Sudden additional bill for service charge?

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    #16
    2.2. Under part 1 of Schedule 3, clearly states that "The tenant will pay the Interim Buildings Charge [the term use for estimated service charges] by equal quarterly payments in advance"

    This would mean that, although the managing agents seem to be correct to demand payment by Jan 1st, they can only require a quarter of the estimated total to be paid by that date.

    Comment


      #17
      More than 8 years ago, I had a flat in a block where the managing agent issued demands for payment of half year service charge in advance. During last quarter of year 2, we would get a copy of the audited service account showing the account was overspent and the estimated budget had been underestimated. . During the 1st quarter of year 3 , we would get a bill for £200-£300 to cover the underpayment in year 1.

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        #18
        Ignore my above post (#16), I didn't check through the earlier posts properly and was confusing this thread with another recent one.

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          #19
          The MA appears to have acted unreasonably, it should have prepared a budget and issued demands in a timely manner.

          I think that there is a valid argument that the MA has retained the previous year’s budget and that he is obliged now to charge all contributions for the entire year on that basis and there does not appear to be any authority for him to amend previous demands.

          It is worth noting though that your share of the actual expenditure will need to be paid at some stage.

          Comment


            #20
            Originally posted by eagle2 View Post
            and there does not appear to be any authority for him to amend previous demands
            The possibility of the budget being late and authority to backdate any increased payments once it is prepared are contained in the document provided by the OP:

            2 If and whenever the Building Charge Estimate shall not be prepared and a copy thereof supplied to the Tenant as required by paragraph 2.1 of this Part of this Schedule then pending the preparation of the Building Charge Estimate the Interim Building Charge shall be a sum equal to the Building Service Rent for the immediately preceding Accounting Period provided that if the Building Charge Estimate is subsequently prepared and a copy thereof supplied after the commencement of the relevant Accounting Period the Tenant shall forthwith pay to the Landlord such further additional sum or sums which would have been so payable had the Interim Building Charge have been prepared and a copy thereof supplied as required by the said paragraph 2(A).

            Comment


              #21
              There can be very little excuse for an MA failing to supply a budget at the beginning of the service charge year and to produce one 3 months after the start of the year is unreasonable. In this case, the MA has offered no explanation; at the very least, it should have sent out a covering letter and offered some assistance to leaseholders rather than expect them to pay additional sums at this time of the year due to what appears to be the MA’s failings.

              Comment


                #22
                Originally posted by eagle2 View Post
                There can be very little excuse for an MA failing to supply a budget at the beginning of the service charge year and to produce one 3 months after the start of the year is unreasonable.
                I have recently received an estimated budget for the current service charge year, along with the service charge account summary for last year.
                The invoice for the second half yearly advanced payment was also included, with everything posted out just before Christmas and less than two weeks before we were six months into the service charge year.

                Managing agents should be able to get budgets and invoices sent out well before they are due, but unfortunately not all can manage this.

                Comment


                  #23
                  Originally posted by Macromia View Post
                  I have recently received an estimated budget for the current service charge year, along with the service charge account summary for last year.
                  The invoice for the second half yearly advanced payment was also included, with everything posted out just before Christmas and less than two weeks before we were six months into the service charge year.

                  Managing agents should be able to get budgets and invoices sent out well before they are due, but unfortunately not all can manage this.
                  An MA should be able to produce a budget in a timely manner and he should be held to account if he fails to carry out his duties properly. In the exceptional circumstances where there is unavoidable delay, he should offer an explanation to the leaseholders. Too many MAs neglect the opportunity to create the goodwill which would be generated with good communication.

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                    #24
                    I do not consider that it is reasonable to allow the MA to supply an estimate at any time he chooses or to allow the MA to amend the estimate as many times as he wishes during the course of the year. The lease only provides for increases in the estimated charges and it is silent regarding any amounts overcharged. The unfair contract terms appear to apply.

                    Comment


                      #25
                      Originally posted by eagle2 View Post

                      An MA should be able to produce a budget in a timely manner and he should be held to account if he fails to carry out his duties properly.
                      I completely agree.

                      In my case I consider my managing agents performance to be well below a reasonable standard.
                      I will find out to what degree the FTT agree with me sometime later this year.
                      My MA's can't even manage to include the correct paperwork with their demands - despite the fact that I've told them that their version of the 'rights and obligations' is out of date.



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