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Service Charges: Potentially Reclaim Overpayments. One MoneySaver got £400 back!

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Comments

  • DannyC81 wrote: »
    I live in a block of flats currently managed by County Estate Management. In recent months the residents have become so dissatisfied with the 'service' (or lack of) that we are looking to take action, but have hit many hurdles.

    To start with, 3 years ago each flat was billed just over £800 for internal redecorations to the whole development (around 120 flats). In some parts of the block, the work has still not commenced and in other parts it has been done to such a poor standard that it needs to be done again.
    We've also had problems with broken doors/windows/locks that remain unfixed for months at a time because the residents are just ignored when they report the faults. The intercom hasn't worked for 3 years, despite this being reported several times. The communal areas outside have fallen into disrepair after months of neglect.

    This is despite each flat paying £1000+ a year in service charges.
    In protest, a group of residents arranged a meeting with CEM at their offices to discuss all the problems we have been having. They produced receipts for work they say has been carried out but we all know that the work hasn't been done. They say they went over budget last year but where the money was spent remains a mystery. One resident is currently going through the piles of receipts to see where all our money has gone.
    Through our investigations, we discovered that the LVT (Lease Valuation Tribunal) can help with some disputes, but there are charges involved which may be more than any judgements in your favour. Still, can can talk to them free of charge about your disputes and they are very helpful.
    If you have had enough of your management company and 50% of your development are in agreement that they should go, you can forma Right to Manage (RTM) company which takes over. You can get rid of your current company and either manage the development yourself, or hire a new company to do it on your behalf. All that info is widely available on the net.

    It seems that there is little regulation in the industry and these companies can charge what they like and take your money with no guarantee of you getting any service at all.

    Residnets began to withhold payments and have now been served with threatening debt collection letters. It's a big mess but people must fight back.
    I am also in a block of flats supposedly managed by County Estate Management. Apparently they have been taken over by Peverel Management Group but looking at some of the comments that doesn't sound too hopeful. I think we need to get rid of them and soon. I will have paid £1320 this year for the grass and gardens done twice , the hall and staircase cleaned once and the buildings insurance paid.
  • Fiona_T
    Fiona_T Posts: 493 Forumite
    First Post First Anniversary
    We are a block on 4 flats and are paying around £1000 a year in charges each!

    For this we get the buildings insurance paid (£2k cost!!) and elctricity costs - other than this most things are extra. They have just introduced an 'accountancy fee' which is just under £50 per flat - to give us the accounts at the end of the financial year.

    We pay the charges every 6 months and get a refund in September of any money from the last year.

    We are being ripped off for the cost of the buildings insurance - we found the same cover for around £800 - but the management company said it's up to the lease holder who they choose to go with! The lease holder is a plc and is majority owned by one of the directors' wives of our management company. They don't have our best interest at heart - they are out to get as much commission as possible!

    Oh i can't wait till we have enough money to move into a house so we don't have to worry about service charges ever again!
  • jmbaker
    jmbaker Posts: 5 Forumite
    Fiona, mentalasowt: You don't need to put up with an awful management company. Just organise an EGM and sack the Directors, replacing them with yourselves. At that point, ensure the bank is quite clearly told to freeze the account (as new Directors are in control of the assets). If the old management company tries to spend money, call the Police and report them for fraud (by that point, it's not their money to spend).

    Service charges don't have to be expensive - they are a mess because builders appoint useless management companies, and let residents deal with the problems. You have to ask, what's in it for the builders? To make such an awful business decision, someone has to be receiving some kind of incentive!

    I discovered that Bloor Homes had a solicitor appointed to deal with complaints over service charges (i.e. leaseholders asking Bloor some tough questions), and that same solicitor did the deal with CPM Asset Management. The solicitor can't have been so stupid as to realise the make believe budgets submitted by CPM were outrageous, so why didn't he advise Bloor that CPM were no good?

    If in doubt, hold an EGM, sack the Directors, appoint resident Directors, and get someone else to provide the day to day management. It's just a pity we can't sack useless Local Authority management!
  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Fiona_T wrote: »

    We are being ripped off for the cost of the buildings insurance - we found the same cover for around £800 - but the management company said it's up to the lease holder who they choose to go with! The lease holder is a plc and is majority owned by one of the directors' wives of our management company. They don't have our best interest at heart - they are out to get as much commission as possible!

    It is the freeholder's choice who to insure with HOWEVER service charges must be "reasonable" (Landlord-Tenant Act 1985) and you have clearly demonstrated that this component is not, being well over double the an alternative. I would suggest you read the Leasehold Advisory Service website and ask in writing for the buildings insurance to be retendered - quote the price you have been given and the legal requirement to be reasonable.

    You can 'sack' the managing agents and self-manage, but do not underestimate how much work this will be with just four flats to share the load. I would suggest you make it clear - by quoting the legal position - that you know your rights; often this is enough to get the agents to toe the line! If not you have the option to go to a Leasehold Valuation Tribunal and challenge the level of charges. You can challenge charges already paid so it may be worth stating to your agents that you reserve the right to do so.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
  • Never felt the need to post till now, but the issue of service charges makes me very angry. I live in a large new build block of flats and my service charges for PEVEREL are frankly outrageous and without justificaton while the service has been appalling. We have set up a residents commitee and have had numerous problems with them. They are a disgrace. Too many to mention. I even emailed the Conservative shadow housing minister, the response was that they are looking into regulation in the event of an incoming Tory government but it sounded like more of a soundbite to me.

    Martin this campaign needs to be to get the property management industry regulated-nothing less- and if you push hard enough you will find that this will be your most important campaign in recent years alongside recovering bank charges.

    Please do it!
  • Janyliz
    Janyliz Posts: 6 Forumite
    Martin PLEASE start a campaign to get property management properly regulated.

    It became apparent to us (7 flat block) that the tenants are powerless against the property management companies. They capitalise on the fact that tenants don't communicate with each other, there are absent BTL landlords and are generally unsure of how to progress matters.

    We were originally managed by Watson Property Management who, in hindsight, were fairly reasonable, certainly compared to some of the stories on this forum......although they did charge us £310 for 1 bog standard light bulb on one occasion!
    Watsons offered the tenants the right to purchase the leasehold which we were lead to believe would be the correct route to exercise our right to manage.
    However, Watsons claimed that we did not get our letter of intent to purchase the lease to them on time and they sold the lease to a London based company without further consultation with the tenants.

    A major works was required on the roof and our service charge for the previous 6 months had been increased to cover the £21000 sum required for the works.
    We (tenants) did get several quotes for the major works ourselves at £8K - £10K but they were dismissed in favour of the management company's preferred contractor.

    When Moreland estate management took over our account they denied that the service charge we had paid was to cover the major works and demanded a further £21000 from us to be paid immediately! After a lengthy dispute process, involving letters from solicitors I recouped some of the money but several hundred pounds is missing, never to be seen again. Morelands explain it as the previous management company's fees, even though they did not manage the major works!!!!!!

    Morelands then demanded an additional £500 per tenant to cover any unforeseen work that may be uncovered during the roof renovation, because clearly £21000 wasn't enough!
    The demand arrived whilst I was on a 3 week holiday. When I returned I found the demand letter along with a second letter threatening legal action for none payment of fees advising that they had informed my mortgage company and would take steps to begin repossession! Plus they had wacked on another £70 on the bill to cover legal expenses!!

    Needless to say the additional £500 was never seen again, and suspiciously absorded into the roof works.

    Our block is a grade 2 listed building in a conservation area and it breaks my heart to see our beautiful Georgian property go to rack & ruin at the hands of an unscrupulous landlord 250 miles away, not to mention the effect on the value of our properties.

    Can anyone advise about the tenant's right to manage if the management company own the leasehold? It seems they have us over a barrel......?
  • gofigures
    gofigures Posts: 9 Forumite
    This site has got me thinking. Im in Scotland and our close self factor, we are each supposed to pay a monthly fee however one of the neighbours hasnt been paying and is over 1yr in arrears. They have there house up for sale....can we try and attach the arrears with sale of house.
    Other thing is we dont have regular meeting and Ive never seen the account...which also got me wondering how much is in the pot and shouldnt we get this back at end of year if no work carried out instead of building up to pay for roof etc? I know it covers the close electricity and close cleaning but people have come and gone unsure if they paid. Not that im suspicious of the factors but surely they have a duty to us to produce these record. Any thoughts greatly appreciated!!!
  • Hello All

    Im glad finally someone has decided to act upon what I see as rogue trading. Thank-you Martin!

    I will try to keep the following as brief as possible but I and my fellow residents have alot to get off out chest.
    In April 2007 we brought a Flat via Bloor Homes which was situated in a communal block of 4. We have a fairly reasonable sized communal garden at the front and rear and a small communal hallway which consists of only 6 timered lights. Attached directly to our block are 6 coach houses and in total their are 65 buildings on the estate(including flats)
    We were aware we would have to pay service charges when we brought our property which we din't mind as long as the jobs we were paying for were being carried out to a good standard. However when the site was completly finished in April 2008 our problems with Chilton Estate Management were to follow. In September 2008 we recieved our first invoice from Chilton asking us to pay £350 within 10 days, we were shocked at this request as we had not recieved any prior notification that they were now our Management company or any options to pay in monthly installements. £350 for anybody to pay in 10 days is alot of money. I rang Chilton explaining mine and fellow residents concerns that we couldn't afford to pay just like that and asked 'why we hadn't been given prior warning considering they had been our Management company since May 2008?'
    They ignored my question of why we hadn't been informed and after much argument agreed to let us pay 4 monthly payments of £86 until December. We reluctantly agreed to pay as that is still not much less than we are paying in council tax. As the months went by we noticed that the cleaning and mowing of the grass was only being carried out once a month which we thought was un-acceptable considering money we were paying. I there-fore asked for a break-down of charges for the estate off Chilton so we could find out what we were paying for.
    It turned out that Gardening and Cleaning of the communal area was the most expensive. I decided in order for us to reduce our service charge to put together a contract which allowed all members of our communal area to carry out the tasks of mowing the gardens and hoovering on a rota basis in which we all signed and agreed to do. Chilton after much debating agreed to this and agreed it would reduce our charges.
    This was too good to be true... In April 2009 we recieved our new years charges which were meant to be in our possesion on the 1st of January of £550. An increase of £200 even though we were carrying out our own duties. I and many others we angered by this and immediatley rang Chilton to ask what was going on. They apologized and said we still had to pay the money as they had no recollection of our duties. My response to this was that we had a signed document form the Director of company proving we had taken over these duties and that we would not be paying until a revised invoice had be sent out.
    We did not hear back from Chilton again until a month later and all they had reduced our bill by was £120(total £430). Still working out more than we had paid for the previous 6 months. Myself and others were now getting quite irrate and I decided to ring them and ask for copies of reciepts and buildings insurance and other relevant documents so we could prove we were not being ripped off. Chiltons response was we would have to pay a fee to recieve such information. I thought this was out of order considering what we were being asked to pay. So decided not to go down this avenue and so decided to form a petition and get all Service paying residents on the estate to sign if they thought Chilton were not performing their duties to a acceptable standard. I was suprised to find not one person was happy with them and managed to gain 30+ signitures. Residents in 3 tier communal buildings were being asked to pay £840 an increase of £300 from previous. I realized other people were in a worse situation then myself.
    I then rang Chilton again and asked why everybody who was paying the service charge had recieved such a big increase. Their response was that they did not get all the correct information off Bloor to whom should be paying service charges so therefore everybody else would have to pay the new amounts until records had been sorted. Still nothing to this day has been done and no-one on the estate has paid the new charges as they strongly find this unacceptable. I have found out from my own digging that approx 20 properties have not been paying service charges from the start. That Chilton on the invoices under statatory information gave us the name of the wrong Landlord of our Freehold and that they didn't have record for who it was.Is this Illegal? Does this mean we have no Buildings Insurance even though we had been charged for it? Are Bloor at fault for mis-selling the estate to ourselves as the original plans showed only a handful of council properties but due to Bloor unable to sell the properties more were sold to the Council and some were made Freehold. Does this mean the Council/Freeholders are under no liabilty to pay service charges even though they can use the communal areas?
    Considering I live in Wiltshire which is out in the country I find £430 for our block which is the only block to have 4 flats on estate and £840 for the remainder of the 3 tier blocks more than alot of money to put it politley for 6 months. Does anybody else agree??
    Finally our Solictors contract states that these service charges are to be sent out on the 1st of January and 1st of July. However we have been recieving these in April and September. Are we liable to pay and can they back-date if sending the invoices out late?
    Please Martin Help!
    If you require more information please ask and sorry for the long wided essay.
  • Farbr
    Farbr Posts: 4 Newbie
    First Post First Anniversary Combo Breaker
    'Reputable' and 'Managing Agent' is an oxymoron with emphasis on 'moron'. Your lease will probably give you / your neighbours the right to get rid of Scotts. You can almost certainly save money so this must be a selling point to your fellow leaseholders. If not this then getting a better value (i.e. service) for your money has to be attractive
  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Janyliz wrote: »
    A major works was required on the roof and our service charge for the previous 6 months had been increased to cover the £21000 sum required for the works.
    We (tenants) did get several quotes for the major works ourselves at £8K - £10K but they were dismissed in favour of the management company's preferred contractor.

    When Moreland estate management took over our account they denied that the service charge we had paid was to cover the major works and demanded a further £21000 from us to be paid immediately! After a lengthy dispute process, involving letters from solicitors I recouped some of the money but several hundred pounds is missing, never to be seen again. Morelands explain it as the previous management company's fees, even though they did not manage the major works!!!!!!

    Morelands then demanded an additional £500 per tenant to cover any unforeseen work that may be uncovered during the roof renovation, because clearly £21000 wasn't enough!
    The demand arrived whilst I was on a 3 week holiday. When I returned I found the demand letter along with a second letter threatening legal action for none payment of fees advising that they had informed my mortgage company and would take steps to begin repossession! Plus they had wacked on another £70 on the bill to cover legal expenses!!

    Needless to say the additional £500 was never seen again, and suspiciously absorded into the roof works.

    If the major works cost more than £250 per flat then there is a consultation process to be followed before the works can take place. You also have the right to view any and all documentation (e.g. invoices) related to your service charges and the major works. You have the right to challenge any charges that are not "reasonable" at a Leasehold Valuation Tribunal. I would suggest that £21K is not reasonable if all other quotes are half that, BUT note that they do not have to choose the cheapest contractor. See here
    http://www.lease-advice.org/publications/documents/document.asp?item=14
    You do not need to pay a solicitor for this, nor do you need all leaseholders to be involved (tho it's helpful to have a small group). You may also be able to challenge the extra charges for late payment/ legal expenses, but you must read your long lease to find out what is allowable.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
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