Failing managing agent appointed by freeholder?

Failing managing agent appointed by freeholder?

10:59 AM, 3rd June 2021, About 6 months ago 21

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I’ll briefly set the scene: I am one of 13 leaseholders in a block of flats. There is a block management company with 4 directors, 3 of whom are leaseholders (me being one). In addition, there is a managing agent appointed by the freeholder. One of the directors of the managing agent is the 4th director of the management company.

I have been very unimpressed with the service provided by the managing agent and would like to see them replaced, however, both other leaseholder directors want to “give them another chance”. Unsurprisingly, I have not discussed matters with the 4th director, who clearly has a conflict of interests.

The most recent issue concerns the annual accounts to 31 March 2020 (produced in February this year) that showed a worrying 40% of service charges overdue (up from 8% the previous year). As well as wanting to understand how this was allowed to happen, I am anxious to know the current position. Accordingly, in late April I asked the managing agent for a 31 March 2021 Service Charges Due figure. Now, 5 weeks on, I am still waiting for the information, despite numerous chases by me and promises from the agent.

What are my options?

Ian Cognito



Comments

by Seething Landlord

12:18 PM, 3rd June 2021, About 6 months ago

You might consider requesting copies of the cash, income, expenditure and debtor records and doing your own analysis of the current position. This should enable you to meet your responsibility as a director to ensure that the finances are being managed correctly.

The single "service charges due" figure that you have asked for would probably not reveal any helpful information.

by Ian Cognito

12:42 PM, 3rd June 2021, About 6 months ago

Reply to the comment left by Seething Landlord at 03/06/2021 - 12:18
From my part, the single "service charges due" figure is the starting point. However, in some respects it is the end point, as it can only be arrived at by the MA having combined the individual service charge accounts of all 13 leaseholders.

Based on how the service charge invoices are set out, how the accounts are presented and how the budget is prepared, I strongly suspect that the MA does not know who owes what.

Perhaps I should contact the Property Ombudsman?

by Seething Landlord

13:10 PM, 3rd June 2021, About 6 months ago

Reply to the comment left by Ian Cognito at 03/06/2021 - 12:42
"I strongly suspect that the MA does not know who owes what".

You may well be right, all the more reason to get hold of the full financial records and work it out for yourself.

by TrevL

13:19 PM, 3rd June 2021, About 6 months ago

I wonder how many blocks of flats are suffering from a shortfall in various leaseholders paying up?

I imagine, through the pandemic, if money became tight, service charges might be one of the first things that you don't pay.

by Ian Cognito

13:55 PM, 3rd June 2021, About 6 months ago

Reply to the comment left by TrevL at 03/06/2021 - 13:19
You might be right, however last year's accounts showed 40% of service charge overdue at 31/03/20. i.e. pre-pandemic.

by Gracie

11:05 AM, 5th June 2021, About 6 months ago

Issue them with the below requests, there is a template provided to ensure that it is done correctly. There are specific requirements & timelines.

https://www.lease-advice.org/faq/what-should-a-summary-of-the-service-charge-account-under-section-21-of-the-landlord-and-tenant-act-1985-contain/

https://www.lease-advice.org/advice-guide/service-charges-other-issues/

by Karen Holtge

13:28 PM, 5th June 2021, About 6 months ago

I believe even if the service charges were owed by previous leasees, the debt attaches to the current owner, and can be enforced against the current owner. They would then need to go back to their conveyancing solicitor and establish why this was not squared up on purchase.

by Ian Cognito

15:44 PM, 5th June 2021, About 6 months ago

Reply to the comment left by Gracie at 05/06/2021 - 11:05
Hi Gracie

My problem is not with the landlord failing to provide the service charge account, it is with the managing agent not providing a recent figure of service charges due (i.e. a total figure for money outstanding from the 13 leaseholders).

Of course, if the managing agent is working for the landlord, then I could go to the landlord, however, as far as I can make out, there is no requirement to provide the information until six months from the end of the 12-month accounting period.

I do not want to wait six months to find out how much money is owed.

One of the links you kindly provided lead me to booking a telephone appointment for the 14th June with the LAS, so fingers crossed!

by Ian Cognito

15:47 PM, 5th June 2021, About 6 months ago

Reply to the comment left by Karen Holtge at 05/06/2021 - 13:28
Hi Karen

Yes, you are correct, but that is not the problem I'm trying to solve! What I initially require from the managing agent is a total figure for service charges due from the 13 leaseholders.

by David Price

16:16 PM, 5th June 2021, About 6 months ago

Reply to the comment left by Ian Cognito at 05/06/2021 - 15:47
As a director of the company you have joint and several liability for the financial health of the comany. You should not be asking for financial information you should be demanding it, for without you cannot properly direct the company.

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