Agency has drawn down and kept money from our electricity account - can they do that?

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    Agency has drawn down and kept money from our electricity account - can they do that?

    6 flats here - managed by agency appointed by the freeholder.

    after *7 years* of estimated elec bills we overpaid by a fortune and had a positive balance.

    agency and freeholder fell out over money (and other things)

    looks like the agency have drawn down our positive balance and used to it settle the money dispute with the freeholder....

    ....leaseholders not too happy about their overpayment essentially being stolen!

    anyone know of the legality of this, or what we might actually be able to do in practice?

    thanks very much-
    Tiger-



    #2
    Presumably the electricity bills are for a communal electricity supply for lighting in communal corridors, etc.?

    It is also likely the case that any money owed to the managing agents is either money that they believe they are owed for managing the property, or money they have paid out for service charges (although generally they wouldn't arrange work unless the freeholder had provided money to cover this, or it had been collected in advance through service charges).
    Either way, these are costs that would be charged to you via the service charge in the same way as communal electricity charges - so you haven't really 'lost' anything unless they have taken money from an electricity account that you are solely responsible for paying (i.e. the account for supply to your demised premises).

    If you believe that you have paid too much in service charges, or have been charged for things that the lease doesn't allow the freeholder to charge for, you need to take action against the freeholder, not the managing agent, and the usual way of doing this would be to start a tribunal case.

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      #3
      I suggest you download the publication by ofgem for "resale of electricity and gas charges".

      It states you can claim back over payments through the small claims court.

      Comment


        #4
        Originally posted by Gordon999 View Post
        I suggest you download the publication by ofgem for "resale of electricity and gas charges".

        It states you can claim back over payments through the small claims court.
        Depending on the circumstances, it might be possible to 'claim back' overpayment for electricity. However, the managing agents fees would still be owed as part of the service charge (unless your lease doesn't allow for this, which would be unusual).

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          #5
          yes bills are for communal areas (only 7 light bulbs though - we overpaid by more than £1000).

          yes - managing agent feels they are owed - but my point is - they are owed by the freeholder, not us. Isn't money we have clearly overspent (and due to their incompetence at not getting a meter reading) somehow held in trust? ...actually we have the same issue with our reserve fund, which has also disappeared.
          We were not behind with any payments - quite the opposite - we had over-paid, so not sure what the nature of the disagreement between agency and freeholder was, but it seems we are the ones that are out of pocket.
          We have since gone the RTM route.

          Comment


            #6
            Originally posted by tigerprawn View Post
            yes - managing agent feels they are owed - but my point is - they are owed by the freeholder, not us. Isn't money we have clearly overspent (and due to their incompetence at not getting a meter reading) somehow held in trust? ...actually we have the same issue with our reserve fund, which has also disappeared
            Unless your leases don't allow managing agent fees to be charged as part of the service charge, or the managing agents had an agreement with the freeholder that he pays fees for some services performed by the managing agent that can't be recovered via the service charges, it may be completely reasonable for them to have paid their fees from any rebate that came from overpayment of electricity.

            While it is reasonable to expect managing agents to supply the electricity company with a meter reading at least once a year, the only people who have really been 'harmed' by them not doing so are any leaseholders who sold up before the account was corrected.

            As for reserve funds having disappeared, if the managing agents haven't adequately accounted for any reserves that you feel there should be, you should be demanding full details of any spending and asking to see all relevant invoices.
            If they can't, or won't, supply this you should use their formal complaints process and then potentially follow up with a complaint to whichever redress scheme they are a member of (the redress schemes aren't much use, but you may be able to get them to require the managing agents to supply all relevant paperworks and invoices).
            If you have any evidence that they have taken funds that they had no right to use you should consider reporting them to the police for theft (although there's probably not much chance of anything coming from that).

            Comment


              #7
              You should use the small claims court to get back overcharged electricity and mention this the ofgem publication in your claim. I can hardly believe you have been charged based on 7 years of estimated charges without being shown any meter readings.

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