Extortionate rise in communal electricity service charge - help!

The.D.G

Yesterday we got an extortionate updated service charge bill from our landlord/housing assoc that I need some help in challenging. Some background:

1. We live in a block of nine flats.
2. Individual flats pay their own leccy.
3. Communal leccy for lighting stairwells etc is shared across all nine flats and charged back to the occupants.

So far so good. Last year's (April 2007 to March 2008) estimated bill for the entire block was £1100. The actual charge we are now being billed is £10,200, which suggests that commercial rates have risen by approx. 900% in that time period. Can anyone advise if that's realistic - have commercial rates risen so far ahead of domestic? We currently pay about £80 a month service charge and we're now being asked for another £900 each to make up the deficit between estimated and actual so obviously I think we're being stung. Next year's bill will both be increased and have this backdated amount added to it so our monthly payment may eventually triple. Ridiculous.

I'm aware that legally we're obliged to pay, however I'm arranging to view the leccy supplier invoices and plan to challenge the amount on the basis the landlord hasn't done due dilligence in minimising costs.

My two main questions are:

Have commercial rates really gone up by 900% since 2007?
Do landlords have the right to pass on commercial rates to their residential tenants so freely?

Thanks, in advance.

flea72

The.D.G wrote: »

Last year's (April 2007 to March 2008) estimated bill for the entire block was £1100. The actual charge we are now being billed is £10,200

have you spoken to LL, as i think its most probably a typo, ie £1200, not £10,200

Flea

Premier_2

Some errors somewhere.

A block of 9 flats expected to use a total of just £1100 electricity in a year? I know flats that use that each.

You need to investigate and obtain the real figures here.

Whether you are required to pay the electricity charge would depend on the terms of your lease. As it appears that the electricity consumed is not part of the rent you pay, but is accounted for in the service charge, it's normal that the service charge is calculated based on the expenditure in managing and servicing the flats, so yes, it would be reasonable that the electricity actually charged to the managing company is passed on to the residents through the service charge.

The.D.G

To clarify, the original £1100 figure based on previous years is, basically, to light the communal stairwell at night and run a door entry system. This figure is the commercial rate passed on by the landlord to residents for energy used communally. Energy for the individual flats is paid for by the occupants separately and they're not massive bills either.

This year the equivalent commercial rate for the energy used communally in the block is £10K. I'm trying to ascertain whether commercial energy prices have risen by nearly 900% in the April 2007 - March 2008 timeframe as I'm damned sure wholesale figures haven't gone up that much.

If anyone knows the answer I'd appreciate it.

whatatwit

My commercial rates have not risen by that much over 12 months. Just over double in fact.
But, it is possible that if a good fixed rate over say 4 or 5 years was previously obtained then a large can increase can happen if the fixed period has ended.
But, the period you refer to is an actual bill April 07 to April 08, rates were not rising as rapidly during that time frame.
Do you have access to the meter and could maybe do a check as to how many units you are using for the communal areas.

Also, one of your neighbours hasn't been using a plug socket in the hall and running an extension into their own property ?

I would be asking to see a copy of the bill detailing how many units have been used and what the rate is.

Premier_2

The.D.G wrote: »

To clarify, the original £1100 figure based on previous years is, basically, to light the communal stairwell at night and run a door entry system. This figure is the commercial rate passed on by the landlord to residents for energy used communally. Energy for the individual flats is paid for by the occupants separately and they're not massive bills either.

This year the equivalent commercial rate for the energy used communally in the block is £10K. I'm trying to ascertain whether commercial energy prices have risen by nearly 900% in the April 2007 - March 2008 timeframe as I'm damned sure wholesale figures haven't gone up that much.

If anyone knows the answer I'd appreciate it.

Thanks for clarifying

I would think £1100 p.a for communal usage only would be expensive - £10k would be extortionate for a bit of lighting.
They should only be charging you the actual cost of the bill to them.

The other thing to question is why you are on a commercial tariff at all. I'm sure when I lived in a flat, everything was on a domestic tariff even the LL's communal meter.

steph2479

Hi all

Sorry to hijack your post but I couldn't figure out how to start my own!
I wondered whether anyone has come across this particular scam before and how you dealt with it. I bought a leasehold flat in 2007 and after several months of receiving electricity bills that were far too big for a 1 bed flat discovered that the management company (and owners of the freehold) hadn't provided a communal electricity meter and were instead routing all their communal electricity to my flat. After 12 months of stress and inconvenience to my partner and I to get it sorted out (their solution was to just move it to one of the other flats) they have merely offered to knock the money they owe me for the electricity off the service charge I owe. I've been told by several people that what they've done is illegal and I think they should be held accountable. I've logged a case with the Residential Leasehold Tribunal Service and contacted Leeds City Council. Does anyone know of anything else can do?

Many thanks

Energyman_2

The.D.G wrote: »

To clarify, the original £1100 figure based on previous years is, basically, to light the communal stairwell at night and run a door entry system. This figure is the commercial rate passed on by the landlord to residents for energy used communally. Energy for the individual flats is paid for by the occupants separately and they're not massive bills either.

.

Is there a lift or electric heating?
Are there outside lighting (street lights) on this meter?
Are there other blocks sharing this meter?

If the bill is just for a few lightbulbs you are being taken for a ride. On an 03 no standing charge tarriff and with sensors and low energy bulbs, this bill could be as little as £10 per quarter.

Energyman_2

Premier wrote: »

Thanks for clarifying

I would think £1100 p.a for communal usage only would be expensive - £10k would be extortionate for a bit of lighting.
They should only be charging you the actual cost of the bill to them.

The other thing to question is why you are on a commercial tariff at all. I'm sure when I lived in a flat, everything was on a domestic tariff even the LL's communal meter.

The standing charges on some commercial meters can be VERY HIGH - an 05 / 06 /07 /08 meter could be over £3-4 per day just for standing charges! (this could also be no standing charge! sothe difference should be obvious_ approx £1000-£1200 year!)

Most landlord meters would be on a commercial tariff - especially if you are using a property management company!

Energyman_2

steph2479 wrote: »

Hi all

Sorry to hijack your post but I couldn't figure out how to start my own!
I wondered whether anyone has come across this particular scam before and how you dealt with it. I bought a leasehold flat in 2007 and after several months of receiving electricity bills that were far too big for a 1 bed flat discovered that the management company (and owners of the freehold) hadn't provided a communal electricity meter and were instead routing all their communal electricity to my flat. After 12 months of stress and inconvenience to my partner and I to get it sorted out (their solution was to just move it to one of the other flats) they have merely offered to knock the money they owe me for the electricity off the service charge I owe. I've been told by several people that what they've done is illegal and I think they should be held accountable. I've logged a case with the Residential Leasehold Tribunal Service and contacted Leeds City Council. Does anyone know of anything else can do?

Many thanks

I have came across something very similar in a block of flats in Sunderland.

I don't think this was malicious though, I think the builders / electricians just screwed it up

Fire_Fox

The.D.G wrote: »

Yesterday we got an extortionate updated service charge bill from our landlord/housing assoc that I need some help in challenging. Some background:

1. We live in a block of nine flats.
2. Individual flats pay their own leccy.
3. Communal leccy for lighting stairwells etc is shared across all nine flats and charged back to the occupants.

So far so good. Last year's (April 2007 to March 2008) estimated bill for the entire block was £1100. The actual charge we are now being billed is £10,200, which suggests that commercial rates have risen by approx. 900% in that time period. Can anyone advise if that's realistic - have commercial rates risen so far ahead of domestic? We currently pay about £80 a month service charge and we're now being asked for another £900 each to make up the deficit between estimated and actual so obviously I think we're being stung. Next year's bill will both be increased and have this backdated amount added to it so our monthly payment may eventually triple. Ridiculous.

I'm aware that legally we're obliged to pay, however I'm arranging to view the leccy supplier invoices and plan to challenge the amount on the basis the landlord hasn't done due dilligence in minimising costs.

My two main questions are:

Have commercial rates really gone up by 900% since 2007?
Do landlords have the right to pass on commercial rates to their residential tenants so freely?

Thanks, in advance.

You need to find out the estimated and actual KWH usage figures not just the cost as prices have changed since last winter. It may be the previous figure was a gross underestimate and you are now paying to catch up (at todays prices, which may need sorting). Do you have a lift or any heating in the communal areas?

I live in a block of 15 flats and can look up the amount we pay for electric when I get home if you like? :cool: My service charge is £110 a month, plus ground rent plus buildings insurance and plus adjustments. I am in dispute on the grounds that this is far more than anyone else locally is charged, for a rubbish service.

Landlords can pass on any and all costs through the service charge, depending upon the terms of your lease (electric will be included tho). However they are not allowed to profit from doing so: hence they employ managing agents who may add on charges for their time usually as a percentage. :rolleyes:

All service charges must, in law, be "reasonable" and "reasonably incurred" (Landlord Tenant Act 1985 - look on Leasehold Advisory Service website). So if they can provide a bill and a meter reading you will have to pay. They do not have a legal obligation to minimise costs, they just have to be reasonable - it's not quite the same thing. :mad: