Am I being ripped off by landlord?

Aiadi

I would be really greatful for some advice... not sure if I'm posting this in the right place but couldn't find anywhere else to post it...

I own the leasehold of a 2 bed flat in Surrey, and have done since Nov 2002. The service charges started off at £300 six monthly, then £325 six monthly until now.

Yesterday I received a bill for half years service charge due 1st April and its gone up to £455!! I thought this might be a mistake because I didn't receive any warning of this massive increase, so today I rang the freeholder and spoke to someone (forgot to record his name :rolleyes: ). He said that the service charges were meant to be £380 from last October but they for some reason only charged the £325 and therefore they are now making up for the shortfall by charging £455. But that doesn't make sense because £380 - 325 is £55, so if they want a year's worth of increase it should be 2 x £55 = £110. Add that to £325 and you get £435, not £455.

He said that they mentioned the increase in the minutes of the last AGM which I should have received. To be honest the thing is always so bulky I look at it very briefly and probably I threw it out. I know that's bad...

I asked whether the charges would decrease back to £380 from next October and he stated that provided there were no changes in the budget it would do.

I am feeling uneasy about paying this as it is such a huge increase, without proper warning- i.e. a proper letter informing me, and the figures don't add up! Not sure what to do next, should I ring again or write a letter requesting more information? I feel like I need some proof or answers...

Feej_2

Hi Aiadi
AFAIK the landlord is at liberty to increase the service charge within reason as long as notice is given.
In the circumstances, as there's some confusion about the new charges I suggest you write to the freeholder, asking for written confirmation of the increase and the backpay being added, and get clarification of what you can expect the final amount to be.

That way you at least know where you are. It may be the best you can do - my stepdaughter's service charges were about £75 pcm up to last year so it might not be excessive.

All the best,

Feej

Aiadi

Thanks Feej for that sound advice- I will definitely do that.

Dee123_2

Until you hear back from the freeholder as to the reason for the increase, is there anything that could be affecting the building insurance premium?

Aiadi

Dee123 wrote:

Until you hear back from the freeholder as to the reason for the increase, is there anything that could be affecting the building insurance premium?

Not as far as I am aware. The only thing I can think of that might explain such an increase would be that they were doing some upgrading to the common areas, such as painting, carpetting, etc, but I am pretty certain that these have been paid for by previous service charges, and I think the work is nearly complete now.

hazeyj

Ask for a copy of the accounts so you should be able to work out where the money is going.

Aiadi

hazeyj wrote:

Ask for a copy of the accounts so you should be able to work out where the money is going.

Thanks, I sent them a letter about a week ago asking for a breakdown of how the service charges will be spent- am yet to receive a reply but will update as soon as I have.

hazeyj

I would prob follow that up with a telephone calls until you get it. Good luck!

lzcook

The first thing you need to do is take a look at your lease.

The section on the service charge should set out how, what and when the landlord can charge service charge.

The type of things to consider are:
1) Has the landlord followed the procedure in the lease?
2) If the costs were incurred in the previous accounting year does the lease allow or not allow the costs to be charged in the following year?
3) Is the item causing the big jump in service charge an item of expenditure that the landlord can claim back under the lease?
4) What is the procedure for service charge disputes (and how much will this cost and who pays for the cost of challenging it)?