New freeholder: wrongly over-collecting service charge

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    #16
    how do I move forward on this?

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      #17
      A letter should be sent to L, from either you or your solicitor, explaining to him what I've explained to you.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

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        #18
        Thank you Jeffrey, I'll send a letter out today to him.

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          #19
          Did the previous freeholder confirm in writing you were fully paid up as of that date?

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            #20
            Hi Domonic
            We have nothing from the previous freeholder to say that we are fully paid up. (we thought he might sell the freehold at some point, but he didn't tell us that he had) I have my service charge demand from sept 08, and I sent chq's to cover the full amount of the demand. Which is why we presume we are covered until the end sept 09, is this not necassarily the case?

            Comment


              #21
              The reason for asking whether you had fully paid stems from s.45(2) of the Law of Property Act 1925, as below. A clear (= unqualified) receipt for rent connotes that there are no subsisting breaches of covenant. Service charge is often explicitly stated to be reserved 'as rent'.

              Where land sold is held by lease (other than an under-lease), the purchaser shall assume, unless the contrary appears, that the lease was duly granted; and, on production of the receipt for the last payment due for rent under the lease before the date of actual completion of the purchase, he shall assume, unless the contrary appears, that all the covenants and provisions of the lease have been duly performed and observed up to the date of actual completion of the purchase.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #22
                I'm sorry, I don't understand. What does this mean in laymans terms?
                Should I see if the previous freeholder will issue me a receipt to say I'm fully paid, or does this mean that it automatically assumes that all leasees are fully paid up, unless it is stated by the old freeholder?

                Comment


                  #23
                  An unconditional rent receipt issued by L impliedly confirms that T has kept all leasehold covenants. It protects a purchaser from later problems.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                    #24
                    Also, if your lease was granted after 1 January 1996, s.23 of the Landlord and Tenant (Covenants) Act 1995 may help you.

                    For all LL's demands for service charges which relate to any period prior to the date of assignment of the reversion to the new LL (i.e. the date when the new LL became your LL) - you as lessee are not liable to the new LL but instead the old LL.

                    Comment


                      #25
                      Originally posted by wellsbourne View Post
                      Jeffrey
                      This is what I don't understand either. there really is nothing more to it!! honest!

                      We paid the previous freeholder a years service charge in advance including b.insurance in sept 08. so we assumed no more demands until sept 09.
                      But the new freeholder has put in a demand for 1 years worth of buildings insurance now, (well, the demand came through in late June, I've been questioning him about this ever since) plus a quartley service charge payment for 01/07-30/09 which also includes within it a payment for buildings insurance. I'm then presuming come the 01/10 we'll all recieve another demand for a quartley payment.
                      It feels like he's trying to store up money for next years buildings insurance.

                      It's driving us mad! he won't let us see the accounts this service charge is based on either, despite being asked 4 times (in letters) as he says there isn't any, to which I've asked him why there is a £100 cost for an audit in the service charge!
                      You are legally entitled to view the accounts and the paperwork (quite clearly something must exist) they can charge you a fee for copying etc but nothing to actually view the documents, I believe its an offence to not allow you, although i think the difficulty lies in what to do next if the landlord doesnt allow you to inspect them or just ignores you.

                      Request to inspect supporting 22 accounts &c
                      This section applies where a tenant, or the secretary of a recognised tenants’ association, has
                      obtained such a summary as is referred to in section 21(1) (summary of relevant costs),
                      whether in pursuance of that section or otherwise.
                      (1)
                      The tenant, or the secretary with the consent of the tenant, may within six months of obtaining
                      the summary require the landlord in writing to afford him reasonable facilities—
                      (2)
                      for inspecting the accounts, receipts and other documents supporting the summary,
                      and
                      (a)
                      (b) for taking copies or extracts from them.
                      (3) A request under this section is duly served on the landlord if it is served on—
                      (a) an agent of the landlord named as such in the rent book or similar document, or
                      (b) the person who receives the rent of behalf of the landlord;
                      The landlord shall make such facilities available to the tenant or secretary for a period of two
                      months beginning not later than one month after the request is made.
                      (4)
                      [F1(5) The landlord shall—
                      where such facilities are for the inspection of any documents, make them so available
                      free of charge;
                      (a)
                      where such facilities are for the taking of copies or extracts, be entitled to make them
                      so available on payment of such reasonable charge as he may determine.
                      (b)
                      The requirement imposed on the landlord by subsection (5)(a) to make any facilities available
                      to a person free of charge shall not be construed as precluding the landlord from treating as
                      part of his costs of management
                      Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                      I do not accept any liability to you in relation to the advice given.

                      It is always recommended you seek further advice from a solicitor or legal expert.

                      Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                      Comment

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