This is a negotiation situation I am working on at the present time. There is a meeting at the weekend which I can’t make so here are my suggestions, to the people attending
The situation is that a new block of flats that has been built, with an NHBC guarantee, and the ground floor keeps flooding. The builder, who are also the freeholders, are ignoring the requests to sort it.
In these situations you have to understand all the parties and all their interests. That is part of the preparation, then you can get a feel for the best way to handle it. The parties here are the owners of the 9 flats, the builders, the managing agents and NHBC ( the insurers of the building work). Four separate parties, all with different interests.
Here is my summary note – I will explain my thinking at the end –
“I think there are three issues reading all the correspondence I have seen –
1 – Clearly we need to pursue our remedies via NHBC – as that was the assurance that the property had been built properly and hassle free. As xxx said, we need to put a time deadline on it. I hope we can do that without a solicitor – if they don’t respond, I imagine we can. Has anyone experience with dealing with NHBCC?
I am not sure the agent is the right person to be pursuing this, as they are agents and are only being paid a relative small fee. However they are good so lets see what they come up with for our Chairman this week.
2 – The Ground rent issue. I recommend withholding the cash for the the time being but not making a big thing about it. It is a separate legal issue however as it is the same company they cant – want it one way and then not the other. It will get them thinking. They will claim it is two separate issues, as all companies do in these situations, we should claim it is not. I would not threaten it, as they will push back. It is just another reason to get round the table and negotiate with them to sort the real issue.
If they query my unpaid bill, I will say I haven’t seen it as I have been away, but I keep getting correspondence about the flooding from my neighbours and who can I speak to about that at the same time.
3 – As they have not invoiced the ground rent for three years – they cannot claim they need the money in 21 days. What I would normally recommend my clients to do is hold the cash back and if they get really stroppy just pay it. The interest on £1000 at 4% pa (which is in the contract is £40pa). Cash is king, it tends to hold some power in any bargaining situation.
If some people want to to pay the ground rent and feel more comfortable; that is no big deal. We will not pay ours until they respond and take action. The big deal is the shoddy issues of the flooding.
Once we are further down the track I am happy to meet with them and someone else if that is what is going to get things moving, and everyone is happy with that. Jaw Jaw not War War as a famous politician once said.
If a party in a negotiation is not responding, you need to create leverage. It is best to do this in the easiest and most effective way. It usually is not by threatening people. It is best that you point out the consequences gently. That is why it not a good idea to start threatening anything, threatening legal action – as that just gets lawyers involved and of course it is their interests to have a legal case. Why? They get paid more money.
In this case the withholding of the ground rent is probably an irrelevance. However it will create a discussion point and it may be useful.
The key issue is to get them to take action under their responsibilities. As they are off site and what needs to be done will cost money, I suspect they will dodge it as much as possible. The goal here is to get round the table and negotiate with the builders, so they understand we will pursue our remedies with NHBCC, if they dont fix it.
The Negotiation Speaker – www.derekarden.com – April 10th 2017