Need any helpful advice

[archer1204]

Last year I bought an apartment which was managed by an established management company.Soon they are about to be ousted by a committee of residents who think they can save costs.They were offering any residents to join them but i didnt have enough money to pay upfront.
They sent out a letter saying if anyone joined them then they would pay a lower service charge than other residents who didnt. Is this legal and do you know of any organisations etc who can help.I recently went to the CAB but unfortunately they werent able to help out much.any useful info be much appreciated.

[buildersmate]

One wonders how exactly this is proposed to work.

There is normally one management company for a block. What precisely gets managed may vary, but typically includes the external maintenance and common parts of the block (i.e. those parts under joint ownership by all residents, such as the gardens). Now if part of the group gets the maintenance on their bit done one way yet another group does something else, how does that work? What happens to external painting, for example.

I think you'd better ask the breakaway group of residents what exactly they are proposing and why upfront money is needed anyway. What for? - maintenance is paid for as one goes along.

I'm surprised CAB can't help - this sounds like a legal issue, around how the residents are set-up constitutionally for determining how maintenance is undertaken.

[johnny37]

I dont know how leasehold works but I assume the management company has some sort of legal status. I would guess that the new managmeent company are buying them out (ie the up front fee). This then gives them the right to give themselves a discount. Join them if you can come up with the cash

[buildersmate]

I agree Johnny. Some of these are set up so the management company cannot be changed (often the builder of the complex sets up a maintenance arm to provide an income stream in perpetuity); others the control of the maintenance is controlled by voting rights of the leaseholders.
But if the residents are proposing to 'buyout' the existing, one wonders what they are proposing to do for those that choose not to cought up - can't just leave them in fresh air.

[archer1204]

Yes they plan to buy out the management company for about 400K thats why they are asking the money upfront so then they dont pay any ground rent and they have the freehold of the building instead of leasehold.The ground rent runs at �250 per year but if theres a problem with the complex theres 4 buildings of about 100 apartments they were built into 2002 so the leasehold still has 119 yrs on it.So if theres a major expense with the buildings then they are responsible like major leaky roof etc thats why im staying as a leaseholder.As for CAB they just redirected me to Shelter who i will be going to next but i just wondered if there are any organisations etc or people who have experienced this situation.Also as they are leaving mainstay the managing agents they have to renegoiate all the contracts like maintenance of lifts etc.Thnx again for the responses so far.happy xmas

[bednobs]

How many residents/flats are there? 400k seems like a lot of money unless its shared between a lot of people! and if you were to move or sell the flatwhat good would your investment in the lease have been?

[buildersmate]

I'm a bit confused as well, BN.
There are 100 flats - man says so in his second post. So if its �400k for the freehold of the land on which 100 flats are sitting on, that's chickenfeed - �4k per flat. If no development land is surely worth so little anyway in the OK - we must be talking an acre of city/town centre land presumably.
If its �400k per flat, that's �40m - which might be OK if it's London.
To me it neither sounds one thing nor the other.

[archer1204]

Not all the apartments have agreed to this agreement and also there are the court costs etc to take into account.Thats why they are looking at 6k per apartment to pay for the freehold of the building.
Its more to do with them taking over the management of the buildings concerned from mainstay.They seem to want to cut the expenses of the service charge by getting rid of the concierge etc that will save 40k but they do a very good job with maintenance security etc.The apartments are based in nottingham.hope this explains more any other helpful responses welcomed.