Sudden additional bill for service charge?

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    Sudden additional bill for service charge?

    I'm the landlord of a leasehold property, and my management company has suddenly sent me a retrospective additional charge for two service periods.
    I pay once every three months and have paid for Oct-Dec and very recently paid for Jan-Mar - yet the bill is for an additional £30 for each of these two periods.
    There is no explanation on the bill, just the dates above and the additional amount. The usual service charge terms/legal bit is included on the back (as I understand it this is a legal requirement to make the bill enforceable) - but still, it's a massive surprise. There's also a statement of account showing an increase in the service charge for the year starting end of September, but am I unreasonable for expecting notice of an increase and an explanation before being slapped with a bill for periods I've already paid for under the 'old' charge? The last communication I had about the service charge amount was earlier this year and basically said that as the accounts hadn't been agreed it'd stay the same for now. It's obviously now been amended and increased but am I meant to receive notice?! And surely I can't be expected to pay more for periods I've already paid for?!

    #2
    This may be in the wrong forum, not sure how to move to the leasehold one.

    Comment


      #3
      You are a tenant, not a landlord, in this case. You may have sub-tenants, but that is not relevant here.

      One would need to see the terms of the lease to know whether this was possible, assuming that this isn't correcting a mistake.

      It would be unusual, I suspect, for a lease not to have a provision to make immediate additional service charge demands if they run out of money, but backdating it seems stranger. Although significant, £120 is not a huge amount, given the hassle of fighting it. It is probably better to see what the end of year situation is, as if the charge was valid, other than not being able to make it retrospectively, they will have to increase the next year's budget to make good.

      It sounds like things are not being handled well, but they have hinted that the figure might be revised.

      Is the management company owned by the leaseholders, and are they self managing? If so, I would suggest you accept the increase and volunteer to become an (unpaid) director of the company, to run it better in subsequent years, as, in this sort of company, failing to get the budget out in time, and improvising to correct the situation tend to be the result of not having volunteers with appropriate skills.

      Comment


        #4
        It is the wrong forum. I think you will have to contact a moderator. They use he ids Moderator1 and Moderator2.

        Comment


          #5
          Yes fair enough I am a tenant. The lease is owned by a separate company. I'll check my paperwork - good shout, should have thought of that.
          I would have expected a letter saying 'we're having to increase the service charge' and I would have expected an increase from the next period, not the last two! It's odd.

          Comment


            #6
            I would have expected them to communicate, as well.

            If there is no sinking/reserve fund they may be in a position where they will run out of money. Most leases don't allow borrowing against future service charges.

            Comment


              #7
              Not wishing to criticise your understanding of service charges, but service charges for the next years expenditure are normally estimates, but of course you can't start work till the money comes in.
              I have to do this. I estimate the costs for the next financial year, itemised of course, but by the time you get final estimates, and the work starts, raw materials can go up, or you find that once the work starts, there is a bit more to be done ( small ) then at the end of the year, a reconciliation statement is done, stating if the jobs cost more or less.

              If it cost more, you are asked to pay the extra, which you have been asked to pay.
              Buildings insurance may have gone up ( it can't stay stagnent forever ) , many insurance claims may have been put, finalised, and the premium goes up.

              But as you say, the reason for the excess £ 30 should be itemised, and it was not.

              Service charges to maintain the place are not constant, just like your car repairs, are not contsant prices.

              Comment


                #8
                Yes agree with above. Service charges can only be an estimate until the final accounts are in, then it is usual to adjust them to ensure there is no shortfall.

                Comment


                  #9
                  Extra,
                  Our block insurance company wont give us the price to renew the policy until 2 weeks prior to renewal, and the estimate has been put forward and paid in advance by the leaseholders.
                  I get told off by some leaseholders not to inflate the insurance in case it increases, so they are faced with an extra bill, which they don't like.
                  Better to get some money back at the end of the year, than have to force leaseholders to pay the extra.

                  You can please some of the people some of the time, but you can't please all of the people all of the time.

                  Comment


                    #10
                    I suggest that you contact the management company and ask them to explain the additional charge and why theyappear to have backdated a charge.

                    Comment


                      #11
                      Originally posted by stephyp View Post
                      Yes fair enough I am a tenant. The lease is owned by a separate company. I'll check my paperwork - good shout, should have thought of that.
                      I would have expected a letter saying 'we're having to increase the service charge' and I would have expected an increase from the next period, not the last two! It's odd.
                      No , I think you are the title holder of a leasehold property . This means you are the owner of the lease and you are the leaseholder.

                      The party which is holder of the freehold title is the legal owner of the building and all land up to the boundary. .

                      The Lease agreement is covered by the Landlord and Tenant Act where "Landlord" means the current freeholder and "Tenant" means the leaseholder .

                      Its a very confusing for the residents because the successive appointed Housing Ministers do not stay long enough to learn their job.

                      Comment


                        #12
                        Originally posted by Gordon999 View Post
                        Its a very confusing for the residents because the successive appointed Housing Ministers do not stay long enough to learn their job.
                        I think you will find that Sir Humphrey controls the minister much more than the politicians would like to admit. The country is run by civil servants who do provide a level of continuity. If anything, it is the committee stage where parliament really controls the details of legislation.

                        (Also, UK legislation is not as home grown as the leavers would want one to believe. It adapts ideas originated elsewhere, such that most Western countries end up with similar laws, without the EU having to put an oar in.)

                        Comment


                          #13
                          Normally, you should be sent a copy of the budget for the current year with an explanation that your share is x % payable quarterly (in your case). If you have not received it, ask the management company to provide a copy. It looks like the management company did not finalise the budget until late.

                          Comment


                            #14
                            Back after Christmas, thanks for the replies.
                            Yes I am aware the service charge is an estimate.
                            I was told earlier this year that as the budget hadn't been done, the charge would remain the same. I've then been sent this back-dated charge plus a copy of the new estimate (showing an increase) BUT there's not even a courtesy letter with the demand for payment. It just doesn't sit right. These are my terms. Have they done anything wrong?
                            Attached Files

                            Comment


                              #15
                              It looks to me that they have followed the procedures on the first page correctly.

                              Comment

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