Leaseholder refusing to contribute towards ‘Major works’?
3 years ago | 22 comments
Service charge demands but no explanations?
10:42 AM, 23rd February 2023, 3 years ago
7
Hello, I hope someone can give an opinion. A long story short.
We own 2 leasehold apartments within a 56 block.
Up until now the managing agent serves service charge (SC) demands and we just pay them. However, we are getting fed up with having no explanation to what we are paying for, he won’t supply any documentation to support the SC demands.
Furthermore, since 2014 we have been paying all demands at a set sum, now, we have no idea of surplus amounts or deficit on our account as he won’t supply us with a SC statement each year.
Surely he needs to supply:
A. An itemised list of expected expenditure to justify the SC demand amount?
B. An SC statement of account per apartment at year end so we know what amount of our money was used and so we can have a running tally from say 2014 to the present SC year? Otherwise how do we know where we stand?
He refuses to do the above.
When I query him and give him an example as follows (from the report and accounts filed at Companies house): “There is a 10k yearly charge for lift and maintenance, but our block has no lift”. His reply is that we are not charging you for that.
The issue is, how do we know? He wont give us any paperwork or an SC statement.
Finally, we have just received the SC demands (as he forgot to issue them for both apartments) for 2020, 2021, 2022, 2023.
We are NOT interested in the 18 month rule and not paying, which we could enact, as we would only end up putting the burden on others.
The question is what do we do?
Don’t pay them until he provides XYZ? Pay them and seek information afterwards?
WHAT WOULD YOU DO?
Thank you,
Paul
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Member Since October 2022 - Comments: 403
12:26 PM, 23rd February 2023, About 3 years ago
What does your lease say with regard to payment of service charge and ground rent.
You each purchased a lease to your flat and that is your legally binding contract between you and the named party designated as landlord which has responsibility for collection of service charge and what it is spent on. SC must be held in a separate trust account under Section 42 Landlord &Tenant Act. It is not company money.
Your lease should state what accounts and annual certified summaries you should be given. You need to serve Section 21(1) LTA 85 notice on the Landlord for them to provide SC information and failure is an offence subject to a fine. Leasehold Advisory service provide sample notice.
Member Since September 2022 - Comments: 149
12:55 PM, 23rd February 2023, About 3 years ago
Get together with other like minded occupant form a group and refuse to pay until every expenditure is explained.
You are at fault here for not demanding full disclosure from your first bill .
Member Since April 2021 - Comments: 189
1:00 PM, 23rd February 2023, About 3 years ago
Most freeholders or their agents supply a budget as well. Read your lease for when the service charge can be requested. Check the agent is on the PRS or TPOS register and complain to them. If they are not they are committing an offence
Member Since October 2022 - Comments: 403
2:20 PM, 23rd February 2023, About 3 years ago
Do NOT withhold payment of service charge. This was bad advice.
Member Since January 2020 - Comments: 134
3:56 PM, 23rd February 2023, About 3 years ago
Reply to the comment left by Kizzie at 23/02/2023 – 14:20
Whilst poor performance is not a valid reason to withhold paying the service charge, genuine grounds for suspicion of the misappropriation of funds would be IMO.
Member Since October 2022 - Comments: 403
8:42 AM, 24th February 2023, About 3 years ago
‘Suspicion’ is not sufficient grounds to withhold service charge contributions not paid to landlord.
An application to the FTT under Section 27A LTA requires the Landlord to produce to the Tribunal annual audited accounts and annual certified summaries and other documents. If the Landlord will not comply with tribunal directions provide grounds to pursue matter in Civil court
Member Since October 2022 - Comments: 403
10:52 AM, 25th February 2023, About 3 years ago
Read No. 1 West India quay
Residential Ltd v east tower apts limited – section 20B LTA 85 (18 month rule) – KD law- read
Conclusion- “harsh reminder of the need to comply with all the contractual regulations in the lease”