Posted by AndyS (Director's Hat on) on December 23, 2007, 1:14 am, in reply to "Re: Managment fees from R&R"
Message modified by user AndyS December 23, 2007, 1:17 am

A Section 20 notice is issued as a notice that works may be carried out. In this case it is highly likely that they will be carried out. In response to a few points : 1. Should the anticipated cost of this have been spread out over 20 years? To be honest, the lifts serve the people who are resident at the time that the lift is serviceable, so theoretically I take your point on board completely. However, in a siuation where a lift becomes unserviceable within its anticipated life it is very difficult to say who should pay for what. In an ideal world of course, we could bill people in arrears of course for how long they lived there or how many floord they travelled up, but this is not possible. 2. As to external financing, it is very difficult to obtain. There are three reasons for this. First, we can't do it because you cannot get secured financing against an item like a lift because it is attached to the building. Therefore, there is no security for the lender. Secondly, we cannot secure against the buildings as that would be prejudical to shareholders as they would be in a disadvantaged position vis a vis the leaseholders. Thirdly, unsecured finance is not possible unless each individual leaseholder is willing to guarantee personally the loan and then sell on that obligation to their sucessor - something that is practically impossible. The demand is not unannounced unintentionally. It is simply that we put in a lot of hours over the last couple of weeks looking into this and until just before the letter was issued we were hoping to reach a better conclusion. I would strongly urge people not to withhold service charge on the basis of this demand. If people have suggestions then I am happy to look into them. I work financing capital assets and have been unable to procure a solution that will help. If someone has a better idea then please let us know and I will pursue it by whatever means possible. However, withholding service charge will not benefit the leaseholder and will not benefit BWFL. If there is a financially better solution then money will be refunded/allocated to the reserve fund.

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