Payment of Service Charge

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    Payment of Service Charge

    I would be grateful for some advice on the following:

    I own a flat within a block containing 7 flats. For the past few years the block has not been been managed by any managing agents. The previous agents pulled out when they were not being paid by all Lessees. In addition when the previous agents requested payment towards major works the majority of Lessees did not contribute and the works were not carried out.

    The Lessor has now appointed new agents, but I am concerned the same thing will happen again. I am therefore reluctant to make my service charge payments as I feel I may as well throw my money in the bin as the agents cannot manage the block without everyone contributing their share.

    I accept from my lease that I have to make payment but feel the agents will take their fee for a few years do nothing and pull out again.

    Can anyone give any advice on how to deal with this?

    Ideally I'd like to self manage or buy the freehold, but the other Lessees are not interested making things even more difficult.

    Thanks and Regards

    L

    #2
    This not uncommon and I saw this in the recession of the late 80's, as well as turning around blocks.

    It's time to do two things
    1: get your neighbours together to take a measure of the reaction to charges and whether they can be relied to do money eating tasks like cleaning and gardening, and the odd job, where safe to do so.

    2: work with the agent.Some are quite nice, I will always visit for the offer of cake
    Being aware of your rights you can work with them to
    -ensure that building insurances and quotes are obtained to get good value, and works perhaps shared as in 1
    -help with access and quotes being obtained
    -agree priorities so that non urgent minor works are pooled into one visit not several

    Ultimately you might suggest that they focus on a budget for the year and works that will be done as funds permit so for example Insurance and their fees are a priority, no one works for free, and that of that budget, important things are done first, peicemeal as can be afforded.

    I would certainly not pay in full a this stage and try and agree such a plan.

    Eg Dear Residents here is our budget for the year which is due in x over y periods. Our priority is to pay insurance, utilities, fix the missing front door and will therefore need payment of at least z% of X as matter or urgency. ( This is then caveated with the explanation that this is without prejudice of the terms of the lease and that anyone who doesn't play nice, the full amount is due and the boot shall.. be inserted)

    This will encourage residents to pay some and restore confidence all round, and those that do not pay recovery action can be taken with a framework of payments already considered and in place to incorporate into any proceedings.
    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


      #3
      If the other Lessees are not interested, not a lot you can do, as you
      need their support to apply to manage ( R.T.M. )

      A good agent will sue for none payment of service charges, so
      ask when they are going to sue for unpaid service charges.

      As your lease says you have to pay service charges, then so do the
      rest.
      If the landlord ( who is ultimately responsible ) does not ensure the
      lease is obeyed, ( to pay your service charges ) then you can sue
      the landlord for failing to observe the lease.

      Somewhere in the lease it will state the freeholders ( Lessor )
      responsibilities, such as the Lessor undertakes to enforce the
      convenants of the lease.

      For a small fee, you could apply to the L.V.T. to state the freeholder
      is not observing the lease by getting in owed service charges.

      read your lease and comment on what the freeholders obligations are.

      being nice, as suggested, will not work, as it is clear that the Lessees
      just don't want to pay, so someone has to make them pay.

      R.a.M.
      Last edited by ram; 31-07-2012, 13:53 PM. Reason: last parra added

      Comment


        #4
        Originally posted by ram View Post
        being nice, as suggested, will not work, as it is clear that the Lessees
        just don't want to pay, so someone has to make them pay.

        R.a.M.
        But RAM you are projecting from very narrow experience and I can show you many examples of where this sort of plan has and is even today, working.

        You cannot assume that they just won't pay, there is likely a mix of those that cannot and those that have no trust and will not pay, those that are avoiding paying, and those that would but are worried their contribution will pay for the status quo, an agent insurance and utilities.

        While there are remedies, it is daft to not try a compromise first, even as in your case you tried but know it is lost cause to try.
        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
          Originally posted by leaseholdanswers View Post
          You cannot assume that they just won't pay, While there are remedies, it is daft to not try a compromise first, .
          I can only go on Lew30's post

          "previous agents pulled out when they were not being paid by all Lessees"

          "major works, the majority of Lessees did not contribute"

          this smacks of, Lets not pay, and see if we can get away with it"

          Which is different from your revised post ( following ommitted )_
          "a disinterested developer".

          Yes, by all means do as suggested in post 2, but I still think the
          leaseholders know they can get away with not paying and will
          do so again, as they know it works and they don't have to pay,
          but a good agent will make them pay, and we all assume the
          service charges for maintenence etc, were "required and reasonable"
          so hopfully the new agent will get the place back on track.

          R.a.M.

          Comment


            #6
            Originally posted by ram View Post
            I can only go on Lew30's post

            "previous agents pulled out when they were not being paid by all Lessees"

            "major works, the majority of Lessees did not contribute"

            this smacks of, Lets not pay, and see if we can get away with it"

            Yes, by all means do as suggested in post 2, but I still think the
            leaseholders know they can get away with not paying and will
            do so again, as they know it works and they don't have to pay,
            but a good agent will make them pay, and we all assume the
            service charges for maintenence etc, were "required and reasonable"
            so hopfully the new agent will get the place back on track.

            R.a.M.
            I dont think that you understand the complexities of it. A good agent can see the merit of staging incremental reintroduction of services and charges, and assess what mix of attitudes prevails, and how to deal with the worst cases and encourage the willing.

            It's therefore wrong, and ultimately unhelpful, to simply dismiss anything other than your justifiably tainted outlook, of "won't, shirk, avoid, sue'em".


            "previous agents pulled out when they were not being paid by all Lessees" why should they work for free, why should they stick with bad work, they do have a choice. They might simply only want well paying blocks and not want to manage this which could be as easily awkward non payers to those in dire straits unable to pay or sell.

            "major works, the majority of Lessees did not contribute" -perhaps the agent failed to be imaginative ( in the manner suggested in my edited post which you saw) you might "say that's the work pay now, or else", but RAM that is not always possible. We don't know if the agents made a complete horlicks of the last major works or that everyone knows its the Agent's brother in law.

            So by your own rational your argument fails as it is based entirely on assumptions.

            What I am getting at is that while you've given a range of options, by your on argument, perhaps your conclusion is flawed?
            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


              #7
              Originally posted by leaseholdanswers View Post
              What I am getting at is that while you've given a range of options, by your on argument, perhaps your conclusion is flawed?
              No.

              I said,
              and we all assume the
              service charges for maintenence etc, were "required and reasonable"
              so hopfully the new agent will get the place back on track.

              Means, get the place back on track, get in service charges that were
              unpaid, and do a check on the ability to pay, as against wont pay.

              get the place back on track is an abriviated term for your detailed
              proposals, some of which are also "assumed", and I agree with post 2,
              as I said before.

              But O.P. has to be carefull not to alienate himself with the agent, who
              may object to him putting in maintenence costs / proposals.

              So as you suggest, talk to the agent, who will not know the situation,
              and you can put them right, bring them up to speed.

              Again, unfortunately, I tried to talk to our new agents, WE instructed,
              and it took 3 requests before they would see me.
              I had many things to tell them, so they could manage the place properly,
              but I left after 10 minutes, as they were aloof, condescending,
              arrogant, said they had better things to do, so there was
              no point in continuing the conversation.

              These were the ones we sacked.

              So just be carefull when aproaching the agents, as they think the
              property is theirs, and not the leaseholders. ( We have heard this
              before on here )

              R.a.M.

              Comment

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