Management Agent Overcharging from 2019?

Management Agent Overcharging from 2019?

9:26 AM, 21st December 2021, About 4 weeks ago 15

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Dear All, I own a flat in a block of 6 flats and have been up-to-date with my service charge. Every so often, I get an extra fee called “balancing service charge” after which I had made payment for the annual service charge, normally about £180 extra each year.

This year I have been sent an invoice for a balancing service charge of £880.13 dated back in 2019. I have asked the Managing Agents (MA) to explain where this bill came from, and they produced a receipt that was probably overpriced.

1. Is there a time frame where these monies should have been billed?
2. Can the MA approve works without consulting leaseholders to the tune of an extra £880.13 on top of the service charge?

Aren’t we supposed to get some sort of notice like a S20 if it exceeds a certain amount? (Not sure)

Many thanks

Jay



Comments

by Neil Patterson

9:35 AM, 21st December 2021, About 4 weeks ago

Hi Jay,

From the Leasehold Advisory service >> https://www.lease-advice.org/faq/i-have-received-a-service-charge-demand-for-works-undertaken-2-years-ago-do-i-have-to-pay/

Under Section 20B of the Landlord and Tenant Act 1985, your landlord must demand payment from you within 18 months of the cost being incurred, unless they have written to you within 18 months of the cost being incurred, to inform you that you will be billed at a later date.

by BernieWales

11:38 AM, 21st December 2021, About 4 weeks ago

If you have evidence to back up "a receipt that was probably overpriced" then you can apply to the First-tier Tribunal (Property Chamber) to request a determination on the "reasonableness" of the service charge.

But I suspect the £880.13 excess service charge does not relate solely to that one invoice. More likely the actual expenditure on all services/works in the financial period was higher than the budget and the interim service charges based upon that budget.

Therefore, you should serve notice upon the landlord/agent to request access to the service charge invoices, bank statements and related documentation. You then need to thoroughly examine those documents to see whether the combined bunch are 'reasonable' ... and whether each complies with the service charge provisions of your lease.

There's more on these subjects in the free resources section of my website.

by TheBiggerPicture

12:09 PM, 21st December 2021, About 4 weeks ago

If the costs are legitimate then there is a communication issue, which needs to be improved or the agent replaced.
If they are not legitimate costs, the agent needs to be replaced.

I have found in the past that there are communication issues because the costs are not legitimate. Winning at tribunal has just made the agent try to recoup their losses in other ways.

I would start with calling the free service that advises landlords about this kind of thing.

Then ...
Step 1 would to be to see if anyone else in the block of flats is unhappy, you can then pool resources and work together.
Step 2 is to make sure you get commitment IN WRITING to warn in advance, and not retrospectively of any large costs in future. (A one or 2 line email to flats wouldn't take much to do)
If they won't do this, then they definitely don't see you as a customer.
Step 3 their explanation of the costs as you have described it doesn't hold water to me.
I believe in certain circumstances they are required to get multiple quotes. Can they produce this?

If alarm bells are still ringing, then
Learn to live with it (low hassle, high cost)
OR
Remove them as managing agents.

by Suresh Parikh

14:16 PM, 21st December 2021, About 4 weeks ago

Reply to the comment left by BernieWales at 21/12/2021 - 11:38
Hi Bernie
An excellent reply.
I gather you are one of our legal experts.
You used a careful phrase " to request access."
I did some research on this years go, and it may be out of date.
If you ask for copies, the freeholder/agent is entitled to charge reasonable copying charges (20p per page in those days) plus postage.
You do have the right to go to their office and examine there and make copies in long hand.
How, if at all, has the law changed since then?
Thanks.

by BernieWales

14:35 PM, 21st December 2021, About 4 weeks ago

Reply to the comment left by Suresh Parikh at 21/12/2021 - 14:16
The law hasn't changed - and you have explained it slightly incorrectly. The landlord/agent should provide access to copying facilities - so you don't have to use long hand. They have the right to make a 'reasonable' charge for those copies.

In practice these days, most agents have scanned copies and PDF files of these records. They therefore usually email them to you - rather than have you visiting their offices and being a nuisance.

The law has not caught up with modern technology - in this respect and most others.

by Puzzler

10:26 AM, 22nd December 2021, About 4 weeks ago

Someone I know whose director was being uncooperative (no agent) was compelled to look at the records in a third party office. However to make copies they used the camera on an iPad

by Suresh Parikh

11:33 AM, 22nd December 2021, About 4 weeks ago

Reply to the comment left by Puzzler at 22/12/2021 - 10:26
Thank you for this post.
I did not want to upset Bernie.
I was discussing legal rights, not gestures of goodwill.
If you want "access" (Bernie's word) to documents, then you have to pay for it (whether photocopies, faxed, scanned, pdf or whatever), or examine in person.
Bernie is talking about a gesture of goodwill when he says:
"The landlord/agent should provide access to copying facilities."
No, he does not.
My implied query was can I use a smartphone (or iPad)?
Can the Agent object?
The relationship must have broken down, if it comes to this.
What right do I have in law to use modern technology such as an iPad or smartphone?
As for the original question, the answer would be:
Check your Lease
It should provide that after the end of the accounting or financial period, a reconciliation account (audited or otherwise) will be prepared and adjustments made: credit or debit entry to: the service charge demanded in advance ( and therefore payable), actually paid, and outstanding balance.
A credit balance will be carried forward(!).
In other words, a figure will never be plucked from the air. It will be justified.
It has already been pointed out, that there is a time limit.
I trust this helps, and sorry for the long reply.

by BernieWales

12:10 PM, 22nd December 2021, About 4 weeks ago

Reply to the comment left by Suresh Parikh at 22/12/2021 - 11:33
Refer to s22 of LTA 1985, here > https://www.legislation.gov.uk/ukpga/1985/70/section/22

by Jaye

13:28 PM, 22nd December 2021, About 4 weeks ago

Hello Everyone,
Thank you very much for your advice and input on this matter, as well as for responding to my inquiry.

The excess service charge was for the period January-December 2019 and was invoiced to me on 3/4/2020, which I questioned, but they said the manager was on furlough. They requested payment for this charge last week.

I emailed the managing agents, and they responded with scanned copies of the invoices, which I will examine. I can't prove it, but I feel they conspire with tradesmen occasionally to inflate prices etc. I'll contact other leaseholders to see if we can replace the agents and also request an AGM, which hasn't happened in over 7 years.

Bernie, Thank you for directing me to your website, I'll be checking it out for additional resources

Thank you very much. 
Regards

Jay

by Suresh Parikh

13:32 PM, 22nd December 2021, About 4 weeks ago

Reply to the comment left by BernieWales at 22/12/2021 - 12:10
Thank you so much, Bernie.
The Act does not contradict what I wrote from memory.
A problem may arise regarding a Buildings Insurance Policy (which may comprise one or more Booklets).
What, if anything, is a Tenant entitled to free of charge?
In effect, only the current Renewal Schedule.
Trust you agree.

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