Advice on dealing with Freehold Management Company

SamIAm_3-2

I apologise in advance if this is the wrong board to post to – it is the most relevant I could find to my problem.

We recently bought a Leasehold flat and we are currently having many issues with our Management Company/Freeholder. Some of them I will go into here.

We have been trying since May to get our account statements for both of our accounts that we hold with the Management Company. Their accounting period changed last year so that it now ends in May, and not March. We were informed of this in March and were issued with statements to include the period March-May. We made sure that we were up to date with both accounts until May.

In March our account balances, after we had made payments to cover the March-May period, stood as follows:

Account 1 (Ground Rent & Service Charges):
£150 in credit

Account2 (Buildings Insurance Charges):
£0

We have not received statements for either account since March.

I first enquired at the end of May about our missing Account statement. they informed me that I was not to worry but they were experiencing delays with their accounting and it would be sent by post soon. Each month I would ring them and I would get the same response.

Firstly, Account 1:
Finally, in December I received some correspondence from them. The gist of the letter was that we were overdue with our ground rent and we owed the following:

May – Administration Charge £50
June – Administration Charge £50
July – Administration Charge £50
August – Administration Charge £50
September –Ground Rent £300
September – Administration Charge £50
October – Administration Charge £50
November – Administration Charge £50
December – Administration Charge £50
Total Outstanding: £800-150 = £650

The Administration Charges are, apparently, for their costs of sending reminder letters out each month as we had not paid the account statement they apparently sent out in May.
When I rang about this they were very aggressive. In fact they told me that the Freeholder is starting legal proceedings to repossess the house. I had explained to them that I had rang them every month to enquire about the late account statement and that we had not received the initial statements or any of their intermediate reminder letters. Their response, paraphrased, was: “That’s easy for you to say, but you don’t have any evidence to support this and the court will not believe you”.

So, reluctantly agreeing with them on one point (that it is my responsibility to pay the ground rent on time and that they can repossess the house if I do not pay it) I paid for the ground rent and the 4, post September, Administration Charges, totalling £500. I sent them a letter to this effect making it quite clear that I was disputing the charges prior to September on the grounds that our account was in credit at the time and they are not justified.

I have not received any correspondence back. I have sent an additional two letters with no response. I rang again recently to enquire about the money I paid and if there was any response to my dispute.

Their reply, again paraphrased: “It is up to us to decide what your money goes to pay and we have decided it is for the Administration Charges. We have not received any correspondence from you. Your ground rent is outstanding and the Freeholder has already issued court proceedings to repossess your house”. Additionally they have applied another charge for January. We are still waiting for the court letter to arrive (if we are to believe them, that is).

Oh, and another thing - they tried to claim the account balance from my Mortgage Company who forwarded that letter to me. I have explained to them my situation which they have accepted. They copied me into their reply stating that they are aware of a dispute between myself and the Management Company and will only get involved after this has been resolved.

Account 2:
I don’t know how much our insurance is for this year as I have not received the statement. I paid, in December, into this account 6 months of insurance based off the amount we paid the year previously. The current outstanding balance (according to the management company) for this account is £1050. They would not give me a breakdown over the phone, and will not send the statement again without charging.

Some background facts from research I have done:
1) The directors of the management company are the same as those of the freeholder
2) The Freeholder went insolvent March 2008 (who owns our Freehold now then???)
3) The management company is listed in the LVT court decisions (http://www.lease-advice.org/) many times over reclaiming outstanding account balances. More often than not, they lose.

I know nothing about where we and they stand legally, but surely what they are doing is criminal?

I’m thinking it’s time for a solicitor, but this is an expense I don’t need right now.

I don’t know if there is any more I can do personally. Any advice is appreciated.

sooz

WOW!

You've already found the LEASE website. I think you need to speak to them, & then think about starting some action against your freeholder/managing agent. They are obviously a bunch of total crooks (& that's being polite )

Stop calling them. From now on, put EVERYTHING in writing, & sent recorded delivery to them & keep a copy yourself. As you have seen, the deny that you've made enquiries about your missing account statements/demands.

With regard to the admin fees, what does it state in your lease? You need to read this carefully from cover to cover, & see what the managing agents are allowed to charge you for.

Ground rent is no longer payable 'whether formally demanded or not' - which is what it used to say in some old leases. The LEASE website will tell you more, but now ground rent MUST be formally demanded, the demand must be written in a very specific format, & must be accompanied by a summary of your rights & obligations as a leaseholder. Until you get all of that, the ground rent is not legally payable.

The same summary & obligations page should be attached to any service charge demands, along with your freeholder's name & address. If not, you don't have to pay it. The LEASE website explains it better than I can (& I've spoken to the lovely advisors many many times when dealing with a crooked freeholder - though perhaps not as bad as yours )

In which case I would be shocked that they have already approached your mortgage company & are threatening you with repossession.

I suggest you call LEASE (do so as soon as they open, as the lines get busy), & then start looking for a solicitor who specialises in Leasehold/freehold issues. Perhaps LEASE have a list of recommended ones? I think at the same time you want to go through with them what your options are for getting rid of the management company. This is not a one off issue, you need to get rid of them - either via right to manage or LVT appointment of a manager. How many other flats are there in your building? Have you spoken to the other owners to see if they are having the same problems?

Re the cost, do you have legal protection with your contents insurance?

Finally, good luck. You will need it

SamIAm_3-2

Thank you, sooz, for all that great advice.

sooz wrote: »

I suggest you call LEASE (do so as soon as they open, as the lines get busy), & then start looking for a solicitor who specialises in Leasehold/freehold issues. Perhaps LEASE have a list of recommended ones?

I don’t know why but I never looked to see whether LEASE provided services – I just thought they provided information. I will ring them first thing tomorrow morning! They also have a list of solicitors – I shall have a look for one near me.

sooz wrote: »

Stop calling them. From now on, put EVERYTHING in writing, & sent recorded delivery to them & keep a copy yourself.

I regret not doing this from the beginning more than anything else. The problem was I had not issues with them at the time and they seemed like they were being reasonable about it all. When it started to go wrong I couldn’t prove a thing – it was my word against theirs. They even deny receiving correspondence I have sent them by post (to be fair I am saying the same thing about their correspondence) – recorded delivery is probably the way to go.

sooz wrote: »

Ground rent is no longer payable 'whether formally demanded or not' - which is what it used to say in some old leases.

D!!n! I wish I had known that before I’d paid it along with the Administration Charges. It’s not just old leases – mine was issued in 2005 and it states that “if the respective rents hereby reserved…[be] unpaid for twenty-one days…then it shall be lawful for the Lessor to reenter upon the Demised Premises…and enjoy thenceforth as if this Lease had not been made”. I thought I could potentially lose the flat if I didn’t pay L!

sooz wrote: »

With regard to the admin fees, what does it state in your lease? You need to read this carefully from cover to cover, & see what the managing agents are allowed to charge you for.

Having just re-read the lease the only relevant statement I found is that I have to pay the Lessor’s reasonable costs in connection with managing the building.
I’m sure there was something else when I read the lease before – too tired to take in legal texts atm…

sooz wrote: »

Re the cost, do you have legal protection with your contents insurance?

That’s a great idea! I know I am covered on my contents insurance for some legal charges. Not sure if it will cover me here – I will have to check!

sooz wrote: »

Finally, good luck. You will need it

Thanks – hopefully I won’t need it but I’ll take it all the same in case I do ;-)

SamIAm_3-2

sooz wrote: »

How many other flats are there in your building? Have you spoken to the other owners to see if they are having the same problems?

Forgot to respond to these questions.

There is only one other flat in the building (it's a converted semi). We are on good terms with them. Their situation is slightly different insofar as they have not had _any_ correspondence from the management company. They have started writing letters to attempt to bring their accounts up to date, but as yet with no response. They have not had threats of respossession either.

I will be talking with them about what we action to take - LEASE think that RTM is the best option and recommend getting a solicitor asap.

sooz

SamIAm wrote: »

Forgot to respond to these questions.

There is only one other flat in the building (it's a converted semi). We are on good terms with them. Their situation is slightly different insofar as they have not had _any_ correspondence from the management company. They have started writing letters to attempt to bring their accounts up to date, but as yet with no response. They have not had threats of respossession either.

I will be talking with them about what we action to take - LEASE think that RTM is the best option and recommend getting a solicitor asap.

Make sure you tell the other flat's owners to send everything recorded too