Mngt Company fail to produce invoices for large sums - Directors support them

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    Mngt Company fail to produce invoices for large sums - Directors support them

    We are undertaking major roof works circa £0.5mil and I am one of many lessees with part freehold. I have detailed many concerns e.g. surveyors and mng company chosen without tender, little pressure on their fee which is based on a % of total work which has doubled 250K to 500K since we paid the surveyors for an estimate!). We had to pay all funds up front (crica £13K each and are now being asked for extra funds. My MAIN concern however is that I have requested copies of the invoices for a £28K 'legal and professional' fees cost spotted in the 2019 accounts. Two months after my request the mngt company have not produced the invoices and the directors see my request as excessive. They seem to see no error in the surveyor or the mngt company's work and provide vague explanations of the £28K expense such as 'it is money on account to the surveyors for the roof works' and 'there is little detail on the invoices and the docs wont help you'. I have refused to pay the current mngt fees due or the extra roof works fund until i receive the documents. Q: Will i end up paying legal costs when the formal demands come or am I within my rights to withhold until I see what I am paying for?

    #2
    Under normal circumstances I'd say pay in full under protest and immediately commence FTT application on service charges.

    However unfortunately the UK no longer has a functioning/honest/plausible court system or judiciary - so the thing that makes us a civilised place is gone. It's the wild west - and the in the wild west you have no "rights", and if it continues we will soon be in no different position to the citizens of Nigeria, Burma, Iran and most other places.

    Comment


      #3
      It partly depends on what your lease says, and when the amounts that are being demanded were/are due.

      If your lease requires you to pay in advance, you cannot expect to see invoices before paying any sums that can be argued to be reasonable potential costs.
      On the other hand, if the legal and surveyors costs were for a previous service charge year for which service charge accounts have already been finalised, they are acting unreasonably by refusing to produce supporting invoices.

      If the second applies, it may be considered reasonable for you to withhold payment, but only of the disputed amounts. However, if you do withhold any payment you are at risk of having interest and legal costs awarded against you if a tribunal later finds that the money was demanded reasonably and is payable.

      Comment


        #4
        There should be full disclosure of documents to leaseholders. You are required to pay a reasonable sum and you are unable to calculate a reasonable amount if you are denied access to the invoices and supporting documents. So I would withhold payment of the full amount or estimate an amount which is reasonable if you are able to do so. I do not believe that a Tribunal would award costs against you in such circumstances. It is unfortunate but going to a Tribunal is often the only way of obtaining information to which you should be entitled.

        Comment


          #5
          Originally posted by Macromia View Post
          It partly depends on what your lease says, and when the amounts that are being demanded were/are due.

          If your lease requires you to pay in advance, you cannot expect to see invoices before paying any sums that can be argued to be reasonable potential costs.
          On the other hand, if the legal and surveyors costs were for a previous service charge year for which service charge accounts have already been finalised, they are acting unreasonably by refusing to produce supporting invoices.

          If the second applies, it may be considered reasonable for you to withhold payment, but only of the disputed amounts. However, if you do withhold any payment you are at risk of having interest and legal costs awarded against you if a tribunal later finds that the money was demanded reasonably and is payable.
          Thanks. It is the latter. 2019 annual accounts - which have not been presented formally at an AGM yet - were sent to me in an effort to answer my concern about other things (I could detail many!). I spotted this figure - asked for an explanation and have been getting ambiguous answers from both mngt and directors alike including [your request ie for the invoices] 'would add an extraordinary burden of work on the mngt company'.

          Comment


            #6
            Originally posted by eagle2 View Post
            There should be full disclosure of documents to leaseholders. You are required to pay a reasonable sum and you are unable to calculate a reasonable amount if you are denied access to the invoices and supporting documents. So I would withhold payment of the full amount or estimate an amount which is reasonable if you are able to do so. I do not believe that a Tribunal would award costs against you in such circumstances. It is unfortunate but going to a Tribunal is often the only way of obtaining information to which you should be entitled.
            It is not the Tribunal process (or length of time) that worries me but the risk of paying legal costs for the demand letters from solicitors. Your point about working out a sum is useful - thank you. I could pay monies due (mngt + roof extra cost) MINUS my contribution of the £28K which is in question. Does that sound realistic?

            Comment


              #7
              Originally posted by AndrewDod View Post
              Under normal circumstances I'd say pay in full under protest and immediately commence FTT application on service charges.

              However unfortunately the UK no longer has a functioning/honest/plausible court system or judiciary - so the thing that makes us a civilised place is gone. It's the wild west - and the in the wild west you have no "rights", and if it continues we will soon be in no different position to the citizens of Nigeria, Burma, Iran and most other places.
              Fair point but assuming I do proceed with the FTT. What do you believe the application should try to achieve if I have paid monies due? ie would i be requesting the invoices and failing that, a refund of monies paid (which of course will just be a credit for future costs? My ultimate need is for them to be more transparent in their processes.

              Comment


                #8
                You are entitled to withhold monies until you receive an explanation of the charges and receive supporting documents and you are also entitled to reject the costs of issuing demands whilst you are making enquiries to satisfy yourself that the the charges are reasonable. The threat of applying to the FTT should be sufficient to persuade the Management Company to comply with your request. If you did proceed to the FTT, your application would be on the basis that the service charges and any administration charges (legal costs) are unreasonable. The Management Company would then need to supply the documents and explain why they are reasonable. Before applying to the FTT, you should invite the Management Company to comply with your request in order to save a lot of time and expense and that you will refer to the correspondence when the issue of costs is considered.

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