A new lease of life: - CentreForum

A New Lease of LifeThe tribunal found the fees to be “inappropriate” anddetermined what it felt were reasonable management fees inthe circumstances. The difference between the actual chargeslevied and those deemed reasonable are listed below.Table 1: Discrpency between actual and tribunal chargesYearInitial servicechargeTribual approved‘reasonable’ charge2004 £548 £330 40%2005 £630 £340 46%2006 £633 £350 45%Overchargingof actual chargeCase Study 4: Retirement apartments 62Having finished his working life, Frank Gadd purchased atwo bedroom retirement property in Hampshire. He used asolicitor to oversee the purchase of the maisonette whichwas one of four within the development. Soon however,his life became “grim”, as annual service charges reached£4,400. Although he wanted to challenge the costs at an LVT,the other three leaseholders did not want to go through thestress and costs of pursuing the case to a tribunal.Instead, to cut their losses, the leaseholders decided to buythe freehold to their property. Mr Gadd hired a solicitor whostated that his agreement was heavily slanted in favour ofthe freeholder, who also happened to be connected to theproperty’s managing agent. Mr Gadd had been unaware ofboth of these facts after the initial conveyancing process.Eventually the four leaseholders made an offer to buy thefreehold, which the freeholder rejected, demandeding a farhigher price. Exasperated and keen to avoid additional costsof going to an LVT, the leaseholders relented and agreed topay the price requested.Having enfranchised, Mr Gadd’s service charges have nowdropped from £4,400 to just £200 a year. Mr Gadd’s experienceillustrates that there is a lack of transparency when managingagents are linked to freeholders, and that the LVT is too higha hurdle for those in the most vulnerable positions.62 Case study from Patrick Collinson, ‘Peverel property management faces tenantrebellion over service’, The Guardian, 12 February 2011, and reproduced anddeveloped following authors’ interview with Mr Gadd.36