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

arsenalsjenkins

Fire_Fox wrote: »

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?

Our contract which was confirmed by the solictor clearly states that service charges are to be sent out ready for the 1st Jan and 1st of July each year. This is not the case and they are charging us late. Also if other people who should be paying the service charge and not getting billed for it then how is this a fair charge. I think the courts and tribunal would have something to say about that??
Also what are your thoughts to us being given the wrong landlord under our statory information on the invoices. Surely this means the invoice is worthless if the legal information is wrong??
The invoices they send out are basically something you expect to recieve from some dodgy company from abroad asking you for money. These costs are not broken down and when I ask for a breakdown they never respond.
Also in terms of electricity. I have spoken to the meter reader and he can never get into cupboard as no key avail how can they charge us for a unreliable estimate? I am thank-ful for your comments but I think that Chilton should of introduced themselves 1st as we did't know they we legitamate. I also have found out that a block of 8 flats in a town close to us run by them and they only pay £550 per year and have bigger garden areas and cleaning areas etc.. The building is also over 10 years old. If mine is only 2 and a half years old how is the charging on ours correct??
Regards:money:

leaseholderhelp

When you were sent your service charge demand, it should have been accompanied by a summary of your rights and obligations. This is a legal requirement and the form of the summary is prescribed by statute. The detail is quite specific - it even says a font size of 10pt and more must be used to prevent notices being issued in an unreadable typeface! Here's the important bit: if you are a flat owner and you have received a service charge demand WITHOUT being accompanied by a summary of your rights you may WITHHOLD payment and any lease provision regarding non-payment or late payment will not apply.:T

rxg111

As a leaseholder of a flat in a block of 6 flats in London, everything I am reading here is all too familiar. I have successfully challenged my managing agents in the past, and have been issued with a reduced bill.

But I get the feeling they think no-one will have the time or inclination to go through the service charge demands in detail, and demand copies of invoices and receipts, as I have done. We are paying them £2340 per year to manage a small block of 6 flats, plus Accountancy fees of £780. With insurance, sinking fund contributions, fire safety, repairs etc. my individual service charge adds up to about £2400 for the year.

I don't have a problem with paying for necessary items, but I insist on seeing copies of everything, as is my right under the Landlord and Tenant Act 1985 (s21 and 22).

I have thought about the Right To Manage option, but the other 5 flats are tenanted by people who are hardly ever there, and I don't want to worry about non-payment of e.g. their share of roof repairs.

I am sure that if honest, efficient, good-value-for-money management companies made themselves known to us, they would make an absolute killing as the market is crying out for such companies.

leaseholderhelp

There are many reputable property management companies...

Instead of Right to Manage you could also thinking about making an Application for the Appointment of a Manager if you think that your service charges are unreasonable

Fire_Fox

dmg24 wrote: »

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.

Thanks very much for your reply. I was advised at the same time that I was not entitled to Council Tax Benefit unless I was entitled to Income Support, and I was not entitled to Income Support as I was a single person without children, so JSA was deemed enough to live on and pay all my bills. :rolleyes: The benefits guy admitted the system is not set up for those who live alone in self-contained accommodation. Anyone can see you can't survive on £240 a month if £160 is service charges!

Fire_Fox

Janyliz wrote: »

Thanks for the advice FireFox, much appreciated!

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

They can only exploit you if you allow yourself to be exploited. The LEASE website is absolutely excellent and has stood me in very good stead. I have been threatened with bailiffs, solicitors and with debt collection agencies but this is illegal when the service charges are under dispute.

You can formally challenge service charges already paid, but you only have so long to do so. I would recommend you formally ask for copies of all invoices related to these major works, and state in your letter you are reserving your right to challenge the charges under the Landlord-Tenant Act 1985. Copy and paste some bits from the LEASE website so the managing agents know you know your rights. EVERYTHING must go recorded delivery from now on and you must keep copies of the letter and the receipt.

Fire_Fox

beckah wrote: »

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!?

When you receive service charge bills do you also receive a statement of your rights? This has been the law since 2007:
"Any service charge demand and reminder letter after 1st October 2007 (30th November 2007 in Wales) must be accompanied by a formal summary of rights and obligations whose content and form is prescribed by Parliament."
http://www.lease-advice.org/publications/documents/document.asp?item=14

You need to write a recorded delivery letter to the managing agents detailing your complaints. Once service charges are in dispute the agents cannot simply treat this as a debt. The Leasehold Valuation Tribunal should be used once you have exhausted the in-house complaints procedure and it doesn't seem you have done that. A cheaper method than LVT is the LEASE Mediation Service, some long leases also provide that you can appoint an arbitrator from RICS (Royal Institute of Chartered Surveyors).

You should read your long lease to see what is and is not chargeable - they can only charge interest if your lease allows. They cannot charge for any debt collection action, incuding solictors letters, if your charges are in formal dispute. You have no legal right to pay monthly, you must set aside your service charges whilst you are disputing them.

£300 a year is not a normal service charge - I would expect it would be more like £300 for the agents fees plus costs of running the building. If your long lease states that the managing agents are responsible for removing refuse then they have to do so and they are entitled to charge you for the pleasure. Your alternative is to organise removal of these bulky items yourself.

Fire_Fox

I don't receive this statement of my rights as a leaseholder, one of the many laws our managing agents break .... here it is in full for those in the same boat: :beer:


"Form and content of summary of rights and obligations

3. Where these Regulations apply the summary of rights and obligations which must accompany a demand for the payment of a service charge must be legible in a typewritten or printed form of at least 10 point, and must contain—
(a) the title “Service Charges – Summary of tenants’ rights and obligations”; and
(b) the following statement —
“(1) This summary, which briefly sets out your rights and obligations in relation to variable service charges, must by law accompany a demand for service charges. Unless a summary is sent to you with a demand, you may withhold the service charge. The summary does not give a full interpretation of the law and if you are in any doubt about your rights and obligations you should seek independent advice.
(2) Your lease sets out your obligations to pay service charges to your landlord in addition to your rent. Service charges are amounts payable for services, repairs, maintenance, improvements, insurance or the landlord’s costs of management, to the extent that the costs have been reasonably incurred.
(3) You have the right to ask a leasehold valuation tribunal to determine whether you are liable to pay service charges for services, repairs, maintenance, improvements, insurance or management. You may make a request before or after you have paid the service charge. If the tribunal determines that the service charge is payable, the tribunal may also determine—

• who should pay the service charge and who it should be paid to;
• the amount;
• the date it should be paid by; and
• how it should be paid.

However, you do not have these rights where—

• a matter has been agreed or admitted by you;
• a matter has already been, or is to be, referred to arbitration or has been determined by arbitration and you agreed to go to arbitration after the disagreement about the service charge or costs arose; or
• a matter has been decided by a court.

(4) If your lease allows your landlord to recover costs incurred or that may be incurred in legal proceedings as service charges, you may ask the court or tribunal, before which those proceedings were brought, to rule that your landlord may not do so.
(5) Where you seek a determination from a leasehold valuation tribunal, you will have to pay an application fee and, where the matter proceeds to a hearing, a hearing fee, unless you qualify for a waiver or reduction. The total fees payable will not exceed £500, but making an application may incur additional costs, such as professional fees, which you may also have to pay.
(6) A leasehold valuation tribunal has the power to award costs, not exceeding £500, against a party to any proceedings where—

• it dismisses a matter because it is frivolous, vexatious or an abuse of process; or
• it considers a party has acted frivolously, vexatiously, abusively, disruptively or unreasonably.

The Lands Tribunal has similar powers when hearing an appeal against a decision of a leasehold valuation tribunal.
(7) If your landlord—

• proposes works on a building or any other premises that will cost you or any other tenant more than £250, or
• proposes to enter into an agreement for works or services which will last for more than 12 months and will cost you or any other tenant more than £100 in any 12 month accounting period,
• your contribution will be limited to these amounts unless your landlord has properly consulted on the proposed works or agreement or a leasehold valuation tribunal has agreed that consultation is not required.

(8) You have the right to apply to a leasehold valuation tribunal to ask it to determine whether your lease should be varied on the grounds that it does not make satisfactory provision in respect of the calculation of a service charge payable under the lease.
(9) You have the right to write to your landlord to request a written summary of the costs which make up the service charges. The summary must—

• cover the last 12 month period used for making up the accounts relating to the service charge ending no later than the date of your request, where the accounts are made up for 12 month periods; or
• cover the 12 month period ending with the date of your request, where the accounts are not made up for 12 month periods.

The summary must be given to you within 1 month of your request or 6 months of the end of the period to which the summary relates whichever is the later.
(10) You have the right, within 6 months of receiving a written summary of costs, to require the landlord to provide you with reasonable facilities to inspect the accounts, receipts and other documents supporting the summary and for taking copies or extracts from them.
(11) You have the right to ask an accountant or surveyor to carry out an audit of the financial management of the premises containing your dwelling, to establish the obligations of your landlord and the extent to which the service charges you pay are being used efficiently. It will depend on your circumstances whether you can exercise this right alone or only with the support of others living in the premises. You are strongly advised to seek independent advice before exercising this right.
(12) Your lease may give your landlord a right of re-entry or forfeiture where you have failed to pay charges which are properly due under the lease. However, to exercise this right, the landlord must meet all the legal requirements and obtain a court order. A court order will only be granted if you have admitted you are liable to pay the amount or it is finally determined by a court, tribunal or by arbitration that the amount is due. The court has a wide discretion in granting such an order and it will take into account all the circumstances of the case.”.

http://www.opsi.gov.uk/si/si2007/uksi_20071257_en_1

Fire_Fox

arsenalsjenkins wrote: »

Our contract which was confirmed by the solictor clearly states that service charges are to be sent out ready for the 1st Jan and 1st of July each year. This is not the case and they are charging us late. Also if other people who should be paying the service charge and not getting billed for it then how is this a fair charge. I think the courts and tribunal would have something to say about that??
Also what are your thoughts to us being given the wrong landlord under our statory information on the invoices. Surely this means the invoice is worthless if the legal information is wrong??
The invoices they send out are basically something you expect to recieve from some dodgy company from abroad asking you for money. These costs are not broken down and when I ask for a breakdown they never respond.
Also in terms of electricity. I have spoken to the meter reader and he can never get into cupboard as no key avail how can they charge us for a unreliable estimate? I am thank-ful for your comments but I think that Chilton should of introduced themselves 1st as we did't know they we legitamate. I also have found out that a block of 8 flats in a town close to us run by them and they only pay £550 per year and have bigger garden areas and cleaning areas etc.. The building is also over 10 years old. If mine is only 2 and a half years old how is the charging on ours correct??
Regards:money:

Do you mean contract or do you mean long lease? It is what the long lease states that is key: if you are being charged late that is not illegal, the managing agents have up to 18 months to bill leaseholders. It is irrelevant who is and is not paying as long as you are only being billed for your share of the service charges.

Whether or not the correct landlord was on your invoice is nit-picking and you risk going to an LVT and your case being dismissed for being "vexatious". If the managing agents send you a correct bill out today the service charges would be due. By all means add this breach of the law to your list, but do not rely on it as you will appear to be trying to evade payment.

Have you asked for a breakdown formally, in writing by recorded delivery? Have you quoted your right to ask for a breakdown as laid out in the Landlord-Tenant Act 1985? Do you have a breakdown of service charges for the other property? Have you visited the property and seen what standard it is maintained to? You will need to compare the two in some detail and also have the total costs for several blocks. If you go to an LVT the managing agents will just say you have chosen the cheapest service charge you can find.

I think you need to spend a lot more time doing your homework before you are in a position to complain about the current charges. You also need to avoid getting bogged down in minutiae: you have no idea whether the electricity bill is based on actual or estimated readings as you have not seen the bill. The fact that you are being prevented from exercising your right to access to the accounts is the big issue here.

Fire_Fox

leaseholderhelp wrote: »

There are many reputable property management companies...

Instead of Right to Manage you could also thinking about making an Application for the Appointment of a Manager if you think that your service charges are unreasonable

I think it's great that someone with a legal background is coming onto the boards to advise frustrated leaseholders, but I also think you should declare your hand. If you are willing to give free advice, great, if you are aiming to publicise your services/ book then you should seek permission to post and get a special signature and title so we all know who you are.