SERVICE CHARGE: Late / non billing by agent

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    SERVICE CHARGE: Late / non billing by agent

    Hi,

    I have another question which I hope I can get an answer to!

    Since I have owned my property, I have paid the service charges I have received including any requests to cover overspend in previous years.

    However it has materialised that my service charges should be in multiple parts (lets say a main part for example for cover the flat for which I'm a lessee and another charge to cover a storage space, for which I am a lessee).

    I have never received a 2nd bill for these additional amounts and when the agent sends the audited accounts, they include information on all aspects, not just the main service charge.

    With a change in managing agent it has materialised that on the accounts/ledger for this 2nd aspect, there are debits for the service charges and reserve fund, but no credits, as I have not paid against such a reference.

    The new agents are saying that these amounts should be paid as they are separate from any other amounts I have paid.

    Based on this I have a few questions:
    1. If these go back to 2007, is it too late for them to now request payment?
    2. What evidence should they need to provide that these amounts are separate and due?
    3. How should I be billed?, ie should they send me a proper bill, rather than just a balance carried forward line relating to the previous agents and a printout of the previous agent's accounts


    Many thanks again,
    icstm

    #2
    Please let me know if I can better explain this so that you can help.
    Many thanks!

    Comment


      #3
      You should check with the owners of neighbouring flats to see if they have paid. If they paid, then you are in arrears on your payments.

      Alternatively you can make an appointment to inspect the service charge records ( normally you have 6 months from release of the service charge accounts to request in writing an appointment to inspect the SC documents ).

      Comment


        #4
        Thanks for your reply:

        Originally posted by Gordon999 View Post
        You should check with the owners of neighbouring flats to see if they have paid. If they paid, then you are in arrears on your payments.
        I believe this to be untrue, they have not billed me for some aspects so I cannot be in arrears for those aspects - by definition. "arrears" is for something past due and they have not demonstrated that any invoice or bill or notice/schedule for payment was raised.

        All they have done is demonstrate their accounting system has an entry on my account, which the new MA is including on their payment request.

        Originally posted by Gordon999 View Post
        Alternatively you can make an appointment to inspect the service charge records ( normally you have 6 months from release of the service charge accounts to request in writing an appointment to inspect the SC documents ).
        This I could do.
        Let's assume that it shows an invoice should have been raised, surely they would need to raise a proper invoice for these amounts and not just write "balance brought forward" and send me a printout of their accounting system? Or is this satisfactory?

        TIA

        Comment


          #5
          As from Oct 2007 the service charge demands must be in a prescribed form, if not they are not payable.

          If they are not demanded within 18 months of being incurred they are again not payable.

          Perhaps you could quote what your lease says about these 2 seperate payments.

          Andy
          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


            #6
            Originally posted by andydd View Post
            As from Oct 2007 the service charge demands must be in a prescribed form, if not they are not payable.
            If they are not demanded within 18 months of being incurred they are again not payable.
            Where can I find this regulation? Both those points sound useful

            Originally posted by andydd View Post
            Perhaps you could quote what your lease says about these 2 seperate payments.
            Andy
            Well the main service charge basically says I need to pay them within 14 days of notice being served and they can demand 1 or more additional interim payments as the Lessor sees fit.

            It was written in the 80s, so it is probably more one-sided than current ones. It even says it can change the %age of the total expenses that each flat pays if writeen notice is given (no consultation required).

            The payment of service charges on the other element are written on fewer pages but also make similar claims. It never says when they will served, only that:

            The tenant shall pay the lessors the[service charge]incurred or to be incurred [...]an amount on account of such sum to be paid to the lessors by way of additional rent on the first day of each July of each year of the said sum and provided that [...]

            Comment


              #7
              reading the web suggests that the 18-month rule is not to the when the demands are served but to when the expenses are incurred. Is this right?

              That means as I am billed in advance and not in arrears (obviously, overspend is reclaimed in arrears), then the 18 months becomes 30 months?

              Or is it a proportion of the the expenditure would occur straight-away in that financial year?

              I guess overspend that happened in a financial year that ended more than 18 months ago can be now considered non-payable?

              Comment


                #8
                Originally posted by icstm View Post
                Where can I find this regulation? Both those points sound useful
                Look at the Landlord and Tenant Act 1985, s.20/20ZA/20A/20B/20C as amended/inserted in 1986, 1987, and 2002.
                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


                  #9
                  Assuming no other documentation exists / can be produced by the new agent, a lessee is not liable to pay service charges that fell due more than 18 months before the date of request for payment. If a request is made after this date (with no letters in between advising this expenditure is likely to be incurred) you are not liable to pay.

                  The charges should be apportioned going back 18 months from the date of the request to determine the amount you are liable for.

                  Comment


                    #10
                    Originally posted by dant View Post
                    Assuming no other documentation exists / can be produced by the new agent, a lessee is not liable to pay service charges that fell due more than 18 months before the date of request for payment. If a request is made after this date (with no letters in between advising this expenditure is likely to be incurred) you are not liable to pay.

                    The charges should be apportioned going back 18 months from the date of the request to determine the amount you are liable for.
                    That's not my understanding. The criteria is when the landlord incurred the charge. If there is no more recent case law since January this year then case law seems to be converging on the definition of 'incurred' being defined as when the charge becomes payable by the LL. This is in most cases when the LL receives the invoice.

                    So no apportionment applies. If the LL is billed for 12 months advance insurance on 1/1/10 and the LL demands service charges on 2/7/11 (with no prior advance demands or notices that payment will be collected later) then the tenant doesn't have to contribute to the insurance costs.
                    I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

                    Comment


                      #11
                      Yes that's right, if the cost is incurred over 18 months prior and leaseholders are not aware of it then it would irrecoverable. The Brent Case set out most points on this, and in respect of post 9 "advising" is more complex than it seems.

                      If however the cost relates to earlier periods but the landlord only incurs the cost some time later, as in post 10, then it is still due as the ( pre resurrection) OMpeverel case showed.


                      (Note to Mod2 the companies named are in relation to determinations which are publicly available)
                      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                      Comment


                        #12
                        Originally posted by siva View Post
                        That's not my understanding. The criteria is when the landlord incurred the charge. If there is no more recent case law since January this year then case law seems to be converging on the definition of 'incurred' being defined as when the charge becomes payable by the LL. This is in most cases when the LL receives the invoice.

                        Precisely; "when the charge fell due" which only falls due when demanded. This was covered in a rather recent LVT case dealt with by Arden Chambers, Justin Bates I believe from memory.

                        So no apportionment applies. If the LL is billed for 12 months advance insurance on 1/1/10 and the LL demands service charges on 2/7/11 (with no prior advance demands or notices that payment will be collected later) then the tenant doesn't have to contribute to the insurance costs.
                        Agreed, as per my point above. The insurance premium falls due on demand of payment from the Landlord. The 18 months starts ticking from then.

                        Comment


                          #13
                          Originally posted by dant View Post
                          Agreed, as per my point above. The insurance premium falls due on demand of payment from the Landlord. The 18 months starts ticking from then.
                          I don't think this is right (as I read your post) do say if I have misunderstood what you are saying.

                          The insurance premium ( or any cost) is incurred by the landlord when they are "billed" ( this can take several forms) and the 18 month clock runs from then, and the leaseholder must, within 18 months, either be sent a demand or notified of the cost and that it will be demanded ( at some point with due regard to the lease).

                          The case Siva refers to examined in detail the failings of what was considered a demand and what was notification that it will be demanded ( eg Surveyors estimated costs were not accepted as notification or a demand).
                          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                          Comment


                            #14
                            Originally posted by leaseholdanswers View Post
                            I don't think this is right (as I read your post) do say if I have misunderstood what you are saying.

                            The insurance premium ( or any cost) is incurred by the landlord when they are "billed" ( this can take several forms) and the 18 month clock runs from then,

                            Which is the same as me saying, "the insurance premium falls due on demand of [for] payment?"
                            and the leaseholder must, within 18 months, either be sent a demand or notified of the cost and that it will be demanded ( at some point with due regard to the lease).

                            The case Siva refers to examined in detail the failings of what was considered a demand and what was notification that it will be demanded ( eg Surveyors estimated costs were not accepted as notification or a demand).
                            Also, I do not know whether there is still no prescribed Section 20b notice?

                            Comment


                              #15
                              Originally posted by dant View Post
                              Also, I do not know whether there is still no prescribed Section 20b notice?
                              That's right as there is no notice as such, it's what passes muster and the Brent Case explored a lot of these issues.

                              Where contributions are in advance it only arises if expenditure exceeds that amount, and best practice seems to be reporting on gross expenses for the period and a statement outlining the amount that will be demanded to that property.

                              That said best practice is to get "accounts" out that much earlier.
                              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                              Comment

                              Latest Activity

                              Collapse

                              • S20 - Quotes not valid for long enough for 30 day consult
                                by Flatman78
                                Hi LZ Community

                                Just wondering if anyone's had/having any issues with S20 and allowing leaseholder 30 days to review estimates, raise concerns etc.

                                Building material prices have fluctuated massively since covid and brexit.
                                with a combination of Brexit, impact from russia/ukraine...
                                23-05-2022, 14:42 PM
                              • Reply to S20 - Quotes not valid for long enough for 30 day consult
                                by Flatman78
                                Thanks Gordon999

                                You can see from above reply to Macromia that's your comment wouldn't be relevant to me. there is no managing agent. It's just me (FH) and LH in upstairs flat.
                                Thanks for taking time to reply though....
                                23-05-2022, 20:29 PM
                              • Reply to S20 - Quotes not valid for long enough for 30 day consult
                                by Flatman78
                                Thanks Macromia, I'm hoping not to have to request quotes to include extra 'contingency' as I know some building materials literally jumped by up to 80% pretty much overnight and so I / we could end up paying a hell of a lot more than we have to go with a 'protective' quote.

                                It's only me...
                                23-05-2022, 20:27 PM
                              • RTM Hand Over Issues
                                by martin15
                                RTM handing over issues

                                Our RTM companies comprise 4 blocks of 6 identical two bedroom flats and each block is registered at Companies House as a separate company.
                                Following the acquisition date, it was discovered the former directors ignored legal advice and changed property management companies...
                                23-05-2022, 19:36 PM
                              • Reply to RTM Hand Over Issues
                                by ash72
                                You could sue the other company for the money owed.
                                23-05-2022, 19:48 PM
                              • Reply to RTM Hand Over Issues
                                by Hudson01
                                I am clearly no expert but i think this statement from the all knowing WWW appears to fit the bill for what has happened to you.................

                                '' Fraud can be broadly defined as the deliberate use of deception or dishonesty to disadvantage or cause loss (usually financial) to another...
                                23-05-2022, 19:48 PM
                              • Reply to Old managing agents accounts
                                by Gordon999
                                You could show the last service charge demanded by previous managing agent . There should be a final summary of the service charge account.to show the unspent funds.
                                23-05-2022, 18:26 PM
                              • Old managing agents accounts
                                by jazzythumper
                                Since obtaining the RTM and changing the managing agent, we have never been given full accounts / receipts for the previous year(s). We believe that as the old freeholder and leaser holder of one of the flats were represented by the same solicitor that prior to the sale of the freehold, we were subsidising...
                                20-05-2022, 11:21 AM
                              • Building works & S20 process
                                by RichA
                                Hi. I have a freehold after selling a leasehold flat in a block of 4 flats. We don't currently have a managing agent, so these duties currently fall to me (I am holding off appointing a managing agent whilst the leaseholders consider whether they want to RTM).

                                The block needs some maintenance...
                                21-05-2022, 17:20 PM
                              • Reply to Building works & S20 process
                                by Macromia
                                Good questions.
                                The fact that the cost of work means that Section 20 consultation is required doesn't necessarily mean that it is major work that will require a project manager and, although most leases will contain clauses that allow the cost of project management to be recovered from leaseholders,...
                                23-05-2022, 18:23 PM
                              Working...
                              X