Unsure what a sinking fund was, Andrew explained to Becky (a first time Buyer) why such a fund is normally set up, and how it is meant to be used.

After checking with the conveyancing solicitor, it was established that no such fund existed for the apartment she was buying, meaning that there were no reserve monies set aside for future major expenditure on the property.

Andrew then checked how repairs had historically been agreed and funded between the Leaseholders, and briefed Becky accordingly….so that she was fully informed on her potential future liability before she completed her purchase.

Regrettably, Managing Agents sometimes fail to produce a realistic forward plan for leasehold properties (especially flats), meaning that the sinking / reserve fund is insufficient (or in this case non-existent) to meet the cost of future major maintenance and repairs. It is therefore important that Buyers ascertain whether such a plan exists, when major works are likely to be required, and how these are to be funded?

The apartment Neil was looking to buy, was one of four located in a converted listed Georgian building. The Vendor, who was also the Landlord of the whole building, offered Neil (and the other three Leaseholders) the freehold.

Neil believed that having a share of the freehold would be beneficial as it would enable him, and the other 3 Leaseholders, to self manage the property and so have greater control over future repairs and associated costs.

Andrew was asked to advise on the “pro’s and con’s” of self management, how to set up the new management Company, and provide draft Articles of Agreement for the 4 Owners to adopt thereby providing them with a framework for future decision making.

Self management may seem like an attractive option for Leaseholders, but there’s a great deal to consider….so make sure you understand what is involved before taking on this responsibility!

Rogers apartment formed part of a “over 60’s” development, the maintenance of which had been contracted out by the Developer to a separate managing agent.

After reading the marketing material for the property, Roger believed that the ground rent he’d be charged would be used to maintain the communal areas. He also understood that there would be a separate maintenance charge for looking after the gardens.

However, when the charges came through it was apparent that in fact there were no services being provided in respect of the ground rent, and that the cost of looking after the communal areas (as well as the gardens) was being added to the maintenance charge….which was not what Roger (and the other Residents) had understood would be the case when they bought their properties?

Andrew therefore read through all the relevant documentation, and had to advise that, as a result of just one single word hidden deep in the Developers literature, the charges were in fact being correctly applied….the ground rent was just that, a rent, for which the Residents were not entitled to receive any related service. All costs associated with the upkeep of the property, including the communal areas, were correctly included within the maintenance charge.

It is vital that you read all the documents very carefully, so that you fully understand what is included in any fees you will be paying post-completion. In this instance, literally just one word, resulted in a very different interpretation to that which the Residents had assumed.

David’s flat was one of 5 purpose built leasehold properties, the management of which was directly handled by the Landlord.

All maintenance costs associated with the communal areas and building fabric were to be equally divided between the 5 units. However….

One day David received an unexpected email from the Landlord, saying that a pipe emanating from his apartment was over flowing and discharging on the patio area of the flat below…and that he was therefore solely responsible for getting it fixed and bare all costs. But was this correct?

Andrew reviewed the Lease, and identified that if a pipe served more than one property, then it was considered to be “communal” and the cost of repairing it should be divided equally between all 5 apartment. Andrew drafted an appropriate email for David to send to the Landlord, who (eventually) acknowledged that he had been wrong. Consequently, the pipe was repaired and the costs divided equally between all 5 units….meaning that David’s liability was reduced by 80% from that which he had originally been told!

Knowing where to find, and how to interpret, the relevant clauses in your Lease can be tricky….so asking for help could potentially save you a great deal of money!