need to be a council tenant for the Council to take action, why was our situation not being pursued?
I also drew attention to the ‘prejudical to health’ element of the first notices sent to the managing agents by the Community Protection Officer and said that surely having no lights on the stairwell would come under the Council’s remit especially as a resident had sustained two broken ankles as a result!
I finished by asking why there was no available legislation to impose immediate penalties on the managing parties.
I received no further reply from either the council or Baroness Andrews so, in attempt to get the other lessees to help, we returned to our solicitor who sent a letter to each of them (at least those we had alternative addresses for) of our concerns that the lease obligations had not been fulfilled by the landlord and his managing agents. I had also established that the block buildings insurance had lapsed and if there should be a fire there would be no money to repair or reinstate the building, affecting all their interests. They were all asked to take the matter up with their own lenders as soon as possible.
The letter went on to state that there was clearly an urgent need to repair various parts of the building and three points were highlighted:
- The roof is in need of urgent repair and despite repeated requests to the managing agents no action has been taken. Whilst it may not immediately affect you, if not repaired it will harm the building as a whole during the course of time;
- The water tanks need replacing;
- There is a crack in the wall of the building which is widening and may cause that wall to fall over, possibly injuring someone or at least damaging the building. Even if it does not fall over it needs to be repaired as soon as possible.
The letter finished by advising that whilst the local authority was looking into these matters this takes time.
Unfortunately only one leaseholder responded!
A very heavy storm then led to us again to ask for help from the Council and what happened next can be read here.