Leasehold Service Charge - excessive deficit charges, what are my rights?

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    Leasehold Service Charge - excessive deficit charges, what are my rights?

    Hi,

    I was wondering if someone could kindly give guidance to leaseholder rights on service charges.

    Basically, my managing agent has billed me for a further £1899 (on top of a service charge that is already 3000 a year with no logical explanation given for it being so expensive!) for a deficit dating back to 2012/13 year of accounts where the financial statements have "now been completed" (just short of the 18month cut off for what is deemed "given in reasonable time"!).

    The managing agent is always responsible for budgeting and application of the service charge, and payments are made every 6 months to cover the service costs. I do not therefore understand how they can justify claiming that they under charged us by 63%!

    I have searched the internet but struggle to find information on what rights a leaseholder really has to challenge the charges, beyond the following:

    You have the right to apply to the First-tier Tribunal to ask it to determine whether your lease should be varied on the grounds that it does not make satisfactory provision in respect of the calculation of a service charge payable under the lease.
    You have the right to write to your landlord to request a written summary of the costs which make up the service charges. The summary must-
    cover the last 12 month period used for making up the accounts relating to the service charge ending no later than the date of your request, where the accounts are made up for 12 month periods; or
    cover the 12 month period ending with the date of your request, where the accounts are not made up for 12 month periods.
    The summary must be given to you within 1 month of your request or 6 months of the end of the period to which the summary relates whichever is the later.
    You have the right, within 6 months of receiving a written summary of costs, to require the landlord to provide you with reasonable facilities to inspect the accounts, receipts and other documents supporting the summary and for taking copies or extracts from them.



    However i cannot find which governing bodies look into this matter or how to apply to the first tier tribunal (or what the costs are)?

    Is anyone able to advise if i have any legal grounds to challenge this?

    #2
    You need to see the accounts in question with the income and expenditure sheet.

    Comment


      #3
      Explanation of FTT process here: http://hmctsformfinder.justice.gov.u...s/t541-eng.pdf
      To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

      Comment


        #4
        There is no point trawling the internet just because you are cross.

        63 % is based on something, you take the budget for that year and the subtotals for individual expenses and see how they vary to actual expenditure totals in the accounts.

        You can then see that repairs were 20 % over or insurance 30 % over you can ask why.

        Only when you have that information can you act not liking paying an extra 63% is not enough, no matter how eye watering that is , sorry.
        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
          AS LHA has explained, service charges are not (or at least should not !) be plucked out of thin air, they are based on actual expenditure that the freeholder has spent on the property for your benefit.

          As mentioned, you have rights to ask for a breakdown of this, under S21 and 21 of Landlord & Tenant Act 1985, and if an application was made to the FTT, then the Fh would be forced to prove actual expenditure and even then whether costs were reasonable.

          The grounds to challange amounts are under S19 and 27 of same LTA 1985, but first have a look at the summary (assuming the FH provides one).

          It is quite feasible tyat there are increased costs but this depends on provisions of the lease and relevant law (although you point out he appears to have complied with the 18 month rule)
          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
            You can get free advice and download free guides to many leasehold subjects including making application to FTT from LEASE ( Leasehold Advisory Service ) :

            http://www.lease-advice.org/publicat...nt.asp?item=18

            Comment

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