Excessive Service Charges

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    Excessive Service Charges

    Hopefully this is the right forum to post in, if not my apologies.

    I am the leaseholder of a 1 bed ex local authority flat in Hackney, London. The block is council owned, and is run by the management company ‘Hackney Homes’ in partnership with Hackney Council. As far as I am aware, there are 4 leasehold properties in our block of 30 units, however for purposes of services and management, we are grouped with a much larger estate. And recent years have seen, what I feel to be, excessive increases in our service charges.

    I bought my flat in 2004. Total service charges since then have been as follows:

    03/04 - £635.94

    04/05 - £855.05

    05/06 - £1385.54

    06/07 - £1161.86 (estimated)

    07/08 - £1844.50 (estimated)

    This shows that the charge has trebled in five years, and the increase may be even greater if the latest estimate is too low. The apparent slight reduction in 06/07 is misleading because it is an estimate and could still increase significantly. In any case, this is still a very high figure. How is it possible that charges have risen so much since Council services were privatised? Surely privatisation was supposed to reduce costs, not increase them?

    Here are some of the principal charges for each year from 04/05 to 07/08. In each case the last two numbers are estimates and could therefore increase.


    Block cleaning

    03/04 £21.39
    04/05 £22.03
    06/07 £22.03
    07/08 £215.44

    Heating and hot water fuel

    03/04 £14.20
    04/05 £423.50
    06/07 £213.68
    07/08 £691.76

    Heating and hot water has risen by 4781% in 4 years! Block cleaning has risen by 1007% in 4 years, of which 978% is in the last year alone. I would like to suggest that these figures are ludicrous and unsustainable. Heating and hot water fuel alone now costs more than the entire service charge five years ago. Fuel costs have not risen by 4782% in four years.

    Further, with respect to heating hot water, these flats require almost no heating as the block is very well insulated. I hardly use the radiators at all, even in winter, as the flat is warm without them. Yet the fuel charge for 1 flat is now estimated at £691.76, which is nearly £21,000 for 30 flats. A quick survey of friends and family tells me no one pays anywhere near that amount for heating. An average being £400 per annum for a 1 bed flat, and it is also of note that we are charged a further £250 for maintenance. If the Council is paying £21,000 in fuel to heat flats that require very little heating, I would like to suggest that the Council is grossly overpaying and this service could be managed very much more efficiently and cost-effectively. With respect to cleaning, the quality of estate cleaning is currently low. It has certainly not improved by 978% in the last year.

    It is clearly unacceptable that a one bedroom flat in a small block of 30 flats and valued at approximately £140,000, a very low amount in Hackney, should now attract an unfairly exaggerated service charge of £1844.50. I agree that it is fair for leaseholders to pay their share, but that does not mean they should have to pay an unfair amount. Who can say for certain that these costs are fair? Have they been correctly calculated? Are services being mismanaged and leaseholders overcharged? 4 flats in the black are leasehold, which means the other 26 flats are owned by the Council. If there is mismanagement of services, or incorrect accounting, this could mean Council taxes also being wasted in the management of the 26 Council-owned flats.

    Finally, I have checked with local estate agents. These figures are very greatly in excess of service charges levied by private landlords in private blocks in this area. This would clearly indicate that the Council's service charges cannot be justified. I would like to know how private landlords can manage their services more economically than the Council.

    I have attached a complete breakdown of estimated and actual costs.

    I hope this post isnt too long winded, but I felt it prudent to fully outline my concerns. If anyone can provide any advice or assistance, it would be greatly appreciated.

    Many thanks

    Dom

    #2
    As freehold reversioners, the Council are governed by the same legislation as private sector: see s.18-30 of LTA 1985. Were the flats sold on the RTB scheme? Have the Council circulated proper accounts in accordance with those provisions and have they also complied with what the leases require?
    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
      Do council tenants have the luxury of a Housing Ombudsman to investigate complaints on excessive service charges ?

      Comment


        #4
        Originally posted by tenant29 View Post
        Do council tenants have the luxury of a Housing Ombudsman to investigate complaints on excessive service charges ?
        If tenants: yes.
        If lessees: no.
        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


          #5
          Find a council tenant in the block to raise the problem to the Ombudsman ?

          Comment


            #6
            Hello Dom, did you manage to get any where with this? My service charge is going crazy too. Started at around £500.00. Did you manage to get it reduced? Did you try the LVT?

            If any one wants to post their service charge for their ex-local authority property/flat, please do. It would be great to have a comparison.

            I pay:

            £1977.11, London Borough of Newham, 14th Floor, Tower Block


            Cheers

            Comment


              #7
              hang on in there dom

              i must remain annoymous for 3 and a hlaf months longer until the case is finally heard so i cannot disclose any specific details yet until the court papers become public documents after the court decision is announced.

              yes you can complain to government ombudsman they are at millbank tower sw.i do a google search and phone them they will send you a form .

              yes hackney homes are supposed to issue breakdowns of costings but they won't unlees you get a firm solicitor or firm person to insist they send you a breakdown and until they do you are withholding some payments.

              you are legally entitled to do this if you have a valid dispute they will say you do not have a valid dispute (but this is by their criteria not the laws or the dept of commuities who are responsible for such matters) this is outlined in a booklet hackney homes is supposed to have sent you.

              you can also go to a LVT leasehold valuation tribunal but it is advisable to do this via a solictor because dispute common myths it is not entirely informal. it is informal in it's settings and procedures . but the production of any evidence still as to adhere to court laws and procedures it can be daunting but not impossible to do by a person compotent in administration. you must follow precisely the tribunals directions on how they want evidence presented otherwise you will loose the case and hackney will win by default.

              speak again soon after the case is finally heard and i can give you more info

              Comment


                #8
                progress report

                Case has been heard
                but it ended in frantic compromise negotiations between their legal counsel and our legal counsel, literally minutes before the court was about to say, "o.k that's it we have given you enough time to settle... now we start the proceedings."
                Basically they avoided being cross examined in the LVT because , the LVT has limited powers to award costs to Applicants, and we were forced to be business like and look at the differences between what we were fighting for
                (that is the amount we had already effectively shown was an excessive overcharge and they had removed this part of their claim some months earlier, and the amount still in dispute was about equal to one days cost to us at LVT) and the extra costs of another two or three days of LVT hearings, the case was that complex.

                In a nutshell we could not afford to continue

                if you are fighting such a case it might be advisable to find a leaseholder who is entitled to legal assistance and let them be the person named on the application, but the rest of the lesses in the block contribute to evidence and witness statements etc etc.

                need to think for a while and decide what to do next. i will be back soon

                Comment


                  #9
                  Hillingdon Homes are just the same.

                  Ours have also risen from around 500 per year in 02/03 to 1490 in 06/07. The local leaseholders association fought and got a 260 rebate, but once again the charges are due to rise by 20%. Caretaking is now charged at over 30.00 an hour, and all they do is sweep & mop the lobby, litterpick, clean inside communal windows and rotate bins. That is about 200% in overheads as the caretakers are on 10.00 an hour max. I am convinced all the authorities get together to compare what they are charging and set their rates to suit.

                  If tenants had 10-20% rises every year there would be an uproar, but leaseholders are just expected to cough up and shut up.

                  Comment


                    #10
                    Originally posted by Lindsay04 View Post
                    Hillingdon Homes are just the same.

                    I am convinced all the authorities get together to compare what they are charging and set their rates to suit.
                    yes they most certainly do just do a google search on any local authority name along with some of these words in the keyword phrase

                    leaseholders, service charges, decent homes, major works, etc etc

                    mix and match the words and for good measure throw in the names of some officers you know to be involved in the leasehold department of your local council, get these from letterheads and other correspondences and literature the council sends you.

                    you won't be surprised to learn that if you read between the lines of the documents out there on the net. That your local council regards leaseholders as cash cows and holds them in contempt.

                    my assessment and opinion not that of the editors or owners of this forum

                    Comment


                      #11
                      Ensuring you are not charging less than the others !!!

                      Originally posted by Lindsay04 View Post
                      Hillingdon Homes are just the same.

                      I am convinced all the authorities get together to compare what they are charging and set their rates to suit.
                      yes they most certainly do just do a google search on any local authority name along with some of these words in the keyword phrase

                      leaseholders, service charges, decent homes, major works, etc etc

                      mix and match the words and for good measure throw in the names of some officers you know to be involved in the leasehold department of your local council, get these from letterheads and other correspondences and literature the council sends you.

                      you won't be surprised to learn that if you read between the lines of the documents out there on the net. That your local council regards leaseholders as cash cows and holds them in contempt.

                      my assessment and opinion not that of the editors or owners of this forum

                      Comment


                        #12
                        TOtally agree with Dombuz. Newham council charges me around 1300 for services they do not provide. the "video surveillance" they claim to have is not in operation and a lady with her children got recently attacked by someone how walked in as they were waiting for the lift and got her bag snatched ! also someone urinated on the lift (which has a camera) but.... nothing could be traced...
                        the cleaning services are non existent... so i just wonder... what do all my money go to ?
                        placed 2 complaints but they feel they don't need to reply or justify their costs.... appalling really.

                        Comment


                          #13
                          Then you use the complaint procedure, and escalate as required, take it to the ombudsman, and if required keep a record and use this and challenge at the LVT.
                          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
                            Then you use the complaint procedure, and escalate as required, take it to the ombudsman, and if required keep a record and use this and challenge at the LVT.
                            Agreed, ultimately you may have to be prepared to challange charges through LVT/Court which of course is a worrying prospect for many a fact Im sure many FH's are aware of.
                            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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