| Re: Managment fees from R&R
Posted by David on December 23, 2007, 12:06 am, in reply to "Re: Managment fees from R&R" Message modified by user CD December 23, 2007, 12:22 am
Andy, Thank you for your response. The key issue here is the spread of the cost. The lifts were going to fail sooner or later and their replacement (or replacement parts) would always need to be funded. It would be a fair point to say that this far into their lives, the reserve fund of the block should be at a level to deal with this. If they were expected to need replacing after 20 years, then now (18 years in) properly managed reserves should be able to pay at least eighteen twentieths of the cost. Given that this is not the case, I feel very strongly that it is not for the current leaseholders to pay in advance for replacement of the lifts, as this would mean paying for an asset that has long-term benefits to BW – i.e. long after many of the current lease holders move on. One of the points of a reserve fund is that the cost of these major purchases is spread across all the leaseholders that will benefit from that asset. That means all the leaseholders over the 20-year lifetime of the asset, not just the ones in situ on the day of break down. Therefore, if the reserve fund cannot fund the replacement, then the directors of BW must look for external financing. Asset financing is usually secured on the asset in question – i.e. the new lift, as opposed to the entire block. I believe it is necessary at this time for the directors of BW to write to all leaseholders of the Charthouse, withdrawing the demand for the lift levy at least for the time being. I do not believe that a clear plan of action exists, in that there is not a clear specification for works nor quotes for that work. You mentioned in your reply that you were still looking into various options and that confirms to me that it is very unreasonable to place such a demand for cash while there is no immediate need for it. Further more, without completion of the Section 20 procedure, there are no legal grounds for a leaseholder to pay at this time. The directors should act promptly to avoid a full on fight with the leaseholder/shareholders they represent. They should then actively pursue all avenues to resolve this issue, as sneaking in an unannounced demand on the last working day before Christmas, with a due date being before the first working day of the New Year, could be interpreted as sneaky and underhand. I will now be out of web range until after the new year. I have already written to R&R to confirm that my service charge will be paid on time, but that I will not be paying the lift levy until further consultation has taken place. I strongly encourage my neighbours to do the same. David
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