Is new Freeholder liable for previous overcharging?

Is new Freeholder liable for previous overcharging?

10:03 AM, 27th March 2023, About 11 months ago 7

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Hello, I live a in block of flats where the former freeholder (the company is now dissolved) overcharged the service charges: the percentages we paid added up to more than 100%.

The new landlords are fixing the problem but they bought the freehold in 2016. Are they responsible for the earlier overpayments?

Our Leases have the usual clause intending to bind future freeholders.

The managing agents, who have managed the block for more than 20 years, have an obligation under the lease to make the Service Charge payments ‘fair and reasonable’, would they be caught?

In a situation like this, does the Landlord and Tenant (Covenants) Act come into play?

Any caselaw references available on Bailii or the Tribunal’s site would be very welcome.
Many thanks
JWB


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Comments

Blodwyn

16:25 PM, 27th March 2023, About 11 months ago

Claim in the dissolution?
Or did the company go bust with nothing for creditors?

Kizzie

17:29 PM, 27th March 2023, About 11 months ago

What does your lease actually say? Word for word, leases are all different and legally binding on the named parties to it and only those named.
I keep repeating this advice as it is key

Jw Bryan

11:12 AM, 30th March 2023, About 11 months ago

Reply to the comment left by Kizzie at 27/03/2023 - 17:29
Thanks for this, I'm the original lessee, though as I said there's been a change in freeholder.

Crossed_Swords

11:27 AM, 30th March 2023, About 11 months ago

Strictly, if the percentages are in the lease and do not add up to 100% it is defective which is quite common. Expensive to vary it and you would have to. Calculate the correct percentage and use that in future or carry on as you are. Provided the money was properly spent on the property, no-one is "liable" for the extra funds. How has no-one noticed until now?

Jw Bryan

12:54 PM, 30th March 2023, About 11 months ago

Reply to the comment left by Crossed_Swords at 30/03/2023 - 11:27Thanks. The percentages added up to substantially more than 100% and are now in the process of being adjusted and we've been told we will get a credit but only going back six years. I can understand why a lessee or their conveyancer wouldn't have known, but why the managing agents who've been in place for decades didn't pick it up is beyond me.

Crossed_Swords

13:04 PM, 30th March 2023, About 11 months ago

Service charges are for expenses so it won't make much difference what %age is used, the budget will be the same, so not sure why there would be a credit

Maybe they don't keep records more than 6 years

Kizzie

8:16 AM, 31st March 2023, About 11 months ago

Reply to the comment left by Crossed_Swords at 30/03/2023 - 13:04
Reply Jw Bryan
Leases are legal contracts between the Parties named as Landlord and the tenant aka Lessor and Lessee. GRound rent payable to Freeholder. Service charge only payable to the Landlord or Lessor and only due under provisions of the lease (to be Tax exempt) for the actual block maintenance costs listed in the lease and annual accounts to be audited and annual summaries of actual costs certified. It is the liability on the Lessee aka tenant to request this information. Why wasn’t it?

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