Issue with Management company random charges?

by Readers Question

A week ago

Issue with Management company random charges?

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Issue with Management company random charges?

Have a couple of flats in one block. The typical lease fee was £195 every quarter.

The solicitors acting on their behalf are now threatening to take us to court for breach of contract and are threatening to apply to the courts for a Possession Order if we do not pay the outstanding balance of the in 14 days.

We had not received any bills, but on the statement was a charge for £974 rather then £195 as normal.

We had already queried what this charge was for, but had not received any response from the management company. The solicitor just advised that the cost could go up or down and seemed to dismiss the query.

On reading the Lease with the management company we found the following Clauses:

“Estate Charge Covenants

The Management Company covenants with the tenant and with the Landlord in accordance with Clauses 6.1, 6.3, 6.5 and 6.6 and the Tenant Covenants with the management Company in accordance with Clauses 6.2, 6.4 and 6.6

6.1

The Management Company shall as reasonably practicable after the first day of August in each year prepare estimates of the sums to be spent by itself on the matters specified in the Third Schedule in respect of the year commencing on the first day of October next and shall notify the tenant of such estimated costs:

6.2

The tenant shall upon receipt of a demand therefore pay the Estate Charge to the Management Company in advance on the 1st October in each year throughout the term and a proportionate part shall be paid in advance on the signing hereof.”

I believe this means they should confirm the charge every year by 1st October.

We have had no such confirmation in 2016 and none so far this year.

I think this means they are breaching their own agreement in changing the rates without notification which is quite worrying.

Would welcome any feedback or suggestion of how to find a way forward and were can we get good legal advice on the matter,

Many thanks

Tom

Comments

Neil Patterson

A week ago

Hi Tom,

Have you spoken with any other of the leaseholders to find out their thoughts and what they are doing or have received?

If everyone is unhappy it could be time for a Right to Manage (RTM). Check out the Leaseholders Advisory Service >> https://www.lease-advice.org/

Are you able to go back to your purchasing solicitor and check out these clauses with them?

terry sullivan

A week ago

there are spending limits--if above the limit then lessees have to be notified--try Lease website

Laura Delow

A week ago

When you say a typical lease fee of £195 per quarter, I am presuming you mean "service charge" & not ground rent?Estimated service charge demands for the year ahead are usually expected to be paid annually in advance but more often than not on calling the managing agent, they allow it to be paid quarterly or monthly but until the final payment, any balance owed would show as arrears on your service charge account. However not to have received an estimate of the forthcoming year's service charge with a demand of payment seems unjust cause otherwise how would you even know how much to pay? If your place is let out, could it be they wrote to you at this address & the tenant hasn't passed the notice/demand on to you? If however it's for repairs in addition to the standard service charge, if any repair was in excess of £250 per leasehold, they should have gone through the Section 20 process.

David Price

A week ago

Unless the demand was accompanied by proper estimates and a summary of your rights and obligations (document defined by statute) then the sum is not payable.

Tom England

A week ago

Reply to the comment left by Neil Patterson at 13/11/2017 - 11:52
Have not been able to get back to original solicitors and do not know any of the other landlords.

Have asked the management company for an explanation for the charge 3 months ago but they have not answered yet and their solicitors seems to think it doesn't matter anyway as it is a breach of the lease.
We have not paid as there has been no explanation for the charge. Who would pay an inflated bill if you had a query on it?

Tom England

A week ago

Reply to the comment left by Laura Delow at 13/11/2017 - 13:14
Thanks for that.

Part of the problem is the management company have not provided any explanation for the "service charge". Asked about 3 months ago but not had an answer.

Their solicitor seems to think that doesn't matter as non payment is a breach of the lease. Hence the threat to push for a possession order etc etc.

Why would you pay an inflated bill without an explanation. Surely that is not legal?

Laura Delow

A week ago

Reply to the comment left by Tom England at 13/11/2017 - 16:16
Hi Tom. I suggest you go to The Leasehold Advisory Service https://www.lease-advice.org/advice-guide/service-charges-other-issues/ & scroll down to 3.1 to 3.6 which you will find very useful but if still not sure of your position after reading through this, book a call with them using the following link:-https://clients.lease-advice.org/appointments.aspx

Tom England

A week ago

Reply to the comment left by Laura Delow at 13/11/2017 - 16:31
Thanks for that.

Have had a look at the website and have arranged a call with them.

Thanks for the info

Laura Delow

A week ago

Reply to the comment left by Tom England at 13/11/2017 - 17:29
Do please update us all on the advice they give you. Good luck.

Lesley Clarke

5 days ago

Reply to the comment left by Tom England at 13/11/2017 - 17:29
Hi Tom Do you have a letting agent that manages the property for you? If so you could ask if they manage other properties in the block and if so ask them to put you in touch with other owners. You can then share information with each other. I have a flat in Manchester - had problems with the freeholder over additional charges and someone in the block set up a face book page for property owners. We got in touch with both Leasehold Law and the Leasehold Advisory Service both organisations will offer some free advice. Good luck!

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