FH says I'm in breach for not paying service charge demands not properly formatted

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    FH says I'm in breach for not paying service charge demands not properly formatted

    For the 15 years before our top-floor neighbour in this three-flat long-leasehold house acquired the one-man-band freehold company that owns the freehold of the whole house, we got on fine. She then demanded Ground Rent without using the necessary format so I asked her to use the correct one and when she did, paid it promptly.

    She then sent me service charges without the summaries of rights and obligations the law demands so I told her that they too must be in the right format or I can 'safely ignore' them. She added a large annual fee for managing the service charge (only one item, insurance) and ground rent (£50 twice yearly).

    I told her I felt the fee she added was too high, and that, if she sends me a legal service charge demand correctly formatted I will pay it immediately, pointing out that as soon as she did this with the Ground Rent, I paid that immediately in full. She just ignored me and started to send regular hand-written letters listing the outstanding service charges plus the high interest rate the lease allows for, with no statutory statements accompanying. I gently reminded her that, to be payable, the service charge demand needed to be in the correct format, as she had eventually done with the Ground Rent demand.

    She then undertook an S20 process (correctly as far as I can see) to have a huge repainting and driveway job done, and added 20% 'contingency' for various parts of it. She must have guessed, based on my lifestyle, that I would find it very difficult to pay my share - more than ten thousand pounds. She refuted most of my detailed comments and refused to even reply to my request to have the works verified by a qualified person in advance, or to have 'before' and 'after' photos taken. She refused a phone call, a meeting or mediation. She didn't reply when I asked her if her company had a redress scheme.

    She has now sent me an 'INTERIM SERVICE CHARGE' (payment due 21 days after she issued it) for my share of the S20 works and added a year's service charges (even though the service charges are not due till January of next year). It is a single page list of charges, not accompanied by the summaries of rights and obligations I understand are needed to make it legal.

    I pointed this out again and she then wrote to say that if the money is not paid within seven days she will issue legal proceedings to forfeit my lease, which still has 97 years to run.

    I'm feel harassed by these illegal demands and have told her so, repeatedly. She maybe doesn't realise that I live on the bare minimum state pension and all my cash is in equity less the interest-only mortgage. Being forced to sell to pay back the S20 loan I've taken out means having to leave to move to a rented place - not easy with no income.

    As far as I can tell reading these forums, if I apply to the FTT so as to get her to send legal demands to me so I can pay them it will cost £200 (that I might be able to get back as I'm poor if I win) but if I lose I will have to pay her legal costs too. I cannot afford any legal advice.
    It also seems that even if I win she can add her legal costs to the service charge. The FTT might tell her not to, but they might not.

    I am facing having to sell my home for works which could have been done far less expensively, but as I'll be being sued, the FH will prevent the sale and anyway I'll have to accept a price many thousands less - help!

    #2
    Hi,

    I would visit this page and call the numbers listed, email those listed or alternatively fill in the help form and see if they are in a position to help:

    https://www.leaseholdknowledge.com/

    Regards

    Comment


      #3
      Although you are technically right about the summary of rights, you are just antagonising her by insisting on you rights on that one.

      Section 20 is quite weak. The only possible issue is refusing to comment at all. It is not possible to tell, from here, whether you observations were valid, but before and after photographs seems very aggressive to me. If you are that concerned, take them yourself.

      You can easily check whether she is in a redress scheme. If you care, just report her to the council, if she is not and to the redress scheme, if she is.

      Comment


        #4
        Originally posted by leaseholder64 View Post
        Although you are technically right about the summary of rights, you are just antagonising her by insisting on you rights on that one.
        .
        Hi,

        You might be antagonising her by demanding your rights but the Service Charge or any added interest is certainly not due until the Summary of Rights has been issued. The lease may allow high interest rate but will not apply if the Summary of Rights has not been sent with the demand. The Service Charge demand is not valid without it. Make a telephone appointment here;

        https://clients.lease-advice.org/appointments.aspx

        leaseholder64 why not help the OP?

        Comment


          #5
          It looks like your neighbour is trying to get you out so that she will gain control of the property. What is the other flat owner doing? Does he/she agree with you or is he/she paying the demands? On the face of it, you are in the right to withhold payments but in the longer term eventually she will get it right. You should consider whether or not you want the ongoing hassle, it does not look like you are able to agree with each other and if she has control of the freehold, she is in the stronger position.

          Comment


            #6
            Originally posted by fos333 View Post

            Hi,

            You might be antagonising her by demanding your rights but the Service Charge or any added interest is certainly not due until the Summary of Rights has been issued. The lease may allow high interest rate but will not apply if the Summary of Rights has not been sent with the demand. The Service Charge demand is not valid without it. Make a telephone appointment here;

            https://clients.lease-advice.org/appointments.aspx

            leaseholder64 why not help the OP?
            I thought suggesting avoiding being over-pedantic and thus improving the relationship with the freeholder was a helpful suggestion. People who are aware of this rules generally already know that the service charge is not payable.

            I did actually point out that the service charge wasn't payable without a proper notice in another thread, yesterday, but in the current thread, my impression is that the OP has a feud with the freeholder and needs to try and calm that down by not being too pedantic.

            My guess is that the OP would risk having to pay costs if they went to a tribunal on just the summary of right issue, and that they would need more solid grounds for the section 20 work being unreasonable than have been presented here.

            Comment


              #7
              I tend to agree with leaseholder64 here, you may be able to score some points and insist on your rights but it is not going to help with the relationship with your neighbour. You should consider whether or not you wish to remain and if you do, you should try to improve the relationship.

              Comment


                #8
                In this case FH is paying a third, makes it harder to argue unreasonable costs.

                I suppose appointment of manager is an option, but that is likely just as bad.

                A management fee was mentioned, if this is essentially self management, would the lease allow that?

                Comment


                  #9
                  Thanks so much for your helpful replies, I really appreciate the time you take and the expertise so freely given. I can't see through my upset but if you think it is a feud then that's awful - not my intention to stray so far from ordinary civilised behaviour. I've really tried to return to amicability with her (suggested nice things, been helpful when taking parcels in for her etc) but I guess it's now far too late. Nonetheless, maybe paying all the money plus the high interest I thought she couldn't add will demonstrate that I'm not trying to avoid my obligations.
                  -----------------------------------------------
                  leaseholder64
                  "Although you are technically right about the summary of rights, you are just antagonising her by insisting on you rights on that one."
                  I've tried to offer compromises in a plea for amicability but she refuses to even acknowledge them - this is the only card I have to play. I have no leverage at all except the law. If I stand idly by as she breaks this very minor law, to me it just makes it easier for her to do all sorts of things that are technically not allowed, knowing that I cannot afford to object. Adding improvements disguised as maintenance. renewing every year rather than every five or six etc. I could have lived here for a very long time had costs not unreasonably increased by an order of magnitude I didn't predict and can't afford.

                  "My guess is that the OP would risk having to pay costs if they went to a tribunal on just the summary of right issue"
                  This is disastrous for me. It's the only way I had to try to persuade the FH to act reasonably and I was banking on it. It means that I'll have to pay way over the odds because I thought that, as is often quoted, demands without the summary of rights can be "safely ignored". I am a bit shocked that I've got it so badly wrong. On what grounds would I lose if this was my only point? Can I limit my liability by asking for a £100 'paper-only' judgement?

                  "... and that they would need more solid grounds for the section 20 work being unreasonable than have been presented here."
                  I can see that almost everything might be reasonable in legal terms, even though I am sure the work could be done better at half the cost. I'm ready to pay up because I have no choice and am looking forward to nice new shinyness. Would the FTT cherry-pick items in the works that I feel are unreasonable do you think? For example, the driveway is 25-year old tar macadam and she refused to let me patch it with my £12 B&Q patching kit. It could be restored at considerably less than the excavation, that also risks undermining the entire house. Could the FTT decide that "restoration of the tarmac is maintenance" and "excavation to laying resin-bonding is an improvement" and that I don't have tro pay for improvements like this?

                  "before and after photographs seems very aggressive to me"
                  Thanks, I never thought of it that way. I have taken photos and nothing seems needing this degree of work to me. The front looks practically new, with a few bits needing retouching etc. I don't mind if the house is repainted from time to time but not too often - modern paints properly applied should last decades - we're a suburb not exposed to weather extremes.

                  fos333
                  Thanks I will contact the Lease Advisory service but I don't yet know what to say to them? It seems looking at the thread replies that, even though I might be right about not having to pay until I get a valid notice, but could still lose at the FTT and have to pay costs. This would be a double blow because it will put most buyers off and so I'll have to reduce the asking price even more to find a buyer.

                  eagle2
                  "It looks like your neighbour is trying to get you out so that she will gain control of the property."
                  I agree - it occurred to me that, as it costs no upfront money to obtain estimates and issue S20 notices, maybe (she is a financial professional, I am not) that was her plan all along? I doubt it but it is possible I suppose. The other leaseholder is older than me and just wants a quiet life, so pays whatever asks and does not want to use email or get involved in, for example, buying the freehold or RTM unless we other two both agree. I've suggested it to the FH (and that we appoint a managing agent) but got no response at all.

                  "You should consider whether or not you wish to remain and if you do, you should try to improve the relationship."
                  I really have tried to improve the relationship but to no avail. Whatever happens, I don't want to leave it to fester and would like to return to at least exhanging the occaisional smile. I really want to stay but can't see how I can, I just can't afford to pay this big bill, let alone future ones that will result when I pay this one.

                  paulamis
                  "In this case FH is paying a third, makes it harder to argue unreasonable costs."
                  Good point, thanks. That hadn't occurred to me as I thought not of one year's money I had to pay but of many decades of her just reconciling three emails per year and passing on her accountants testimony (and fees).

                  "I suppose appointment of manager is an option, but that is likely just as bad." I think that would work very well, found a big one with a good reputation to ask for a price and gently suggested it (without pointing out that it would be cheaper than the fee she is charging) - no response.

                  "A management fee was mentioned, if this is essentially self management, would the lease allow that?" - there is nothing in the lease I can see that allows anything other than 'reasonable costs' - no fees specifically mentioned. Pleased to PM it to anyone who'd like to look at the PDF I made of it.

                  ----------------------------------
                  Once again, thanks very much - I'm gutted to think that I've got this so badly wrong. It stems I suppose from the fact that I dare not risk taking legal advice as I can't afford it. I have carefully studied this forum and other googleable places before acting. Thought I could rely on the law that says demands must be correctly formatted but clearly I have made a big mistake. I will have to give her everything she wants now and in future without question. I will have to move out in order to pay off my loan but accept it's my own stupid fault for not realising it sounds like a feud and for misunderstanding by thinking that the courts were likely to back me up.

                  Comment


                    #10
                    The reason that I think the FTT would not award you costs, if this was the only issue is that I believe they would consider your action vexatious. Not giving the proper notice is something you throw in on top of more substantial issues, to also be taken into consideration, not justification for going to the tribunal in the first place.

                    Regarding doing things yourself, do you have public liability insurance and proper health and safety plans?

                    The FTT is likely to look at lifetime costs, and so, if better materials will last longer, they may be considered an acceptable option. Improvements would be installing tennis courts in the yard. Incidentally, a very common complaint about councils now is they use cold fill tarmac to patch roads, but it doesn't last. That's because they are not allowed to borrow, because public sector borrowing looks bad for central government.

                    A before photograph is unlikely to show whether the paint is on the brink of peeling. You want to repair it before it actually peels.

                    You are allowed to propose your own contractor, but they need to be able to pass the pre-qualification checks.

                    In terms of deciding if something is overpriced, the FTT is likely to take much more notice of an estimate from a surveyor or from a contractor of the same quality as used, than the opinions of a leaseholder.

                    Comment


                      #11
                      Thanks leaseholder64 - I can sense the reasoned judgement of someone who knows what they're talking about in what you write.

                      You confirm that I could never have afforded to pay out for legal representation because the risk of losing is bad enough but even winning and not being awarded costs prevents me (and I guess all those without cash) from ever using the courts. We rely solely on places like this excellent forum.

                      My problem now is how to extricate myself from this mess of my own making. I owe the FH lots of money but I have borrowed, so I will pay her in full, plus 12% interest.

                      I'll do my best to make amends to the FH (don't know how, really) and hope she co-operates so as not to delay my sale as this means I definitely have to sell up. Be nice to have an 'all settled' statement from the FH but she's never provided any receipts. I assume that any potential buyer will have to know what has happened and not be able to be certain that it's all been settled.

                      Comment


                        #12
                        "I suppose appointment of manager is an option, but that is likely just as bad." I think that would work very well, found a big one with a good reputation to ask for a price and gently suggested it (without pointing out that it would be cheaper than the fee she is charging) - no response."

                        You can ask the FTT to insist on the appointment of an agent - but really don't, you will go from a FH with no right to charge to someone free to charge a lot, and they will charge for other things like s.20 too.


                        Imagine 1000+VAT a year management fee, a third for you.

                        Then to do the driveway, fee say another 500 possibly with a percentage, say 12%, all + VAT, then throw in perhaps a project manager...

                        And to be clear - I did not just invent those figures - they are actual for a similar set up to yours.


                        And if you think the asbestos survey is bad, just wait till you get the fire safety surveys and reviews, health and safety surveys, a very real possibility of having professional weekly fire alarm tests.

                        All of these things do need doing of course, but many just need a competent person doing them (after a professional has done the initial survey), an agent might well outsource them, very frequently.


                        So again - really do not go try to appoint an agent. A good agent will say sorry 3 units, there is not enough profit for them, a bad agent...


                        The only bright spot you have is that the FH pays the same as you.


                        PS Lease will give you free legal advice, but use the email method as following what they say on the phone is tricky, plus you can send it back and ask for them to explain bits of it further.



                        Comment


                          #13
                          Thanks paulamis. My dealings with the FH were based on the assumption, gained from this forum and other sources, that I'd was not liable for interest and would not have to pay legal costs because the FH did eventually agree to serve correctly formatted Ground Rent demands but then refused to serve me correctly formatted service charge demands.

                          For instance, I believed this LEASE advice:

                          "When a landlord demands a service charge it must contain the landlord`s name and address, an agents name and address is not sufficient. The demand must also include a “summary of leaseholders’ rights and obligations”. This includes details of such matters as a leaseholder’s right to apply to the Tribunal, as outlined above. "

                          "The law states that if the demand does not comply with either of these requirements, the leaseholder has a legal right not to pay unless and until the service charge is demanded in the proper manner." (from https://www.lease-advice.org/fact-sheet/service-charges)

                          I see from the posts above that I was wrong to assume that the FTT would endorse such a clear point of law.

                          I also thought the management fee and the S20 estimates were too risky and too expensive and thus unreasonable and that she couldn't smuggle improvements through as maintenance so I'd win those points too so felt comfortable in not paying.

                          However, I trust the advice from experienced posters here (you included) that I am wrong.

                          I have no way forward because I cannot risk losing at the FTT and the opinion here, which I respect, is that I will lose and am 'vexatious' (which I never consciously intended to be).

                          How can I trust the legal advice I can obtain, especially from LEASE? It won't be so clear cut as here, will it - LEASE won't say 'you'll lose' I guess, they'll only go as far as to mention that all FTT processes carry a risk of defeat, won't they? There are no material facts I have not mentioned, except that the FH says I must pay in full plus interest by next week or she will make sure I forfeit my lease.

                          I'm trying to create a form of words to the FH that will genuinely work as an apology (along with payment in full inc interest), in the hope that we can at least nominally resume at least neutral if not positive relations. I am wondering if it would help to offer her my flat (at a fair market price) or if not, the other LH. I actually doubt she can afford to buy it (otherwise she'd have moved to somewhere larger by now).

                          I'd thought that, if she knows I'm trying to move out, she could maybe somehow make me pay in other ways, like ruining it for any buyer I might get, as I have read FHers are able to do. She could just refuse to admit that I'd paid up, for example, which could ruin any sale. I have no way to prove that I've settled without her co-operation (sh'es never furnished any receipts) but that's probably my inaccurate take on things.

                          Comment


                            #14
                            I think the FTT would give judgement for you on the whether the service charge would be payable, but I would expect them to keep you £200 fee, on the grounds that it was a waste of tribunal time in the first place. They would also treat the freeholder as being at fault for not complying with the requirement.

                            If you get them on a good day, they may make the freeholder pay your tribunal fees, but it seems to.

                            The thing I find strange about this is that your headline is about the technical violation, when you should be more concerned about whether the section 20 works are reasonable. That makes me think this whole thing is a personal thing

                            You don't seem to be suffering any loss as the result of not having the statement of rights, as you already know what is in it.

                            Comment


                              #15
                              I suppose you could pay the demand and not the interest, stating it was not due as the money had not been validly demanded, the FH would then face spending hundreds to pursue the interest, so they would look vexatious.

                              The prime directive of the court system feels like avoiding work, they are hopelessly overloaded, you turn up arguing about a few hundred quid and they are not happy. If obvious black and white rule transgressions cannot be sorted out during disclosure or arbitration you might see their point.

                              Don't go there to argue over the pennies, just the pounds.

                              Comment

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