Unreasonable Administration Charge for late payment of GR

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    Unreasonable Administration Charge for late payment of GR

    Hello All
    Please can I have your thoughts. I am being charged administration charges for late payment of SC/GR by my Managing Agents. My case is slightly unusual: SC/GR are invoiced twice a year but I had paid for the year in advance. Unfortunately, I did not realise when I paid for the year in advance that I typed the wrong number which meant there was a shortage of £12 in GR. When I received the SC/GR invoice for the second half of the year - I explained to MA that I had paid for the year in advance and MA said that was correct + I could disregard the letter received.

    MA then sent a bill for administration charge (£25) which I initially ignored - as mentioned, I was unaware or my error which left a £12 deficit and MA had confirmed my account was in order so I assumed that the AC was an automated letter sent in error. I later received a 2nd AC with a higher amount and I contacted MA who mentioned the deficit - I then asked for my statement of account as this did not make sense to me. It was then that I became aware of my error. I tried to challenge this with MA but MA has been non-responsive and unprofessional and simply continued to add administration charges which now amount to almost £900.

    I have made payment in protest and now wish to challenge the administration charges with FTT on the basis that (i) they are unreasonable given the amount - the initial £25 is more than the amount due - this is now close to £900; and (ii) I was told to ignore the letter/invoice - had I been advised of the deficit at the time I would have paid this.

    It is clear MA made an error in telling me to ignore the invoice but MA have tried to whitewash this whole episode - they have made no reference to this in 1 or 2 occasions they have responded. Their only argument has been that the lease allows them to charge AC for late payment and I should identify what aspects of the lease I disagree with.

    I admit I made a mistake and have agreed to pay the £12 but refused to pay anymore. Although I paid AC demanded I told them this was a protest payment and will be disputing ALL the AC via FTT - I had hoped this would force them to look at this reasonably but they have ignored my letter so I am now forced to actually proceed with a claim to FTT.

    Please note - the lease allows MA to charge AC and the AC letters were all validly issued - there is no issue with that. My issue is I was (wrongly) told to ignore an invoice and it is not fair or reasonable for MA to now charge me AC and MA won’t respond on this specific point. Is that a reasonable/valid argument to present to the FTT?

    Your thoughts would be appreciated.
    ND

    #2
    Almost £900? Have they charged £25 a letter or has that AC increased each time so they are charging more? If £25 a letter has this been going on a long time or are they sending letters every week/few days?

    Have you paid the £900 or part of it?

    Comment


      #3
      Duckandcover1 - It’s been ongoing for 2 years. Yes, the Administration Charges increase if they’re not paid (I think it’s £25 then £120 then £270). These are AC for 2 years. I was paying SC/GR but all payments were put towards AC which meant my account was always in deficit. So I have paid them all now - otherwise i would be in breach for non-payment of SC/GR - but stated I was paying in protest and would approach FTT if they were not willing to agree a reasonable amount. They have not responded - hence my application to FTT

      Comment


        #4
        I can't work out if you are genuinely late payinformation he GR.

        in any event...

        1. GR only payable of correctly demanded in accordance with s166

        2 Admin fees can only be added on IF lease allows..many do not.

        3. Admin fees only payable if correctly demanded and accompanied by Admin charges - Summary of Rights

        4. You can ask an FTT if charges are reasonable. . £900 is not imo


        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


          #5
          They shouldn't put payments for SC and GR towards admin fees. .but to be sure..write on cheque what it is for.
          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


            #6
            You should have no difficulty in claiming that the charges are unreasonable, the manager has probably issued nothing more than standard letters to you.

            I would not have paid the full amount claimed, your maximum liability is limited to a reasonable amount.

            Comment


              #7
              Originally posted by andydd View Post
              I can't work out if you are genuinely late payinformation he GR.

              in any event...

              1. GR only payable of correctly demanded in accordance with s166

              2 Admin fees can only be added on IF lease allows..many do not.

              3. Admin fees only payable if correctly demanded and accompanied by Admin charges - Summary of Rights

              4. You can ask an FTT if charges are reasonable. . £900 is not imo

              This started over 2 years ago. The initial AC was for late payment but this was because of a £12 shortfall as I had entered the wrong number when making the transfer (fat finger error!) - so I suppose technically this was “late”... By the time I realised my error and tried to explain MA did not want to know and Just keep adding AC...

              Comment


                #8
                Originally posted by andydd View Post
                They shouldn't put payments for SC and GR towards admin fees. .but to be sure..write on cheque what it is for.
                MA do not accept cheques. They only accept online payments via bank transfer...

                Comment


                  #9
                  Originally posted by eagle2 View Post
                  You should have no difficulty in claiming that the charges are unreasonable, the manager has probably issued nothing more than standard letters to you.

                  I would not have paid the full amount claimed, your maximum liability is limited to a reasonable amount.
                  Unfortunately, this started over 2 years ago. I have continued to pay SC/GR but MA have used this towards AC which means my account is always in deficit at the start of the following period (when GR/SC are due - collected in March + Sept) and they start levying the AC all over again... This is how the AC have reached nearly £900... So if I did not pay the amount claimed I would be in breach of the lease for non-payment of SC/GR - I was continually told I was in breach of the lease if I did not pay...

                  I did offer to pay a reasonable amount in final settlement (£40) but they have not responded and continued to add late fees....

                  Comment


                    #10
                    Unreasonable administration charges cannot create a breach of your lease so the MA is incorrect if you have been told otherwise. If you are paying by bank transfer, you should send an email or letter to the MA stating clearly what you are paying and that your payments may not be allocated otherwise.

                    Comment


                      #11
                      Yes as eagle2 has said. .you need to tell them what payment is for..don't let them allocate it.

                      Does the lease make reference to fees for late payment..most don't. ? It almost certainly won't allow extra fees for late/non payment of extra fees.

                      Does the demand for admin charges have summary of rights attached ?

                      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


                        #12
                        Thank you very much - this advice has been really helpful.

                        I have read the lease carefully and there does not appear to be a specific reference to fees for late payment. There is a provision to charge interest at 4% above Barclays base rate if “any sum payable by the Tenant under this lease is not paid on the date it is due...”.
                        My understanding of this clause is that interest can be charged on the amount of SC/GR that remains unpaid when due but this is not the same as levying AC and extra fees for non-payment of AC?? MA has argued that the lease entitles them to charge AC but this is not the case?

                        Comment


                          #13
                          4% above base rate is still only a few quid...there is another recent thread with same issue..

                          https://forums.landlordzone.co.uk/fo...and-subletting

                          In that one that say legislatin allows them to charge admin fees even if not in lease..it does not !

                          Write to FH and say what clause in lease are they relying upon ?
                          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


                            #14
                            Thank you andydd. I had actually read that thread before my post but didn’t think it applied to me - I just automatically assumed MA had right to charge administration charges... so this has been really insightful...
                            Having said that, I have been going through all my paperwork and just found a letter from MA sent a couple of years ago where they said they were going to start charging administration fees for late payment - surely this letter cannot trump the lease??!

                            Comment


                              #15
                              The MA has no right to charge you administration charges because you have no contract with the MA. Your contract is the lease and you agree to pay the charges which are contained within the lease to the freeholder, not the MA. So if the lease does not permit administration charges, none are payable, if it does permit administration charges, the amount payable is restricted to a reasonable sum.

                              Comment

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