Problem with freehold management company

by Readers Question

18:15 PM, 16th August 2013
About 7 years ago

Problem with freehold management company

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Problem with freehold management company

We’ve got a problem with the Freeholder re Ground Rent and Service charge on a rental property we have in Docklands. Any advice much appreciated! Problem with freehold management company

They allegedly sent an invoice a few months ago. We didn’t receive this, but did receive a letter from a debt collection agency, together with Interest Charges and other fees. There was no Bank Account to pay the money to and no pick-up on the phone number provided, upon numerous attempts.

We then received a second letter from the debt collection agency advising of yet more fees and that they have advised our Mortgage Lender of non-payment of Ground Rent / Service charge.

We have now called the Freeholder who refuses to speak with us or confirm any contact details.

We have an email address for a contact at the debt collection agency, but have had no response from that either.

I’m trying to work out whether any of the charges are reasonable and what recourse we might have. We think the original Invoice from the Freeholder must have been sent to the Rental Property, but as the Debt Collection agency have our home address, they would surely have got this from the Freeholder?

It feels like the Freeholder and Debt Collection agency are working quite closely to ensure as many fees are racked up as possible.

All advice much appreciated.

I have also posted this on Facebook.

Many thanks

James Chapman



Comments

Mark Alexander

18:26 PM, 16th August 2013
About 7 years ago

The freehold managers of a few blocks in which I own leasehold flats do this all the time. My main bug bear with most of these companies is that they serve their bills to the property and I don’t get to hear about them until their debt collectors write to me and add on charges. I’ve never paid those charges as I argue with them and show them proof of previous correspondence informing the management company of my address for invoicing purposes. I used to get my solicitor to write to the debt collection companies but after a while that started to get expensive so I just kept a copy of the solicitors letter and send it off again when the same thing happens year after year after year! It used to pee me off because it is bad practice on the part of the management companies at best, a scam at worst as I suspect some of them also own the debt collection agencies. Over the decades I’ve become philosophical about it. It still happens a lot but I just get on with it and put it down to being a landlord.
.

Lauren Wadey MIRPM, AssocRICS, CIHM

18:49 PM, 16th August 2013
About 7 years ago

Hi james.
Freeholders will often use a debt collection agency to collect arrears but are usually happy to bring the matter back 'in house' where there has been a geniune delay or mistake like in this case.

In order for them to take any further action though, they must first be confident of its delivery and receipt. If the demand does not meet strict criteria and is not served with the appropriate rights and obligations then the amount is not legally due (or overdue). In short you will need copy/sight of the invoice before you are required to settle. This is a reasonable request which you should put in writing given the circumstances described so that you can evidence your case and dispute the fees later if necessary. I would also strongly reccomend checking the validity of the demand with a professional too. I would be happy to look over this for you if needed.

Re reasonableness of service charges... why do you think the charges are not? Have you requesed a breakdown and or explanation of these? if not this is a good place to start and if you are still not satisfied/the freeholder is not co-operating you should consider bringing a case with the first tier tribunal under section 19 of landlord and tenant act 1985. Note however that your case will likely be stronger if you have paid all or some of the services charges as you can always be refunded and it is unlikely that nothing is due.

I hope this helps somewhat and if you want to ask anything further please dont hesiate to check out my member profile.

Usman Akram

16:42 PM, 19th August 2013
About 7 years ago

I am currently experiencing the same problem where the freeholder has dragged his heels in providing me with a breakdown of costs. Once received, I have found the £15K bill that has accrued, for a period of 5 years with £3800 already paid, is made up of "projected work to be carried out", "fund for repairs", excessive Insurance re-charges, management fees and accountancy fees. The "projected work" estimates are from companies that don't anser their phone calls and are based in Ireland.

I have tried to sell the property and the sale has fallen through because of this scenario which is not legislated. I have an empty property, aborted conveyancing fees and now legal fees to take the freeholder to the LVT. I am advised, the maximum penalty he could face is circa £600 and all other costs can be re-charged back to me as this is an expense accrued by "managing the property"

I could do with some help on this

10:18 AM, 20th August 2013
About 7 years ago

Reply to the comment left by "Lauren Wadey MIRPM, AssocRICS, CIHM" at "16/08/2013 - 18:49":

Hi Lauren and Mark, thanks very much indeed for the very sound advice. It's great to know one isn't alone!

Mary Latham

11:37 AM, 20th August 2013
About 7 years ago

Reply to the comment left by "James Chapman" at "20/08/2013 - 10:18":

You are far from alone I have more problems with Managing companies than I ever have with tenants but trying to get the other leaseholders to change them is a major problem although it is quite straightforward most leaseholders just can't be bothered and that means that these Management companies just continue to do their job badly. They drive me MAD.

Follow me on Twitter@landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

Lauren Wadey MIRPM, AssocRICS, CIHM

11:55 AM, 20th August 2013
About 7 years ago

I would consider an application under Section 19 of the L & T act 1985 to verify the reasonableness of the charges. Speak to a solicitor specialising in property about your case beforehand but I fear you are correct about the conveyancing fees etc.

Whereabouts are you based - not Ireland I am guessing? Have you googled the companies providing estimates? If you are concerned about their credibility, ask them to provide names and contact info for recent references who you or your agent can contact.

Do you have a residents association or have you considered the RTM?

Mary Latham

12:10 PM, 20th August 2013
About 7 years ago

Reply to the comment left by "Lauren Wadey MIRPM, AssocRICS, CIHM" at "20/08/2013 - 11:55":

The RTM is a really good option but as I have said above it is really difficult to get the numbers needed to make this happen. Leaseholders are good at moaning but very bad at doing anything about the problems

Follow me on Twitter@landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

Rex

16:23 PM, 3rd October 2013
About 7 years ago

I have a buy to let in a block of flats, service charges are due every quarter.

Are the following required by the company charging service charges legally or not ?

(1) Are the charges due at the start of the quarter or at the end of the quarter.
(2) Should there be an invoice to call off these charges.
(3) Should there be a statement with the invoice or yearly to show the breakdown of these charges.
(4) Within the front door hall area common to all, should there be a notice indicating a contact number for emergencies etc.

Ivan Ratnayake

2:19 AM, 7th October 2013
About 7 years ago

I have had the same problem with a Company called Forte Freehold Management who tried to charge for all kinds of things.
Their initial gripe was a delayed Ground Rent for £100 which I was late paying as I had moved. I did pay this about a month later. However they came up with all kinds of charges which amounted to several hundred pounds and with very little further correspondence issued Small Claims Court summons.
Interestingly enough. I stood my ground and they dropped the cas eat 3pm the day before the hearing but said they would keep the figure "on account" as being unresolved.

In my defence I produced a document that someone had already helpfully placed on the Internet where the reasonableness of charges is mentioned. These include £15 for a letter from the Management Company to yourself and no more than about £25 for a letter from the Management Company to a third party ( i.e. a letter from them to the Mortgage Company)

I refer you to the following:

Forte Freehold Managers Ltd by Laurence Bennett and Alan Robertson on 11th May 2-12 HM Courts & Tribunals Service Leasehold Valuation Tribunal Hearing, Ref: Man/00CK/LAC/2011/0009

I shall copy the pertinent points below and what I wrote in my Defence:

22. It would appear to me that Forte Freehold Managers Ltd would like to charge me £225.40 Solicitor’s Fees in the submission of their MoneyClaim Online Claim, as stated in their claim form. As yet, I have not been able to identify any letters that I have received from Forte Freehold Manager Ltd that identify a named Solicitor in this process and so again I dispute these fees and decline to pay these.

23. The Judgment from Mr Bennett and Mr Robertson quoted above also specifically states that Forte Freehold Manager Ltd are NOT a practising Law Firm and are hence NOT entitled to charge as one (emphasis mine). Instead, the Judgment states that collecting arrears is a “routine matter” and “appropriate for administrative staff at lower cost or charge out rates” (Judgment Page 4, Paragraph 25).

24. Further the Panel gives a fee structure that is more in keeping with the routine nature of the work Judgment Page 4, Paragraphs 25, 27.

25. “Following 24 and 25, and noting the routine nature we conclude that the appropriate charge for a letter is £15.00 to include routine research such as outstanding payment, name and address.” Judgment Page 4, Paragraph 27

26. “Should a formal notice have accompanied a letter the total charge of £25.00 is appropriate. This should also apply to a letter enclosing a copy of another letter to a mortgagee” Judgment Page 4, Paragraph 28

This judgement relates to what is a reasonable charge for the letter is on correspondence that has been sent.

James I would be more than happy to send you a full copy of my letter of my defence and the point I made if you like to contact me. 07958 124029
I hope the above has been helpful.

Richard Jones

6:23 AM, 22nd January 2015
About 6 years ago

Hello Ivan
Forte freehold management have just purchased the freehold of a development in Cardiff in which I own two apartments.
They have changed the way ground rent is to be charged collected and within 16 days of the first bill are claiming £67 admin fee on a £50 ground rent charge.
I would like a copy of your letter if I may as I plan to take thee sharks on personally.
Best
Richard

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