Is the increase in my service charge legal?

by Readers Question

9:35 AM, 10th January 2014
About 7 years ago

Is the increase in my service charge legal?

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Is the increase in my service charge legal?

The management company of a development of apartments is trying to raise the service charges. The increase in the charge wasn’t on The AGM agenda as such, however it was discussed during the AGM and agreed. Unfortunately, I wasn’t
able to attend the AGM (being one of the landlords).

Interestingly, the only attendees for the AGM were 2 directors. This is a very large development, so I am not certain how legal is it that the increase has been agreed to, only in the presence of 2 people out of the whole site?

Is that legal and binding to every one? Is the increase in my service charge legal

Looking forward to reading your thoughts.

Thanks in advance

W

 

Comments

BigMc

10:43 AM, 10th January 2014
About 7 years ago

Hi,
1) I'm not sure what you mean by "as such". Either setting the level of service charges was on the agenda or it wasn't. If it was then it is legal, if it wasn't and therefore raised under "AOB" then it can be discussed but no motion can be proposed or executed.
2) The minumum number required to form a quorum varies but will be specified in your company's constitution.

BigMc

10:47 AM, 10th January 2014
About 7 years ago

Reply to the comment left by "Mike McDonagh" at "10/01/2014 - 10:43":

Hi,
Sorry missed the point re your attendance. You say you could not attend because you are a landlord. If that is the case it is something I have never encountered. In my experience every leaseholder has the right to attend and vote at their AGM.

Jeremy Smith

10:51 AM, 10th January 2014
About 7 years ago

Are you
a landlord, ie a freeholder, owner of part of the development,
or
a landlord, ie you rent out one or more of the flats, which you have a lease on ?

Don Holmes

11:02 AM, 10th January 2014
About 7 years ago

Arrrr this is so common with lazy lease holders, they cannot be bothered to attend the meetings as to busy or what ever? And in some cases I dont blame them, because they can go on and on AND ON AND ON. But it is like those that dont and wont vote in a general election, but go on bleating about the government, simple answer is make an effort and use your vote!
You are after all investing in your own investment, Now pay up!

Gary Nock

12:35 PM, 10th January 2014
About 7 years ago

Is this (1) a RMC ( Residents Management Company) or (2) a RTM Company where you have kicked the old managing agent out? Or is it (3) just a management company appointed by the freeholder?

If its (1) Get yourself elected as a Director with a number of others, call an extraordinary EGM to discuss the increase and vote it down if you have a quorum.
If its (2) then the RTM calls the shots. Either get rid of the managing agent or knock their increase down.

If its (3) which I suspect it is then you are struggling to do anything about it now. But....

If you do not agree with the increase in the service charge then write to the management company stating your reasons. It cannot be just because they have put them up. It could be increased service charge and poor service, or high cost of insurance ( difficult to argue) high management fee, too high a reserve figure, cost of cleaning, cost of grounds maintenance etc. You have to read the service charge summary to see where the increase has occurred.

If you do not get any joy you can go to a First Tier Tribunal (Formerly the LVT) and ask them to determine the service charge payable. This costs I think about £50 a leaseholder, or a number of you can get together and put in a collective one. But be prepared for a wait of about 6 months dependent upon area.

For more information go to http://www.lease-advice.org or ring one of their advisers.

New member

23:31 PM, 10th January 2014
About 7 years ago

Reply to the comment left by "Mike McDonagh" at "10/01/2014 - 10:43":

It was not "as such" on the agenda, but I suppose the service management company can say it comes under "Accounts-update"?

New member

23:46 PM, 10th January 2014
About 7 years ago

Reply to the comment left by "Mike McDonagh" at "10/01/2014 - 10:47":

Thank you for the comment. perhaps I didnt make myself clear. I am one of the landlords but couldnt attent the AGM due to other personal commitments.

New member

23:48 PM, 10th January 2014
About 7 years ago

Reply to the comment left by "Jeremy Smith" at "10/01/2014 - 10:51":

I own one of the apartments on the development, so a lesee

New member

23:52 PM, 10th January 2014
About 7 years ago

Reply to the comment left by "Don Holmes" at "10/01/2014 - 11:02":

Thanks, thats very helpful

New member

23:59 PM, 10th January 2014
About 7 years ago

Reply to the comment left by "Gary Nock" at "10/01/2014 - 12:35":

Thank you very much, thats very helpful. The management company ((2) reason is to increas ethe reserve figure. Is there any guidance on what is considered reasonable as a reserve figure pls?

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