Managing Agents and Freeholder Witholding Service Charges

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    Managing Agents and Freeholder Witholding Service Charges

    We are leaseholders of a purpose-built block of 36 flats near Heathrow. The freeholder is a director of the managing agents.

    Usually we receive the Service Charge Accounts on October after the end of the previous financial year. So we expected these on October 2020 for the period April 2019 - April 2020. However we have received nothing.

    Indeed the managing agents have shut up shop, closed their offices and switched off all phones. They only have one email address - which they refuse to respond to.

    As well as the S/C for last year, we are also missing the Budgetary / Expected Expenditure accounts for April 2020 - April 2021

    In December 2020 we should have received the demand for Ground Rent for January 2021 - July 2021. Again nothing.

    In addition our RSA Buildings Insurance should have been renewed in March 2020. Yet again we have neither received details of this, nor a demand for a renewal premium. The MA, Brokers and RSA refuse to respond to requests for details.

    Additionally we have been hit by toxic black mold. Many of the flats are cold and damp. This is due to the exterior brickwork and cement becoming powdery and absorbent. The exterior cavity walls do not have insulation.

    We have tried to raise these issues with the respective Property Redress Scheme, but the freeholder then threatened us with forfeiture.

    We have tried getting the local Council to support us, but they have effectively ignored us.

    We have researched the energy efficiency of the 36 flats, mainly all 'buy to let,' and about 10 fail to meet the minimum level for lawful letting to tenants; that is they are rated F or G.

    Please can anyone advise as to what we can do. Thank you.

    Last edited by CJB666; 19-03-2021, 22:23 PM. Reason: Spelling

    If they have used a solicitor to threaten forfeiture, make a complain to SRA ( Solicitors Regulation Authority ). The law allows the freeholder to start proceedings for forfeiture if the ground rent arrears exceeds £350 and unpaid after 3 years .

    The £350 level is only a weeks pay for many workers, is ridiculously to forfeiture a flat valued at £50K or more.

    Even Housing Minister gets more pay that £350 per week.

    Make a complaint to your local MP and ask him or her to make complaint to Housing Minister , Law Commission and CMA ( Competition & Markets Authority about unfair use of forfeiture).

    Keep a record of all complaints .

    "We have tried to raise these issues with the respective Property Redress Scheme, but the freeholder then threatened us with forfeiture."


      Under what grounds is the freeholder threatening forfeiture?

      If you have not received service charge demands, or ground rent demands, then neither of these are payable - regardless of what your leases may say.

      If you do not received demands for service charge costs within 18 months of the costs being incurred, and are not sent notification that the costs have been incurred and will be demanded at a later date stating the amount of those costs, in may be that the costs end up being legally unrecoverable.
      What you would be sensible to do is make sure that you have evidence that you have contacted the managing agents and freeholder questioning the fact that you haven't received anything (emails, copies of letter and 'proof of posting' certificates from the post office which are free if you ask for them, etc.) this helps to cover you if the freeholder/managing agents later claim that everything was sent and you just haven't paid.

      The insurance is potentially a problem because you need to know that your building is covered. If you have evidence that you have tried contacting the managing agent, freeholder, broker and insurance company regarding this and have not been provided with any evidence that insurance is in place, I would suggest trying to find a company that will allow you to insure your flat separately (not many will, but it is possible) and then telling the managing agent/freeholder that, if they don't provide sight of the insurance policy, you will take out your own insurance and will deduct the cost from the service charges they demand.

      Mould is difficult because you would need to be able to argue that the lack of building maintenance was the cause, and for that you would need to pay for surveyors reports.

      As Gordon999 has said, make sure that you keep copies of all contact sent or received regarding all these issues (preferably with proof of posting), and do everything in writing (which includes email). Also state when you expect a response by - give at least four weeks for anything more substantial that confirmation of receipt so that you can't be said to be being unreasonable. You may need this if you later challenge any of the service charge costs.

      At the very least it sounds like you should be entitled to demand a reduction in the fees payable to the managing agents. If what you have said is correct they are not doing their job and can therefore not expect to receive their usual annual fee (Covid 19 is no excuse for not answering letters or emails at all, but can be used as a reason for some delays).


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