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B_Binks_737
Posts: 2 Newbie
Hi
I moved into my new build (freehold) property in January 2015 and was fully aware that I would be charged a service charge by the developer for the upkeep of the private estate (which consists of a couple of lamps and bushes in a tiny cul-de-sac). My agreement says that this charge will consist of a fixed £5 and a variable charge representing a fair and proper proportion of the developer's expenses, payable bi-annually on 1st Jan and 1st July each year.
Despite none of the other 9 residents ever having seen the developer perform any sort of maintenance, I paid the first two installments in respect of the 2015 year without question as I didn't really want any grief and the amounts were fairly small.
However, since the payment in July 2015 (for 6 months in advance) I received no further invoices from the builder. I didn't query this as there was definitely no maintenance being done to communal areas as the agreement suggested (the residents are now doing this themselves).
Then a couple of months ago a bulb went in a street light which meant our private parking area was in complete darkness and was becoming dangerous in winter weather. So we contacted the builder and asked he replace the bulb. This took him a couple of months and surprise surprise the day the bulb was replaced we all received invoices for service charges covering the period from July 2015 to July 2017!
Firstly, I will of course be challenging the fact he's asked me for fees covering the six months from July 2015 that I've already been invoiced for. Secondly, the amount seems disproportionately high given all he's done in the last two years is change a bulb so I will be asking for a breakdown of costs.
However, my main query is this; even if we can agree the amount is reasonable can he demand payment for two years worth of fees when the agreement says they will be payable bi-annually? He has definitely raised no other invoices over this two year period. I suppose we could have chased him for an invoice but given no work was being done I really don't think this was the residents' responsibility. And I didn't want to just pay amounts in line with the previous fees as I can't second guess what the variable part of the charge will amount to and for all I know his bank details may have changed!
The man is notoriously disorganised and has for the last two years been working on a bigger, more profitable development so I feel it's very unjustified to ask us for a large payment of unexplained charges in one go because he's neglected to send us invoices over the last 18 months! Do we have a valid case here?
Any advice or second opinions would be much appreciated!
Many thanks
B
I moved into my new build (freehold) property in January 2015 and was fully aware that I would be charged a service charge by the developer for the upkeep of the private estate (which consists of a couple of lamps and bushes in a tiny cul-de-sac). My agreement says that this charge will consist of a fixed £5 and a variable charge representing a fair and proper proportion of the developer's expenses, payable bi-annually on 1st Jan and 1st July each year.
Despite none of the other 9 residents ever having seen the developer perform any sort of maintenance, I paid the first two installments in respect of the 2015 year without question as I didn't really want any grief and the amounts were fairly small.
However, since the payment in July 2015 (for 6 months in advance) I received no further invoices from the builder. I didn't query this as there was definitely no maintenance being done to communal areas as the agreement suggested (the residents are now doing this themselves).
Then a couple of months ago a bulb went in a street light which meant our private parking area was in complete darkness and was becoming dangerous in winter weather. So we contacted the builder and asked he replace the bulb. This took him a couple of months and surprise surprise the day the bulb was replaced we all received invoices for service charges covering the period from July 2015 to July 2017!
Firstly, I will of course be challenging the fact he's asked me for fees covering the six months from July 2015 that I've already been invoiced for. Secondly, the amount seems disproportionately high given all he's done in the last two years is change a bulb so I will be asking for a breakdown of costs.
However, my main query is this; even if we can agree the amount is reasonable can he demand payment for two years worth of fees when the agreement says they will be payable bi-annually? He has definitely raised no other invoices over this two year period. I suppose we could have chased him for an invoice but given no work was being done I really don't think this was the residents' responsibility. And I didn't want to just pay amounts in line with the previous fees as I can't second guess what the variable part of the charge will amount to and for all I know his bank details may have changed!
The man is notoriously disorganised and has for the last two years been working on a bigger, more profitable development so I feel it's very unjustified to ask us for a large payment of unexplained charges in one go because he's neglected to send us invoices over the last 18 months! Do we have a valid case here?
Any advice or second opinions would be much appreciated!
Many thanks
B
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Comments
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As you're contractually obliged to pay the service charge then yes you'll have to pay what's been invoiced even though the invoice hasn't been raised until later.
What sort of sum is it? Residents should be given a breakdown of annual costs so they can see where their money is going, so yes go ahead and ask for this. You may find there are costs which you don't realise, eg is there a gate on your private parking area which has a monthly maintenance insurance, public liability on the communal ground, etc0 -
Welcome to leasehold, If they want to raise the price of their work they can can subcontract to a sister company and charge whatever they want. As a leaseholder you can challenge it, and they have to listen. They dont have to do anything about it though.
Edit. Didnt realize that its freehold. If you havnt signed a contract on that tell him to F**k off.0 -
Thanks a lots for providing a crucial advice.0
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Since you seemingly have a contract that says he has to provide a charge based on a fair and reasonable set of costs, I'd ask for an itemisation of those costs. The fact it's late is neither here nor there, otherwise, taken at extreme, if it was even one day late you could wriggle out of paying.
Take your gas bill for example, if there was a delay in sending it out, that doesn't mean you don't have to pay it! I don't see this is any different. And on the detail, if the gas company sent you an invoice that said just "gas bill £500" you'd be in your rights to demand an itemised listing, this seems the same to me.0 -
You are a freeholder with an estate charge. While leaseholders have protections, you do not. The fees do not have to be reasonable or fair. There is no limit to how much they can charge. You cannot get out of paying them.
The fees have to be based on something, but let's say I own the land, I engage my wife to change the bulb, she invoices me £1,000,000. I then charge that to the freeholders, boom, that's the charge. You cannot challenge it.
Once the developer leaves site, they will sell the shared land and the management of it to a third party, who will likely increase the charge significantly every year and you can't get out of it.
This is why you don't buy freeholds with estate charges from dodgy developers.
http://arma.org.uk/downloader/f15.pdf
Freeholders have in the past attempted to challenge these, and gotten nowhere. Unlike a leaseholder you have no right to buy the freehold. Anyone that buys the house from will be bound to pay these fees as they "have use of" the shared facilities.0 -
Why don't you form your own management company as an estate and sack his maintenance companyDon't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.0
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You are a freeholder with an estate charge. While leaseholders have protections, you do not. The fees do not have to be reasonable or fair. There is no limit to how much they can charge. You cannot get out of paying them.
The fees have to be based on something, but let's say I own the land, I engage my wife to change the bulb, she invoices me £1,000,000. I then charge that to the freeholders, boom, that's the charge. You cannot challenge it.
.
On the other hand logic says there must be some protection somewhere against exorbitant charges being imposed.
If only because I've never yet seen any media publicity about Greedy Management Company trying to charge the earth v. Trodden-on householder/s (whether it be of a court case against Greedies or a "barricade themselves in house - being bodily picked up and thrown out by bailiffs or something" variety).
If that sort of thing had been done to someone - then I would expect to have read about cases of it happening and pressure for a change in law by now.0 -
Welcome to leasehold, If they want to raise the price of their work they can can subcontract to a sister company and charge whatever they want. As a leaseholder you can challenge it, and they have to listen. They dont have to do anything about it though.
Edit. Didnt realize that its freehold. If you havnt signed a contract on that tell him to F**k off.
The fact that it is freehold doesn't mean that there cannot be a contractual charge.
But what it does mean is that owners have less rights when it comes to challenging those charges. A drop off in the legislation there!0 -
moneyistooshorttomention wrote: »On the other hand logic says there must be some protection somewhere against exorbitant charges being imposed.
If only because I've never yet seen any media publicity about Greedy Management Company trying to charge the earth v. Trodden-on householder/s (whether it be of a court case against Greedies or a "barricade themselves in house - being bodily picked up and thrown out by bailiffs or something" variety).
If that sort of thing had been done to someone - then I would expect to have read about cases of it happening and pressure for a change in law by now.
It's anecdotal, but after the fees increased from £200/y to £400/y, then £800/y, then £1200/y, my friends sold their Persimmon new build.
They can charge whatever they like.
"We need a sinking fund as we chose not to get the council to adopt the roads so they will need resurfacing in 30 years and it will cost millions" for example.
The thing is, as freeholders you don't even have any rights to see accounts, so nothing you can do.
http://webcache.googleusercontent.com/search?q=cache:u2nWt08040wJ:www.solegal.co.uk/estate-rent-charges-beware-buying-freehold-homes-private-estates/+&cd=3&hl=en&ct=clnk&gl=uk0 -
You can't have it both ways.B_Binks_737 wrote: »...surprise surprise the day the bulb was replaced we all received invoices for service charges covering the period from July 2015 to July 2017!
Either you want him to manage the facilities - or you don't. If you do, then his time and overheads need to be paid for at a proper commercial rate.0
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