Changes to Service Charge following change of management company

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    Changes to Service Charge following change of management company

    Hi

    I am a leaseholder in a development where the landlord has appointed a new management company. The new company has sent through its first bill which gives us the option to pay in 10 installments by direct debit or in full for the year. If payment is made over 10 months they charge a £20 admin fee. They are also wanting some money we owed to the last management company. The previous company took service charge payments over 12 months and didnt charge any admin fee so my question is can this new company change the payment structure and add on a fee when the decision to change company wasn't any of the leaseholders but that of the landlord. Also the money (£300) I owed to the last management company was withheld because they provided no services for an entire two years, to me this is my money and I witheld it for good reason so can the new company request this?

    Thanks

    #2
    L and its Managing Agent cannot unilaterally change what the lease states.
    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
      If the lease states that payment is required annually in advance then they don't have to offer you an installment plan at all.

      The £300 was owed to your landlord, not their agent and so the debt still stands. You can of course dispute it by making an application to the LVT.

      Comment


        #4
        OK two things.
        1: Service charge payments. You have no right to DD or monthly payments, only the payment frequency in your lease. Based on your post that appears to be one annual payment. Any other frequency is entirely at the discretion of the landlord, and as there are now 10 transactions to process rather than 1, it is sensible to charge an admin fee. As this is an entirely voluntary arrangement, the fee is not protected by the legislation.

        Bear in mind that any comparisons you might wish to draw with paying council tax electricity etc are invalid. Landlord and tenant is a specific area of law and business and operates on it own practices and procedures, as is the type of contract, the lease, that is very different to a say 2 year utility contract.

        2: The money is not "due" to the old company - all monies are due to the landlord and are merely handled by the agent. Any arrears balance will be therefore be carried forward. If you dispute the cost then ensure that you look a the end of year accounts to see if the amount that they invoiced each year was actually spent.

        SC is most often an annual estimate of expenditure so if you paid say £100 towards cleaning, it may be that the actual cost, shown in each years accounts are £50, reflecting the lower standard of work. Your lease should have a provision that any difference in the estimate and the actual is adjusted.

        Otherwise you might wish to challenge the expenditure at the LVT. See lease_advice.org.

        At least the landlord has changed the agent and they can be expected to improve matters.
        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

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