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

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Comments

  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    edited 27 July 2009 at 6:17PM
    ArsenalsJenkins
    Unless your long lease says otherwise, you don't have the right to pay service charges by monthly installments. Did you not save up between May and September 2007? Did your solicitor not find out what the initial service charges would be as part of the conveyancing process?

    You don't have the right to partially take over managing the property either. Again your long lease sets out the responsibilities of the managing agents - if cleaning and gardening is part of their role they have a legal obligation to ensure this is done to a professional standard, and you have a legal obligation to pay as long as the charges have been "reasonably incurred".

    Service charges have increased quite substantially in recent years, as electricity prices have gone through the roof and because new legislation (e.g. fire regs) have come into force. It is also normal for service charges to increase substantially in the first couple of years after a development is completed: doubling is standard as initial service charges are often artificially low (=subsidised) to attract tenants.

    I don't believe your managing agents have the right to charge leaseholders to view documentation related to your service charges under the Landlord-Tenant Act 1985 EXCEPT when they are responding to solicitors in conveyancing matters. Check with the LEASE Advisory Service on this.

    Petitions and phone calls are not the right course of action: letters and a Leasehold Valuation Tribunal is. The only way to ascertain whether your service charges are "reasonable" is to find out what other similar properties are paying, and to find out exactly what services you are paying for.

    I don't understand what you are asking with regards to the dates on which the charges are payable - are the managing agents asking for the money several months too early or too late? :confused:
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
  • jpm15
    jpm15 Posts: 2 Newbie
    First Anniversary Combo Breaker
    edited 27 July 2009 at 6:38PM
    Thanks to Firefox for doing a grand job about pushing the information out.

    KEY POINTS
    As a leaseholder the law is actually very powerful about service charges. Amongst your rights are.

    * You have a right to see information - down to receipts to explain how your charge is calculated

    * You have a right to consultation about people contracted to work on your property (provided their contract is over a certain amount) before the contract is let

    * You have a right to get an independent body (the Leaseholder Valuation Tribunal) to decide what is fair and what is not. If your Managing Agent hasn't done the right consultation/accounting/ reasonableness then the LVT may clobber them

    HOWEVER
    * You have to pay for what your lease says you have to pay for - including shared services (such as heating) even if you don't want them

    * Service charges are quite expensive as the services that they are paying for are quite expensive

    * Service charges go up quicker than Retail Price Index (or the CPI). Inflation in the construction industry (ie builders, repairs) is about 7-10%. Just because supermarkets can keep the RPI/CPI low by demanding cheap food from farmers and cheap clothes from Far East manufacturers, doesn't meant that everything goes up by as little as the RPI/CPI. Expect to pay quite a lot for Service Charges and expect this to go up lots and lots

    * If you live in an (ex) Council Flat which hasn't had the 'decent homes' renovation work then expect to face a charge of £20-30,000 for this work. This is a fair reflection of the cost of renovation work done. Expect to pay more if your flat needs complex concrete repairs or something like that. But the good news is that if the council mess up the consultation process (the 'section 20' notices) then you legally don't have to pay any more than £250. Most councils are clever enough not to mess up the consultation in this way.


    I'm sorry, but being a leaseholder is an expensive thing that most people don't think about when they buy a flat (or house). The best advice is to find out a bit more about leasehold costs and service charges for a property before you move in. You'll think carefully about the area you're moving to, you'll get a survey done on the property - so make sure you find out about the management company and the costs
  • Janyliz
    Janyliz Posts: 6 Forumite
    Thanks for the advice FireFox, much appreciated!

    There was a consultation process for the major works, based on their estimated costs of £7K-£15K which didn't seem too unreasonable when compared with our own quotes........at which point Moreland's took over the account and dismissed our quotes as being from dubious sources and appointed their own contractor at £21K plus the additional £500 per flat, total £24.5K! No further consultation required. Several of us did attempt to dispute by email/letter/phone but had no joy. Maybe recorded delivery would have helped

    I wish I had known about the leasehold valuation tribunal at the time. I'm afraid that it may be too late to do anything about it now, the work was completed in April......?
    I am convinced that these companies exploit the fact that tenants don't know how to go about challenging them
    Well done FireFox, you're doing a sterling job! :T
  • jpm15
    jpm15 Posts: 2 Newbie
    First Anniversary Combo Breaker
    Janyliz wrote: »
    I wish I had known about the leasehold valuation tribunal at the time. I'm afraid that it may be too late to do anything about it now, the work was completed in April......?
    :T

    I'd go for it - check with the Leasehold Advisory Service, but if it's only a couple of months ago that doesn't seem unreasonable, particularly if you tried to query the process as it went on.
  • dmg24
    dmg24 Posts: 33,925 Forumite
    edited 28 July 2009 at 3:31AM
    Fire_Fox wrote: »
    Is this new? I looked into the benefits situation about 18 months ago and was clearly told that I would only be entitled to Jobseekers Allowance (£260 a month) and no allowance could be made for service charges (£160 a month!). I no longer live alone and I didn't need to go onto benefits after all but you never know in the future ...

    I don't know exactly how long it has been about for, but certainly more than eighteen months. Up until this year you could only claim after 39 weeks, but that has now been cut to 13 weeks. It is only available for those claiming means tested benefits, however those claiming Conts based JSA could have an underlying entitlement, so still qualify.

    Apologies for not replying sooner, I am on holiday at the mo - eating Cheesecake Factory strawberry cheesecake in San Francisco! ;)

    Edit: Just checked, ISMI was introduced in 1995.
    Gone ... or have I?
  • Akom
    Akom Posts: 159 Forumite
    jpm15 wrote: »

    I'm sorry, but being a leaseholder is an expensive thing that most people don't think about when they buy a flat (or house). The best advice is to find out a bit more about leasehold costs and service charges for a property before you move in. You'll think carefully about the area you're moving to, you'll get a survey done on the property - so make sure you find out about the management company and the costs

    Before i bought my ex council flat my solicitor noticed that the council were going to be carrying out 'major works'. The council said it would cost around £5000. This i thought was not a show stopper.

    However my estimate has now come through from the council and it's around £22 - 27,000, a massive difference i think you'll agree. This also happened to another buyer who bought even later than me.

    I have since been told that providing a 'section 20' hasn't been issued the council are not abliged to say what these things are going to cost. Had i known the extent of the bill i was to receive i would have stayed well away.
  • dmg24 wrote: »


    I am now in dispute with my management company as they have bought my lease without it having been offered to me first. I bet they love me!

    Under Section 5 of Part 1 of the Landlord and Tenant Act 1987 (as amended by the Housing Act 1996) a freeholder (aka landlord) must offer the freehold (nb not leasehold) of the building for sale to the flat owners before he sells his interest. There is a prescribed notice for doing this and failure to do so is a criminal offence.
    My posts are for general information purposes only and do not constitute legal advice nor should they be relied upon as such. You should obtain the appropriate professional advice before making or refraining from making any decision.
  • beckah
    beckah Posts: 51 Forumite
    Well I do not really know where to start! My husband and I moved in to our new apartment back in October 2006. We were told by the sales people before we moved into the flat that our service charge was going to be £250 a year. I did not question it as it sounded like a fair amount for the size of the area they had to up keep. Then we got the bill in and the price was more like £1000 a year I was mortified. I sent letters to the house builder’s office to complain but because I didn’t have any written evidence we didn’t have a leg to stand on. We were first time buyers so we were a bit naive but we certainly learned a few lessons!
    So I just had to accept it. I thought as long as they do their job properly then we will have to pay it. Anyway a few months had passed no one had been round to clean the building and we hadn’t seen anyone around to do anything at all. We had a list of everything they were supposed to do so we kept a close eye on it to see if they were following there own procedures they were not so my husband phoned to complain about it. Nothing got done about it. At one point my husband was on the phone several times a week but still nothing got done. Eventually he got to speak to the managing director of the company and was told that he was a liar and they were doing every thing they were supposed to be doing and ended up having an argument on the phone with him. Great customer service.
    I decided that speaking to them on the phone was not getting through to them so decided to write to them and seek legal advice at citizen’s advice. Citizens advice didn’t really know what we could do apart from take our complaint to the leasehold tribunal. So we sent them a long form of our complaint with £100 cheque but then sent it back saying they needed £500 to look at the case. We couldn’t afford to pay that kind of money also if you lose you lose the money and have to pay any charges as well. I got a letter back from what I sent the service charge company no joy and they had a cheek to charge us for the letter they sent back.
    I have paid bits and pieces when I got a break down of what they had actually spent for 2007 I paid that and we have only just got what they have spent for 2008. So I will pay that but because we are not paying the full amount of what they have set out they are charging us interest every month. They also charge us other strange amounts for sending letters and threatening to take us to court. Plus a lot of people are dumping rubbish by our bin store and they charge us £120 for each removal even though we suspect the people who are dumping thing s there don’t even live at our apartment blocks! If banks can’t get away with this how can they? I have also phoned to see if I could pay monthly because we owe them a lot now but they said we couldn’t because we haven’t been paying the right amounts. I don’t see why we should pay them when they are not doing their job properly and as I see it totally over charging us.
    We got a few quotes from other service charge providers and we were quoted about £300 a year so we sent letters to all the other flats in the block there is 22 all together, but only got one reply back. We were trying to get everyone to agree to get rid of our current service charge providers. So once again we have hit a brick wall and really don’t know what else we can do!?
  • beckah wrote: »
    . So once again we have hit a brick wall and really don’t know what else we can do!?

    If you're not alone in your building in being dissatisfied with your managing agent then you need to think about grouping together and exercising your Right to Manage the building. This is a relatively quick and simple procedure which gives you the right to choose the managing agent of your building.

    Another option for your to consider is what's called the Appointment of a Manager under the Landlord and Tenant Act 1987. There are only certain situations when it can be used but one of those is where unreasonable service charges have been or are proposed.
    My posts are for general information purposes only and do not constitute legal advice nor should they be relied upon as such. You should obtain the appropriate professional advice before making or refraining from making any decision.
  • vm123
    vm123 Posts: 1 Newbie
    I found the Right to Manage article on the News on the Block website really helpful and there are some other useful tips there too.
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