How binding is the wording on a lease?
We own a couple of flats in a large block of flats and we are charged service charges set by the size of the flats. However, the new management company has increased one of the flats service charges to much more than the size. They say the percentage charge is in the lease and cannot be changed yet it is a lot smaller flat and has had a lower rate for the last 13 years. ![]()
Can they charge the extra if it is in the lease or do they have to charge what has been the percentage for the last 13 years?
Would love some advise on this
Thank you
David Corless
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Member Since January 2011 - Comments: 12196 - Articles: 1396
10:00 AM, 6th May 2015, About 11 years ago
Hi David
If the increase is significant then it may be wise for you to pay to have a professional contracts lawyer to interpret the contract for you.
A word of warning though; if you have been under paying all this time the management company may well be able to claim the difference between the under-payments from you going back for six years. Therefore, before you make too much noise about this you really need to know where you stand, otherwise you could be in for a nasty shock.
Contract barrister and Property118 member profile >>> https://www.property118.com/member/?id=1945
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Member Since June 2013 - Comments: 646 - Articles: 1
1:40 PM, 6th May 2015, About 11 years ago
the terms of the lease are binding. you could seek rectification of the lease if its a blatant drafting error, eg all the percentages of all the flats exceed 100%.
dont understand how or why you were undercharged all these years. was it just an error or was it result of litigation?
Member Since June 2013 - Comments: 1121
5:38 PM, 6th May 2015, About 11 years ago
I think if this is service charges then anything going back past 18 months cannot be charged. And the terms of the lease are binding. If the proportions are set in the lease then they cannot be changed except by a Deed of Variation.
And if there has been a change if management company was this as a result of Right To Manage or on the whim of the Freeholder?
Member Since May 2015 - Comments: 19
7:36 PM, 6th May 2015, About 11 years ago
hello all thanks for the replies
yes this is a service charge
but in the origional lease it states that the it may vary from time to time
and as the first set of percentages are set out in a letter dated after the original lease does this not take over
also the lower rate has been in operation for the last 14 years
and the flat in question is smaller than others but they are now charging more
I wonder if this would mean all the leases being rewritten as the percentage is wrong
and the landlord said they do not have the sizes of the flats
Member Since August 2013 - Comments: 109
7:40 PM, 6th May 2015, About 11 years ago
I wonder if the other leaseholders will notice a drop in their contributions, if they do they could go after the FH I suppose.
Member Since June 2013 - Comments: 1121
9:35 PM, 6th May 2015, About 11 years ago
Reply to the comment left by “david corless” at “06/05/2015 – 19:36“:
David leases always make the service charge variable so it can increase over time. The lease trumps any letter unless it is actually a Deed of Variation in which case it will say so on the document. Unless the service charge percentage is as it is set out in the lease then it cannot be levied and you can make application to First Tier Tribunal for a determination on what service charge is payable.
Member Since May 2015 - Comments: 19
7:07 AM, 7th May 2015, About 11 years ago
thanks for that