Landlord Recovery of Service Charges Exceeds 100%

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    Landlord Recovery of Service Charges Exceeds 100%

    I have a long lease in a property and have a Tribunal hearing next month against my landlord over the reasonableness of the service charges.

    One of the issues in dispute is that I am paying more than my fair share in the service charges with the result that the landlord is currently recovering more than 100% of his outgoings. I can prove that.

    Could someone kindly help me with the following:
    1- Which legislation prohibits the landlord from recovering more than 100%, i.e. Act, Section, etc...
    2- I am told that this legislation was effective in 2005. Is that correct?

    Thank you

    #2
    What does your lease require?

    Comment


      #3
      Originally posted by Tipper View Post
      What does your lease require?
      I agree, there is nothing in law about this, the lease will stipulate how the service charge is calculated, normally along the lines of 4 flats each pay 25% but sometimes more complicated.

      The is law that allows faulty leases that do not collect 100% to be rectified, Im not sure what happens in your position, I would of thought that any overpaid amount that once all services have been paid should show as some sort of credit in the service charge account ?, similar to a reserve or sinking fund, it wouldn't be acceptable for the freeholder or management agent to simply pocket the extra surplus amount, it has to 'go' somewhere.
      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


        #4
        Tipper,

        My lease requires me to pay 3/11th of the service charges. However, adding the shares in the building, we get to 13/11th.

        I discovered that my landlord, in response to the amendment of the law in 2005, has adjusted all the shares for the other 4 flats to be with a denominator of 13th, i.e. 3/13th or 2/13th, except mine which he kept at 2/11th.

        The result is that he is now collecting 10/13th from the other four flats and 3/11th from me which totals 104.3%.

        Just to be clear, there were no variations in the leases. I have seen the lease of my neighbour which stipulates that he pays 2/11th but his service charges statement are charged at a share of 2/13th.

        I appreciate any help as thee overcharging over the last few years is about £5000, so not negligible.

        Comment


          #5
          how many flats are there ? and there is usualy only one share certificate issued per flat.

          Comment


            #6
            andydd,

            The landlord is not the most honest chap so he has pocketed the surplus. Which brings me back to my original questions:

            What section of the law prohibits the recovery of more than 100%?
            When did become effective? I am told it was in 2005.

            Thank you

            Comment


              #7
              ram,

              There are five flats but as mentioned the contributions towards the service charges are not equal.

              Comment


                #8
                If the service charges total less than 100% the landlord has no automatic right to recover the shortfall; he has to go to the FTT and argue for an adjustment

                Where it's more than 100% he is entitled to collect the charges based on the % in the lease until such time as the lessees make an application to the FTT to get it amended.

                There is no legislation to automatically deal with either scenario and of course no formula to suggest how it is amended

                Comment


                  #9
                  I have already made an application under s.27A to deal with unreasonable charges, including my excessive share. However the landlord has responded that the Tribunal has no jurisdiction over the share under s.27A. I'm not sure if this true or not but that seems like a convenient and vexatious tactic.

                  Comment


                    #10
                    I don't agree with the FH as if the amount spent on services comes to £1000 but £1100 is collected in service charges then there is either a surplus which should show on the account listing and be credited to next years amount or that the FTT can use the term reasonable in amount in quite a broad way and find that it is unreasonable to recover more money than is actually owing.

                    I don't see any way that the surplus amounts can be kept by the FH, its important to remember service charges are not a profit for a FH, they are to recoup him for costs expended, nothing more nothing less, GR is the profit element and a management fee is to cover any management costs, however this should be a set amount, i.e £100 a year, NOT £100 a year plus any surplus.
                    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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