Handling Service Charge for Legal Fees disallowed by Tribunal

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    Handling Service Charge for Legal Fees disallowed by Tribunal

    Morning guys

    Had some really good advice here before, I'm hoping to get a little more if you don't mind.

    Our block has been charged just under £40k in 'Legal and Professional Fees' over the last five invoices.

    An LVT ruling said that as there was no specific provision to extract legal fees from residents in the lease.

    When questioned on it, our managing agents suggested that any legal fees stored under here related to an LVT chargeback activity.

    Basically it feels a bit messy. Should this be challenged?

    #2
    Leases need to allow professional fees to be workable!

    I think we would need the exact wording of the lease and of the judgement. Unfortunately the judgement may be on public record, so might identify you.

    Comment


      #3
      Ha absolutely. We've no problem paying professional fees, I think I'm just wondering how/if we can separate out professional from legal fees.

      I'll dig out the lease and judgement. Appreciated.

      Comment


        #4
        How many flats in your block of flats ?

        Professional fees should what the Managing agent charges for managing the maintenance of your building for one year.

        Legal fees are paid to a law firm for legal advice in connection with maintenance of the building.

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          #5
          Professional fees would also include surveyors' fees for checking the building for defects, investigating reported problems (that turn out to be defects) and for managing major works. Leases are likely to distinguish managing agent frees from those, and they are not normally contained in the basic fees.

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            #6
            Hi guys

            Our block is made up of 24 flats.

            Our invoice distinguishes between 'legal and professional fees' on the one hand, and 'management fees' on the other. We've got no problem with the management fees, we're just interested in the difference between legal fees (which LVT says are not recoverable in the terms of the lease) and professional fees (which probably are - we don't want to challenge those anyway).

            Comment


              #7
              What the hell is a LVT chargeback fee !?. Sounds to me they are not payable, there is quite a bit of case law about this. Normally if a lease doesnt allow such fees, the FH will try and use the s146/Forfeit clause but this can be very limited.
              Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

              I do not accept any liability to you in relation to the advice given.

              It is always recommended you seek further advice from a solicitor or legal expert.

              Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

              Comment


                #8
                Originally posted by andydd View Post
                What the hell is a LVT chargeback fee !?. Sounds to me they are not payable, there is quite a bit of case law about this. Normally if a lease doesnt allow such fees, the FH will try and use the s146/Forfeit clause but this can be very limited.
                Previous residents had an abortive attempt to carry out RTM, which they cancelled after they received the freeholders' legal expenses (which he was entitled to claim). Residents failed to pay and I believe the freeholder is recovering his costs from the service charge.

                It might not be payable legally, but it is fair imo, and fairness is all we want. I'm just worried other more general legal fees (which cannot be recovered) are being hidden here.

                Comment


                  #9
                  Aha..although I doubt the legal fees for abortive work would be recoverable as a service charge as it isnt a service but would be recoverable maybe under the lease as an admin charge or recoverable not under the lease but as a civil claim.
                  Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                  I do not accept any liability to you in relation to the advice given.

                  It is always recommended you seek further advice from a solicitor or legal expert.

                  Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                  Comment


                    #10
                    That's interesting. I'll challenge this. Thank you.

                    Comment

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