Management company incompetence has cost me!

by Readers Question

11:27 AM, 6th May 2016
About 3 years ago

Management company incompetence has cost me!

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Management company incompetence has cost me!

I purchased a leasehold flat managed by a Housing Association in 2014, the property is on a development with housing association and privately owned property. The private properties receive 6 monthly service charges from a management company. The HA manages the property and levies a monthly charge on their managed properties.george bush

After 6 months, I received the next invoice from the management company and this was paid. 2 months later, the amount was refunded with an explanation saying this was billed incorrectly. The service charge should come from the HA. I discovered that the account was 9 months in arrears which was settled. I have effectively paid the service charge twice for the period.

When I purchased the property I paid the apportionment of the service charge totaling £675.05 as per the invoices supplied by the vendor. I wasn’t suspicious as I own other properties in the development which I pay the SC on a 6 monthly basis. This property has a monthly charge as it’s a HA property.

I have tried speaking to the Management company to establish that the original invoice was paid (and was the basis of the apportionment) and was then refunded after the sale had gone through, however they refuse to give me details as under “data Privacy” I was not billed and they cannot release the information to me.

My solicitor has tried to contact the vendor solicitor and request the monies, however no response has been received. Is there a way to recover this based on the fact I don’t have invoices or proof that the vendor received a refund. All I have is the apportionment cost from my solicitor and copies of the incorrectly billed SC.

I know the address of the vendor and know where he works, I was hoping for some advice from the readers as the most effective way to recover this money.

Many thanks

Chris



Comments

Neil Patterson

11:32 AM, 6th May 2016
About 3 years ago

Hi Chris,

Surely it is not your problem if someone else gets a refund or not as you have proof you paid it twice?

If this rumbles on and your solicitor can't help you might want to have a chat with our friends at Cotswold Barristers >> http://www.property118.com/private-prosecutions/

Carol Duckfield

12:30 PM, 6th May 2016
About 3 years ago

The HA should have given permission for the sale subject to service charge for the current year being paid and the vendors solicitor should have paid the amount due. This is normal process and they should be pursuing them for the outstanding amount.
Data protection issue is an excuse as they should be able to confirm what you portion was and you can prove that it was passed to the vendor solicitor.
I deal with two HAs and both are proving to be hopeless in many way so you might want to familiarise youself with the economic and consumer standards they are required to meet on HCA website
https://cfg.homesandcommunities.co.uk/ourwork/standards

David Atkins

19:26 PM, 6th May 2016
About 3 years ago

The solicitors should apportion the service usually on a daily rate until exchange of contracts. Contracts shouldn't be exchanged until any debts by the vendor are settled. The leasehold sellers pack should contain account arrears info.

On another note (I'm assuming that the management company is not the Housing Authority) - There is an 18 month rule - costs incurred by a management company must be demanded by the MCo within 18 months otherwise the leaseholder isn't liable to pay them - this may apply to the arrears. If you don't get any joy go to ARMA then 1st Tier (non HA management co's)

Puzzler

15:02 PM, 8th May 2016
About 3 years ago

Your post is a bit hard to follow but it looks to me like the refund you received after the two months was the error, I can't see how you have paid twice. You are liable from completion, the first two months were paid over by your solicitor to the vendor, you were billed for the next 6 but this was refunded (possibly in error) so you may well have ended up nine months in arrears. A nuisance but does not mean you were billed twice for the same period.

susan groves

16:23 PM, 8th May 2016
About 3 years ago

I am interested in David Atkins comment. I have never been on a forum before and hope that I am approaching the subject in the correct way. Four years ago we formed an RTM because the Freeholder was seriously overcharging. Last week out of the blue I received a threatening letter from the mortgage company for the property, saying I owed £1600, which would be added to my mortgage. The mortgage company know there was a problem with the first stage letter that they admit was not sent, yet the day before we received the threatening letter the mortgage company paid the Freeholder this mysterious sum that the Freeholder had not advised us of. It turned out that they had written to an address we left 8 years ago, even though we receive two invoices a year from them for ground rent at our current address. I can only communicate with the Freeholder through their solicitor who says the £1600 is an unpaid service charge. We have no paperwork, this is the first time I have heard from the Freeholder on the subject since we set the RTM up, when all outstanding charges were cleared, before they hand over the funds they held.

My question is does the Freeholder have any right to chase after 4 years? Does the mortgage company have any right to pay a debt, they we do not believe we owe, without consulting us?

All advice gratefully received.

David Atkins

21:47 PM, 8th May 2016
About 3 years ago

Hi Susan
First of all I would write to the mortgage company informing them that you are not liable for the amounts demanded by the freeholder. Some mortgage providers now require a decision from the 1st Tier Tribunal (Old LVT) before paying service charge arrears and adding them onto the mortgage account. It would be in your interests to request a copy of their mortgage policy. I cannot understand why you can only communicate with the freeholders solicitor as the freeholder has to have contact details on any service charge demands. With the knowledge of what you have posted Susan I would say that you are not liable for the arrears bearing in mind that the Freeholder will have to prove that they have chased outstanding debts within 18 months of them occurring which from what you say they would find hard to verify in front of a 1st Tier (LVT) panel. The legal formalities that Freeholders must follow by law appear to have not been followed in your case.

Landlord & Tenants Act 1985 S20B - The landlord (freeholder) must issue the demand within 18 months of incurring the cost.

Finally as you are a RTM company it appears strange that the freeholder is chasing arrears on the service charge as the freeholder is now only liable to collect ground rent. The RTM company has been responsible for chasing service charge arrears from acquisition date.

I am AIRPM qualified and a property manager for RTM and RMC companies.

Apply to tribunal here:
https://www.gov.uk/housing-tribunals/apply-to-the-tribunal

susan groves

10:39 AM, 9th May 2016
About 3 years ago

Hi David

Thank you so much for your response, much appreciated.

Susan Groves


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