Service charge demands & change of management company

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    Service charge demands & change of management company

    Hi Guys,

    I bought my 1st property back in March 2008 and i had a tenant moved in straight away after a redecoration!

    From 2008 up until now, i have been chasing the company who is responsible for collecting the service charges, i have sent letters, faxes, emails, left voicemails etc asking where do i send the money too and of whom to i make the cheque payable too. I heard nothing back from them, so i tried to do the above again, no answer.

    Perhaps it was stupid of me, i left it. Ok, from March i have had about 3 different tenants in there hassle free and they have always passed me any letters that may come through from the previous owner. I always forwarded these letters onto this previous owner. As the months went on and i kept collecting letters, one of them kept catching my eye so i decided to open it only last week, it was demands for the service charges for about 2 1/2 years, totalling over £3,000.

    The company who this letter was from is a completely different company to what was assigned when i bought the flat, so if no letters are coming in my name and all under the previous owners name then i would have no idea what's going on and if there was any notice they are changing companies.

    I got in contact with the company demanding service charges explaining the situation and why they simply couldn't find my name as the owner of the flat, the answer i got back from them was - "In regards to the name on the account. Under the terms of the lease the responsibility lies with the leaseholder to report any chance of ownership of the leasehold title. As to your point not knowing how to contact ourselves all notice boards at the development have our full contact details posted on them. Therefore full payment is due within 10 working days or it will passed onto a DCA"

    i have letters from the solicitor i used upon exchange to say he has charged me for notifying the managing agency of the new title under my name. The freeholder uses now 1 company to take ground rent and deal with sub-letting etc and this company to take service charges. The ground rent company have had my contact information from day 1 and have always known that my name is on the title from March 2008.

    i never knew what so-ever that the companies had changed over and never was i notified, even though they mention it was posted on a notice board in the block.

    what can i do!?

    sorry if i have made this confusing, i am trying to get my head round it.

    Thank you in advance for your help.

    #2
    1. As leaseholder, you need to let the freehold reversioner L (or its agent) know who and where you are.
    2. Just after your acquisition, this is done by your solicitor who notifies L ('Notice of Transfer').
    3. If your address changes during your leasehold ownership, you again have to notify L.
    4. Those are loosely called 'upwards' Notices.
    5. Correspondingly, if L1 transfers the freehold reversion to L2, there is a similar- statutory- requirement for 'downwards' Notice.
    6. PLUS any such transfer might trigger statutory rights for the collective leaseholders (Right of First Refusal).
    7.All of the above applies whether you are owner-occupier or sublet; in the latter case, you might need L's consent if the lease says so.
    8. Finally, ground rent demands must be in a special format- again statutory.
    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


      #3
      Is there no grounds for negotiation to give you a payback period - after all, whilst the money is still due, its through their mistake that you were not formally invoiced.
      [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

      Comment


        #4
        Originally posted by medievil2003 View Post
        i have letters from the solicitor i used upon exchange to say he has charged me for notifying the managing agency of the new title under my name. The freeholder uses now 1 company to take ground rent and deal with sub-letting etc and this company to take service charges. The ground rent company have had my contact information from day 1 and have always known that my name is on the title from March 2008.
        .
        I am willing to bet that this is the classic mistake where there is third party manager under the lease or RTM Co.

        With the freeholder and agent 1 collecting ground rents, and another party eg YOUR BLOCK OF FLATS LTD running and collecting service charges, most often assisted by a managing agent agent 2, notice gets sent only to the freeholder, and the others go in ignorance.

        While silly to ignore your contact, they cannot act on the letters and and a copy of a notice at the least.

        This is a problem with leases still forgeting to require service of notice on both parties, or solicitors running sausage machine conveyancing not even sending the notice as a courtesy to agent 2. As they usually get management info accounts insurance etc from them they are well aware of their existence. ( Take notice right click and email - as a courtesy copy notice sent to FH, no fee due to you)
        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


          #5
          Hi, thank you for your replies. I didn't realise there was any response, my apologies.

          Firstly, 'MrJohnnyB': "Is there no grounds for negotiation to give you a payback period - after all, whilst the money is still due, its through their mistake that you were not formally invoiced." i have received a letter from the company who act on behalf of the actual management company, so that answers your question 'leaseholdanswers'. Your completely right, there is one company that take my ground rent, which i have always paid from the date of the exchange, then there is another company who as above, act on behalf of the property management. This 3rd party company are demanding full payment, without negotiation.

          As quoted from their letter: "Accept this letter as a final opportunity to resolve the issue but i would advise that unless payment is made and the necessary Notice is served within seven days from the date hereof legal action will be commenced in view of the Breaches of Covenant under the Lease. In this evtually legal costs will be charged to you in addition to the outstanding debt".

          Their reply to one of my emails to them was that they couldnt find my name under the title, it took me 5 mins to log onto land registry and find that it stated my name.

          This is also another quote from their letter: "We cannot trace receiving any information from your Solicitors concerning your purchase which i understand occured approximately one year ago", i purchased the flat early 2008!! are their files completely messed up?

          Another quote: "When you purchased the property your solicitors should have sent us a Deed of Covenant in respect of the matter and advised of the fact that you are sub-letting the property together with an alternative address for invoicing" to cut this part short, when i purchased the property - the property company 'x' who were in charge of demanding service charges, either went bust or lost the contract. It was only until last year that my research leads me to believe that this new company writing me the letter took over. I have proof from my solicitor that he sent all letters to 'x' company stating that i have a correspondence address of "...." and that i would like to pay the service charges on a monthly basis & to forward all direct debit forms....I never received anything back, neither did my solicitor.

          It seems to me that the 'x' company who disappeared didn't pass on all documents or just simply lost them, so now this new property management company are trying every angle to push this money of out me for something they cannot find. I take it the property management company who demand service charge have easy contact with the company who demand ground rent?? If so, they would have found my correspondence address to send all invoices & outstanding + future payment requests. As they have been receiving payments without delay.

          My solicitor confirms and in letters to all parties back in 2008 that i had paid the 'Notice Fee' and advanced service charges. It took my solicitor 5 letters chasing the property management company. Where there was no reply, it was therefore understood that they have updated their records and know where to sent the demands too.

          One last thing, i promise! one letter from my solicitor sent to the property management (the one who takes ground rent), he said he had received a confirmation that a Deed of Covenant is not required for this property??

          Your advice is greatly, greatly appreciated on every aspect!!

          thank you.
          Last edited by medievil2003; 14-12-2010, 21:04 PM. Reason: spelling

          Comment


            #6
            Your post is a little confusing but it seems that leaseholdanswers was right in that service charges are payable ultimately to a residents management company (RMC) which, via its agent, provides services to the block. The RMC is entirely separate from the landlord, to whom ground rent is payable via a different agent. The two companies / agents probably have very little contact with each other and no access to each others records without co-operation, which cannot be assumed. If so, you need to bear in mind that the RMC is a non profit making company and you have probably caused the agent difficulties in terms of cash flow. They still have to provide the services, how do you suppose they've been paid for? A 5 minute search of Companies House would have given you an address for the RMC, which is presumably named in your lease.

            Going forward, make them a decent offer of repayment and they should accept. £500 per month would probably tempt me for a debt of that size, it's probably a better deal than they'd get from a court.

            Comment


              #7
              Why is this a problem? You knew there were service charges when you purchased and no doubt put at least that amount to one side knowing that the bill would come.

              Didn't you....Surely you didn't spend it on something else.....

              If you didn't why should your neighbours subsidise your contributions, after all the agent only controls your collective monies to pay for communal services, it's not theirs, there is no profit from which to allow for "bad debt"......

              Even if the former agent was a mess, and the new one less than quick to answer, you should at least have the majority of these monies set aside. While it is not your fault, you do have a responsibility to resolve issues, its in your own interest, and cannot assume that the agent has to do all the work.
              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


                #8
                Originally posted by medievil2003 View Post
                Hi, thank you for your replies. I didn't realise there was any response, my apologies.
                To track replies, use LZ's "SUBSCRIBE TO THREAD" facility.
                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
                  Hi, its not a problem. I know my responsibility to pay and i do understand that all payments are due. When this new company was aware where to contact me my first response to them was i am not avoiding paying the moneys outstanding. There are a few things that need to be clarified.

                  Money, unfortunately went on something else. They will have to come to some sort of agreement with me so i can pay it off.

                  The new agent is asking for the deed of covenant, my solicitor it saying he got a confirmation that my flat didnt need one - they have gave me 7 days to provide this. The solicitor still confirms its not needed.

                  On the agents side of things, it was from the start that we had asked for payments to be taken out via direct debit and for them to now even show any real sign of looking for me to collect this money, yet for me to chase them up shows a sign of poor responsibility on their part. What was i meant to do? None of the parties involved where answering my letters nor my solicitors letters asking where do we pay and how.

                  I cant afford to appoint my solicitor again, it was expensive enough at the start.

                  Comment


                    #10
                    Advice on what to do, but first please see why you need to review your perspective

                    They dont have to come to an agreement with you to all. You are borrowing from your neigbours.

                    I am not saying this to be horrible but to explain that you are not paying the council or the electricity board, who build into charges payments that are late or in default. That cannot be put into a SC budget.

                    Even if they could have done a better job, your lease has the ManCo name, you are a member or shareholder( solicitors would have told you) and could contact the directors, who are your neighbours and ask them to intervene.

                    What To Do:
                    1:So write and explain that due to unfortunate personal circumstances, the money put aside ( while waiting for you to respond) had to be used, and therefore you would like to pay x over y months* plus any interest that the lease allows ( check your lease).

                    2: Have a look at your lease for the clauses re subletting and see if there is an reference to deed of covenant and post the entire clause here so we can suggest how to reply to the agent eg clause x says do y, no requirement for a deed of covenant ( so on your bike mr agent)

                    3: Ask the agent who the directors of the management company in the lease and contact them re arrears.
                    * see if the agent has a complaint policy of they are ARMA or RICS ( on their website or letter head) to make a complaint about non response.
                    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


                      #11
                      Learning

                      Leaseholdanswers, thank you for your continued help & advice.

                      I do see where your coming from, even though its too late - i am taking your advice with much appreciation. I know it was my stupid error for not chasing it up a lot more, when i bought the flat i was only 19 with no guidance around me. (No excuse i know )

                      I will have a look at the lease again tonight, i have another question. I know i may have asked it here before but someone said something different...The lease that i currently have is that of the previous owner of the flat, it has their names and addresses at the back. Should this have been put into my name?

                      Also, because i heard nothing from one of the companies - i came to understand in my lease that i was not allowed to under-let/sublet the property without giving them formal notice of this...When i bought the place, i had a tenant stay there for 6 months and then i read my lease again - if i had no confirmation of acceptance to sub-let then i would be in breach of my lease. So when the 6 months was up on the tenancy agreement i decided to stay there my self. Now, the mortgage has gone up, i really want to get some tenants in for Jan. 2011 so i can stay with my parents, but i am holding on because i dont know where i stand again.

                      When i had the first tenant in, i sent copies and copies of the forms to sub-let the place to the property management company (the one who still is around now that collects ground rent), i have special delivery receipts, pics of faxes, emails etc. Never heard a word from them.

                      As the ground rent demands are from a seperate company, of which i have always been paying - should i just notify them again that i would like to sub-let it for Jan? do you think they wouldn't allow this because of service charge payments outstanding?

                      In regards to your last post, are the chances slim that they will accept a payment plan? I simply cannot afford to pay 3.5k. and i dont want this to go to court or go back to the mortgage lender.

                      Thank you so much so far!

                      Comment


                        #12
                        Originally posted by medievil2003 View Post
                        I will have a look at the lease again tonight, i have another question. I know i may have asked it here before but someone said something different...The lease that i currently have is that of the previous owner of the flat, it has their names and addresses at the back. Should this have been put into my name?
                        That's fine you have bought an assignment of an existing lease and therefore the names need not be changed.

                        If as we suspect there is a three party lease the landlord, the LL, who you pay GR too, the party to the lease manager( not then managing agent) probably something like your block of flats man co limited lets call it ManCo, and the original buyers who you have replaced, can you look a the lease and identify ( no need for names !)

                        1: The landlord
                        2: The Man Co

                        And then look in the lease for any reference to notices and consents for assignment transfer or subletting, but beware it is often in several places. Please post this ( names etc to be deleted) so we can comment.

                        While you should notifiy LL and ManCo via the agent, the specific requirements plus any fees - sorry- can be identified so you cna do it without problems.

                        If you write and explain as suggested, then this should be acceptable as a pragmatice step. if you get the wrong response, then post and we can suggest how to deal with that.

                        Most welcome.
                        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


                          #13
                          Originally posted by leaseholdanswers View Post
                          That's fine you have bought an assignment of an existing lease and therefore the names need not be changed.
                          Yes. In this context, what counts is the name on the HMLR Proprietorship Register of the leasehold title concerned.
                          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


                            #14
                            Good Morning.

                            The section in the lease which i think you refer too are as below:

                            (7) During the last seven years of the terms hereby granted not to assign underlet or part with the possession of the demised premises or any part therfor or the said fixtures (if any) without the previous consent in writing of the Lessor such consent not to be reasonably witheld

                            (8) not to assign underlet or part with the possession of part only of the demised premises

                            (9) Within one calendar month after any such document or instrument as is hereinafter mentioned shall be executed or shall operate or take effect or purport to operate or take effect to produce to the lessor's solicitors either the original or a certified copy of every assignment transfer mortgage or legal charge of this lease of the demised premises and also every underlease of the demised premises for substantially the whole of the unexpire term and every assignment of such underlease and also any probate letters of administration order of court or other instrument effecting of evidencing a devolution of title as as regards the term hereby granted or any such underlease as aforesaid for the purpose to pay a reasonable fee being not less than £30 in respect of each document or instrument so produced

                            3. In accordance with the said general scheme for the benefit of the Lessor and the Lessees of the remainder of the blocks the Lessee HEREBY COVENANTS with the Lessor the company and the lessees for the time being of the other parts of the blocks and with each of them that the Lesse will from time to time and at all times hereafter during the said term.

                            4. THE Lessor HEREBY CONVENANTS with the Lessee and the Company as follows:
                            (1) That the Lessee paying the rent hereby reserved and performing and observing the several covenants conditions and agreements herein contained and on the Lessee's part to be performed and observed shalland may peaceably and quietly hold and enjoy the demised premises during the said term without any lawful interruption or disturbance from or by the Lessor or any person or persons rightfully claiming under or in the trust for it.
                            (2) That the lessor will require every person to whom it shall hereafter grant a lease of any part of the Blocks to covenant to perform and observe such several convenants conditions and agreements aforesaid and if so required by the lessee will take all reasonable steps to enforce the same and the covenants on the Company's part contained in Clauses 7 and 8 hereof PROVIDED that the Lessee shall indemnify the Lessor against all costs charges and expenses incurred or to be incurred in respect of such enforcment AND the Lessor may require the Lessee to lodge reasonable security against such costs charges and expenses prior to enforcing such covenants

                            5. PROVIDED ALWAYS AND IT IS HEREBY AGREED that: -
                            (1) In case at any time during this demise any dispute shall arise between the Lessee and any other of the lessees or tenants of the Lessor or the owners of occupiers for the time being of any of the other parts of the Property relating to the premises to them respectively deised or any other matters whatsoever in this Deed contained then and in every such case such dispute shall be referred for the determination and award of the Surveyor for the time being of the Lessor whose determination and award shall be final and binding on the Lessee and any other parties to the reference and such Surveyor shall be entitles to require and be paid such fee to be borne in equal proportions by the parties to the reference and to be paid to such surveyor at the time of making the reference.
                            (2) If the rent herevy reserved or any part thereof shall be in arrear and unpaid for twenty-one days after becoming due and payable (where formally demanded or not) or if there shall be any breach of any covenants or agreements on the part of the Lesse herein contained then and in any such case it shall be lawful for the Lessor at any time thereafter to re-enter upon the demised premises or any part thereof in the name of the whole and immediately thereupon this demise shall absolutley cease and determine but without prejudice to any right of action or remedy of the Lessor in respect of any antecedant breach of any covenant or agreement on the part of the Lessee herein contained.

                            I have tried to pick out the points which i think are important, let me know if you need any thing else?

                            Thanks.

                            Comment


                              #15
                              (7) restricts dealings in the final seven years.
                              (8) bans dealings with part only.
                              (9) requires Notice of dealings.
                              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

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