Managing Agent Penalty Charge

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    Managing Agent Penalty Charge

    Hello

    Over the past five years, the managing agent of our apartment block has applied a routine "penalty charge" of £15 (just gone up to £30) against any leaseholder more than a few weeks late in paying their service charge bill.

    (Even though they themselves failed on every occasion to supply requested summary accounts within anywhere near the required timescale and this being the reason why leaseholders were late in paying in the first place).

    It appears that the managing agent pockets the charge, presumably by way of covering the supposed administrative costs in sending the letter.

    It has now come to light that every one of the demands that they have sent out to date has been wholly wrong as regards the quoted Landlord, likewise the quoted address for the serving of notices. I understand that such an oversight would ordinarily render bills as not payable until the mistake was rectified. (?)

    If that is so, would leaseholders in theory be entitled to retrospectively demand repayment of any £15 penalty applied.?

    Graham

    #2
    1. What does the lease say re such fees?
    2. Did the agents comply with s.158 of (and Schedule 11 to) the 2002 Act, once it came into force?
    3. Money paid under a mistake of fact or law is usually reclaimable. There may be a six-year time limit on reclaim.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Jeffrey

      Thank you for your response.

      1. The lease makes provision "to pay interest at the rate of 4% above the Allied Irish Bank Base Rate on all sums unpaid for 14 days and payable by way of rent or service charge which shall be in arrear from the date due until the date of actual payment.". This, I presume is the applicable penalty for late payment and I have always assumed it was set as such to offset any potential cost incurred should borrowing be required by the Residents Management Company or Lessor in order to honour its own committments.(?) I cannot find anything in the lease as regards a managing agent being able to charge.

      2. No - they have never complied with S158 requirements as far as I can tell. It is only when leaseholders receive service charge account statements that they find "late payment" debits itemised. In fairness, though, most of the charges were levied pre-S158 coming into effect.

      3. This is of interest. Is there any specific piece of legislation I should be checking up on about this.?


      Graham

      Comment


        #4
        Originally posted by Graham Winter View Post
        1. The lease makes provision "to pay interest at the rate of 4% above the Allied Irish Bank Base Rate on all sums unpaid for 14 days and payable by way of rent or service charge which shall be in arrear from the date due until the date of actual payment.". This, I presume is the applicable penalty for late payment and I have always assumed it was set as such to offset any potential cost incurred should borrowing be required by the Residents Management Company or Lessor in order to honour its own committments.(?) I cannot find anything in the lease as regards a managing agent being able to charge.
        The interest is payable on arrears of ground rent and service charge, true, but the 'penalty' is neither of these.

        Originally posted by Graham Winter View Post
        2. No - they have never complied with S158 requirements as far as I can tell. It is only when leaseholders receive service charge account statements that they find "late payment" debits itemised. In fairness, though, most of the charges were levied pre-S158 coming into effect.
        The 'penalty' demands made after 30 September 2003 (inc. earlier unpaid penaties re-demanded thereafter) fall foul of the 2002 provisions. On/after 1 October 2007, an SI prescribes the information which L is required to send with the demand in accordance with paragraph 4 of Schedule 11 to the Act.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment

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