Management company ripped us off!

blckbrd wrote: »

You are entitled to a refund for any overpaid annual charges. Send them a letter before action if they are ignoring your general written requests. Then take them to small claims if they persist.

This could be a waste of time and money: small claims actions over disputes in respect of service charges should be referred onto a Leasehold Valuation Tribunal (the rest of your advice was spot on tho :cool:).

Fire_Fox wrote: »

This could be a waste of time and money: small claims actions over disputes in respect of service charges should be referred onto a Leasehold Valuation Tribunal (the rest of your advice was spot on tho :cool:).

But to my mind this isn't a service charge dispute. It's a dispute about an overpayment of money (i.e. the difference between estimate and actual) that is being witheld.

If OP were to challenge the costs that would go to LVT. Asking for your money back because your account is in credit is not an LVT matter.

You're right you should only pay your proportion. The point I was trying to make - assuming full occupancy - is that that may not be 1/370th depending on any weighting in place.

Simplistically the basis for charges should be 1/370th as opposed to 1/30th but check your lease for a clause which states that the method of calculation may be altered with reason. It may be argued that services have only ben provided to the sold properties and this is reflected in the reduced overall costs.

By the end of September 2009 you should have received an actual invoice for 2008/2009 (not just audit details), in the prescribed form accompanied by details of your rights and responsibilities. This invoice should show your proportion of the actual annual costs broken down across the same heads of charge as on the estimated invoice and any difference between the two invoices. If you LL has not provided this they have not followed legislation.

Any annual charge credit should either have been made available to you as a refund (usually on written request for audit trail purposes) or left on the account to reduce the following year's estimated charges balance. I can't see how it would be reasonable for a LL to effectively overcharge and then put money in a sinking fund.

Your lease should show how and for what purpose the sinking fund monies are collected. I have not dealt with this but the questions it raises for me are:

Should it be collected from the surplus on the annual account?
Should it be a seperate head of charge? (I'd think so.)
If actual expenditure was £48K how was there £21k to move to a sinking fund?

I'm just now wondering about the number of flats and your use of the word 'development'. 370? All in one block? That's more than the equivalent of about 3 whole tower blocks....man that's HUGE if it's all one block!

If all of the properties are not in one block then any apportionment will be on a block basis for block services and an 'estate' basis if services are to several blocks. This may have a direct bearing on the audit figures you have received so not such an apparent rip-off after all.

rossoil wrote: »

Hi ,I am having probems getting my property management company to supplying accounts. I have tried witholding some of the charges and they in turn send me a solicitors letter warning that they will sue for charges. Am I not entitled to see accounts for the service charges?
They have refused several requests during the last 23 months.
They also refuse to tell me when they hold leaseholders meetings,management company meetings or tell me who are the members of the management company. They appear they would like to £820 PA from 40 leaseholders and not provide any proof of what the funds are spent on.
Regards Rossoil

You only have the right to withhold service charges in certain circumstances - AFAIK not supplying accounts (if requested correctly by a leaseholder) is a summary offence which means they can be prosecuted NOT you can stop paying.

Are you making your requests for accounts formally, in writing? If so try writing again, quoting the relevant parts of the LEASE site. Read all of that website, not just this page:
"Leaseholders have a statutory right to seek a summary of the service charge account from the landlord under section 21 of the Landlord and Tenant Act 1985. The request must be in writing and can be sent direct to the landlord or to the managing agent. It can require a summary of the 'relevant costs in relating to the service charges payable' in respect of the last accounting year, or where accounts are not kept by accounting years, the past 12 months preceding the request.
Where a landlord has received such a demand he must provide the summary within one month (or within six months of the end of the 12-month accounting period, whichever is the later)."
http://www.lease-advice.org/publications/documents/document.asp?item=14

I am not aware that management companies need to hold leaseholder meetings: is this specified in your long lease? If not you can start your own tenants and residents association and hold your own meetings. I don't think you have any right to attend management company meetings either, again is this specified in your long lease? Why do you need to know who is employed by the management company - does your block self-manage???

blckbrd wrote: »

Further to FireFox's post #18.

Not sure that the lease will define if/when a management company should meet with lessees. I'd rather expect this to be in the terms of reference.

Neither do I, I suspect Rossoil has misunderstood the function of a commercial management company! If they self-manage then I might expect meetings with leaseholders.

blckbrd wrote: »

You may request access to the accounts which must be provided but do be aware that you are not entitled to have someone sit with you and explain what you are looking at. IME seeing the accounts can be a very frustrating experience - especially where a large management company and copious paperwork is involved - unless there is absolute clarity about what you are looking for and where to find it.

So so true. I am above average intelligence with a decent grasp of mathematics, and have spent three years getting to grips with service charges and how they work. The final set of accounts (handover to new freeholder) made no sense to me AT ALL.

Invoices put in one column then subtracted out (why not delete the entry?), the same invoice added to another column. Then we had the amount each flat we had paid, not in quarterly lump sums but piecemeal against each invoice with rollover amounts, then the extra we paid due to overspend, then a refund due to underspend (how do you have both in the same year??). You need to be a forensic accountant!