Landlord is threatening with legal action for £600 of service charge arrears

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Landlord is threatening with legal action for £600 of service charge arrears

    Hello,

    I would appreciate your thoughts on the following situation.

    Long lease over the flat. In 2011 the freeholder sold his interest and new freeholder appointed Managing Agents (MA). Their first bill to me was already around £250 in arrears. Upon my enquiry (unfortunately, this email has not survived the time) about it MA's was 'we do not know where it came from but you have to pay it'. The cover letter states the same, I have got a copy. Never paid it.


    Back in 2014 I received a random invoice from them for £1500 AFTER I paid my service charge for this year. No cover letter came with it, I have a copy. At the time I simply ignored it but I know a few people in the block received the same invoice.

    From 2011 up until today MA added around £50-100 every year. Cover letters always state 'as you see, some people got balancing charges and some got credit to their accounts'. Chased them a few times about it - no explanation (don't have these emails). In January 2018 MA added 'debt collection fee' of £145. In August 2018 I contacted them with a complaint, first they removed this 'debt collection fee' saying 'this is the first time, so I will remove those from your account'. I asked them to explain the rest, why they constantly add monies to my account and explain why I need to pay £250 initial sum they put back in 2011. As the reply, MA wrote to me how service charge system works. I have asked to remove those charges but got a reply 'those very levied as per terms of the lease'.

    Escalated to the director, got a very aggressive letter saying I have to pay, otherwise they are instructing solicitors and I will end up having to pay 'thousands of pounds in fees'. He also said that he instructed his guys to put £145 debt collection fee back to my account. I replied saying this is extremely unreasonable and bullying tactics, costs order may be awarded against any party by a court, so there is no reason to infer it will be me. Enclosed a copy of 2014 invoice, asked to explain everything.

    Got another aggressive letter where my correspondence was called 'rubbish', 2014 invoice is fine and I should have enquired about it back in 2014, no comments were made on why this invoice later disappeared and was not recorded as arrears. MA gave me a few weeks to this if I want to obtain a legal advice, otherwise they will serve proceedings on me. He also said that there is a rule that this matter can only be resolved by litigation - silly, I know but this is simply to show how unreasonable they are.

    I intend to take legal advice, of course but would appreciate a few thoughts from you. I have noticed there is a clause that explicitly prohibits freeholder to levy charges connected with arrears but there is a 'catch-all' clause which includes legal fees.

    I will provide a copy of my clauses later.

    Thanks a lot in advance.

    #2
    You should refer to your lease and ensure that the freeholder is operating the service charges properly. It is unusual for additional service charges to be required annually but that could mean that the estimated service charges are unreasonably low. The service charges must be reasonable and you are entitled to know what they are for and how the service charge monies have been spent.

    Any other charges are administration charges which are only permissible if the lease permits them to be charged. If the freeholder is allowed to make these charges, they should be reasonable and the demands must be accompanied with a notice of tenants rights.

    Comment


      #3
      Firstly, I hope that you will make sure that you keep copies of all correspondence that you have with freeholder or managing agent in the future - especially if you are being asked to make payments and you don't pay.

      If you had copies of the emails you say that you have sent/received, and they say what you have said here, I would think that it would be very easy to get a court/tribunal to rule all debt collection and solicitors fees as unreasonable and that the freeholder would be told that they should have explained the charges at the time they were demanded (even if they are considered to be reasonable charges).

      If I was you, I would write to the freeholder and managing agent (same letter to both, sent by recorded delivery) pointing out that none of the original amounts that have been demanded have been explained, despite the fact that you have asked, and you are therefore again requesting full explanation of the charges.
      It may be worth also asking them to forward copies of all communications that they claim were sent, including copies of covering letters and everything else that was included with the invoices.

      When you are sent invoices, do they include all legally required information (e.g. freeholders name and address, copy of the correctly worded summary of tenants rights and obligations)?

      It might help if you post the exact wording of any clauses that you think are relevant to legal fees/admin charges.

      [reposted with minor corrections - flagged as spam when edited]

      Comment


        #4
        You say emails gone, did you actually delete them, most people use google etc, they store you email for a very long time, even in the bin.

        That is not a real drawback, you can issue a subject access request to see all the communication with or about you.

        I feel I recognise the style, is the MA director called George by any chance

        Comment


          #5
          Hello,

          First of all, many thanks for your quick replies. I did not expect it and it is amazing people are willing to help.

          1. Their debt collection fee invoice came without any summary of rights and obligation, so I understand this is not valid.

          2. Save for a few emails back from 2014-2016 where I asked them about those extra monies, I do keep all the emails/letters from this year. I must admit that it is extremely difficult to extract any information from MA, their answers are very vague and generic. I tried to ask them why some people get credits regularly and others get charges and their answer was (and is) 'it is dependent on percentage people contribute and whether there was a credit or debit'. I have tried to explain what paperwork I have as precisely as possible.

          3. All their invoices clearly show all the necessary information, so no problem here. The only concern is 2014 invoice which came without any cover letter, even though it has date,no and all the freeholder's details. However, as I pointed out, this invoice later disappeared and did not go into arrears. I asked them a few times about it and got a completely irrelevant answers. Still chasing them about it, even though they indicated they do not intend to communicate about it.

          4. I used a mixture of emails, incl. gmail but did not find anything there. Thanks, I will think about subject access request. Let's keep away from names just in case

          5. Here are some interesting clauses from my lease:

          Service Charges - All Sectors - 'running and management of the Estate and the collection of the rents and Service Charges but for the avoidance of doubt this paragraph shall not apply to costs and expenses incurred in the collection of arrears'

          'Employing a qualified accountant for the purpose of auditing the accounts in respect of the Service Charges and certifying the total amount for the period to which the accounts relates'

          'All other expenses (if any) relating to the Property incurred by the Landlord in and about the maintenance and proper and convenient management and running of the Estate including in particular but not limited to the generality of the foregoing any interest paid on any money borrowed by the Landlord to defray any expenses incurred by it and specified in this part any costs imposed on the Landlord in accordance with Part 10 any legal or other costs reasonably incurred by the Landlord and otherwise not recovered in taking or defending proceedings (including any arbitration) arising out of any lease of any part of the Estate or any claim by or against any tenant of the Property or by any third party against the Landlord as owner tenant or occupier of any part of the Estate'

          Moving to the Service Charge - Leaseholder's Proportion section:

          'the certification of the accountant referred to in Paragraph 5 of Part 9 shall (subject as hereinafter mentioned) be binding on the Landlord and the Tenant'

          There is also an arbitration clause under which, if there is a dispute, it can be referred to RICS and it will be binding.

          Also, I am trying to understand whether it is normal practice to refuse sending invoiced over email/post?

          It seems to me that MA have some cause of action and may succeed to a certain extent but what I do not like it their threatening language, vague answers to specific questions, 2014 invoice and their desire to litigate only.

          Hope it is helpful.

          Comment


            #6
            With most long leases, the only safe way of sending demands is on paper. I think the lease would need explicit clauses on electronic delivery of notices, otherwise. If you agree to electronic delivery, the means will be determined by your agreement, but even then, without a clause inte lease, would not rely on electronic delivery alone.

            Arguably, the requirement for at least 10pt type in the statutory notice of rights, implies the use of physically printed media.

            (Even in company law, if you opt into receiving certain communications by web site, either an email or real paper have to be used to inform you that information has been updated.

            Comment


              #7
              Thanks! Yes, I understand that it is better to have something on paper and this is why I write letters to them.

              Does anybody know whether section 21 and 22 of Landlord and Tenant Act 1985 is the only way to get the information about Service Charges? I must admit that one person from MA invited me to visit their office but I rejected this since the dispute was escalating. Now I am going to ask them to do it since they are obliged to do it but not sure whether they will provide all the paperwork starting from 2011.

              Comment


                #8
                You can get free advice from LEASE ( www.lease-advice.org )

                https://www.lease-advice.org/faq/my-...-act-1985-wha/

                Where a landlord fails without reasonable excuse to comply with either a request for a summary or to inspect supporting documents they commit a summary offence on conviction and are liable for a fine of up to 2,500 (level 4 on the standard scale). The local housing authority, usually through the Tenancy Relations Officer, has the power to bring proceedings at the magistrates’ court, or they can be brought by the leaseholder privately. Any prosecution must be presented to a magistrate within 6 months of the commission of the offence.

                Comment


                  #9
                  Yes, I understand it but I wonder if there is another way, without visiting their office, to ask for the invoices/accounts?

                  Comment


                    #10
                    You want the audited service charge account for each year since 2011 ? Then you have to contact another leaseholder in the block and take a copy of his record.

                    Comment


                      #11
                      In most developments the summary accounts are not required to be audited. In fact, ICAEW TECH 03/11 even advises to interpret requirements to audit, in old leases, as actually requirements only to certify, because auditing, at that time, was much less thorough than a real audit would be today. If really audited, that will be a service charge cost.

                      There is no statutory requirement to distribute summary accounts to leaseholders, except to those that formally request them. Similarly, there is no statutory requirement to certify those given out voluntarily; a well run manager may well issue uncertified accounts in the expectation that no-one will request the certified ones.

                      The wording in the live version of section 21 is that the landlord must supply the summary. I would assume that that would imply they must deliver it, not insist on collection.

                      Section 22 only requires that they must be made available free of charge, and given that it specifically mentions charges for copying, I think the reasonable expectation is that you may have to visit their office to see them.

                      Obviously these days, the documents may well be scanned and stored electronically, so providing an electronic copy may be easy, and in some cases, the documents may never have existed in paper form. However, they may be in proprietary system which can only really be accessed on the computers in the office.

                      Some agents will make them available in near real time.

                      Of course, if you are questioning the summary accounts, there is a good chance that you will want to see the original documents, and so a trip to see them is almost inevitable.

                      Comment


                        #12
                        Many thanks! I am preparing a draft letter requesting access to the certified accounts + invoices. And yes, I want access to all the paperwork since 2011 and I am not sure why I need to contact another leaseholder about it. This is a landlord's responsibility to provide those on request.

                        Comment


                          #13
                          If the lease requires service charge payment in advance, its like giving a blank cheque to the managing agent, then you as a leaseholder should demand to see audited accounts ( its required in your lease ) after 6 months from the year end even if there is no statutory requirement to issue the accounts.

                          There are too many dishonest persons working to get money which they are not entitle to.

                          So take a friend when you visit the managing agents office to inspect the records for last year's service charges ( and see if their records can go back to the 2014 invoice ).

                          Comment


                            #14
                            yes, the lease is specific about advance payments. However, I am not sure what is the legal ground to demand audited accounts after 6 months. Actually, I have just found a clause which states that every year after 31 March a landlord must serve a copy of accounts (lease does not say audited) and accountant's certificate. I remember that I have never seen any certificates with accounts.

                            Comment


                              #15
                              Statute only gives you the right to see the most recently completed year's information. If they are not cooperating, the only way you will get back to 2011 is by starting legal action and getting them in the discovery process.

                              As quoted, they only have to provide certified accounts. There won't be a certificate, but there will be text saying either the accountants have prepared them or that they have checked them Certification isn't really designed to catch deliberate fraud, only to ensure that the accounts were prepared by someone who knew what they were doing.

                              I assume the suggestion to get them from someone else was based on the theory that they had actually been distributed.

                              Comment

                              Latest Activity

                              Collapse

                              • Variation of lease
                                by scampicat
                                I own a flat with a lease of 125 years starting from 2012. The ground rent is at present £150 pa, but increases as follows every ten years: £225... .£337.50.... 506.25.... 759.38.... 1139.06.... 1708.59.... 2562.89 ....3844.34. There are no more increases after eighty years. I am considering a variation...
                                25-02-2020, 08:57 AM
                              • Reply to Variation of lease
                                by sgclacy
                                A ground rent of £150 per annum increasing by 50% every 10 years until it reaches £3,844.33 with 2 years to go before it makes its first doubling would cost around £7,600 plus 0.33% of the value of the flat to have a statutory lease extension

                                One of the difficulties in proposing any...
                                13-08-2020, 01:08 AM
                              • FH forfeits and sells before 6 months window for relief?
                                by Loque
                                999yr Long lease commercial, lessee in breach, S146 served, S146 expires without being complied with, FH re-enters and changes locks.

                                Now... LH can go to court to claim relief from forfeiture for the remediable breach, usually within 6 months or so. BUT lets say once FH has re-entered he...
                                12-08-2020, 13:26 PM
                              • Reply to FH forfeits and sells before 6 months window for relief?
                                by sgclacy
                                Once the Land Registry have closed the title and a new lease granted there is no redress for the lessee seeking relief from forfeiture

                                The land registry will write to any party shown in the charges register and the tenant before closing the title - therefore illustrating the need to make...
                                13-08-2020, 00:03 AM
                              • RTM - Admin Fees Charged by Freeholder
                                by chris1544
                                We have RTM in place for our two flat building. Recently the other leaseholder put in a request to the RTM company to install an air vent. I duly wrote to the freeholder, notifying them of our intention to grant approval for the works, giving them the statutory 30 days notice.

                                They have...
                                12-08-2020, 11:04 AM
                              • Reply to RTM - Admin Fees Charged by Freeholder
                                by Gordon999
                                Its in section 98 of Commonhold &Leasehold Reform Act 2002.

                                Where a person who is—

                                (a)landlord under a long lease of the whole or any part of the premises, or

                                (b)party to such a lease otherwise than as landlord or tenant,

                                has functions in relation...
                                12-08-2020, 22:27 PM
                              • Reply to RTM - Admin Fees Charged by Freeholder
                                by Lorimer
                                There isn't much case law on this but even when an RTM is in place and it is the RTM that is responsible for dealing with consents, I believe the freeholder CAN charge a reasonable admin fee simply for the freeholder's time in reviewing the consent application. This is because the RTM company cannot...
                                12-08-2020, 20:33 PM
                              • Late ground rent payment charge & legal fees no warnings
                                by KingstonBee
                                Wonder if you can help... This week I have received a Court Claim form pack with what seems to include a ‘particulars of claim’ and ‘lease’ for ‘outstanding arrears of Ground rent and insurance’.

                                Now this is a huge shock as I’ve not received any letters at all, no emails or phone...
                                10-06-2020, 20:13 PM
                              • Reply to Late ground rent payment charge & legal fees no warnings
                                by Stew
                                sounds like a major win
                                12-08-2020, 20:22 PM
                              • Reply to Can I let this freehold indefinately ?
                                by ChrisDennison
                                Well but who’s to judge that intention? If I as the freeholder only want women, kids and one armed pirates in my block of flats and therefore put a restriction of use to that extent in the lease isn’t that my pretty unambiguous intention?



                                Well put. I have a property with...
                                12-08-2020, 19:14 PM
                              Working...
                              X