can they do this? sudden annual service charge?

stellaforstar

please please someone help - i have two issues i really need advice with...

1. We have owned our property for 6 years and when we bought it the lease stated we paid an annual service charge of approx £600. We paid this for a couple of years and then a new management company took over and they suddenly changed it to an 'as and when' lease (without telling us, we only found out by accident when ringing them to ask why we hadnt been invoiced)

so, that was all fine until now they have suddenly sent us an invoice for an annula service charge of approx £450! so all of a sudden they have re-introduced an annual service charge, again, without consultation. when i rang them to question it they said it was because they suddenly realised there was work needed done on the property (fire checks, general maintenance) but they have also suddenly incuded a £300 management fee! so for 3 years they have managed the property and not charged us, now all of a sudden they want to charge us a fee!

can they do this? can they chop and change with no consultation? i sont mind paying it but feel they are making it up as they go along.


2. the outside of the flat really needs painting. we asked then to look inot this in 2006, but all they said was it was the wrong time of year and they would look into it next year. we never heard anything else from them until march 2009 when they sent us threatning letters saying we owed them £1650 for the painting of the outside! i spoke to them and they said they had sent us quotes and consultation opportunities but we never recieved them. (the work has not yet been carried out, they want the money up front)

i wrote to them telling them we could not afford it (hubby and i had both just been made redundant) and we never heard back from them. now we have had another invoice fromthem asking again for the £1650.

our point is that not only can we not afford it, but the work has not yet been carried out (we have not even been given a proposed start date) and yet we are expected to just hand over £1600! we are trying to sell and so would probably never even see the benefit of this work and yet are expected to pay for it!

could anyone plse plse give me some advice how to approach this? We really cannot afford to pay this £1650 but as we are trying to sell feel we will be forced into it, as they are describing it as 'money owed'.

i feel like saying to them i will pay the money but i want to see the work being carried out in the next 30 days - im not prepared to pay this money and then not see the work done. if we pay it and sell the flat before the work is carried out do we have a right to get it back? what are our rights here?

sorry to go on - well done if youve got this far.

ILW

You may have problems selling with an outstanding dispute with the management company.

Trollfever

This is from The Leasehold Advisory Service:

http://www.lease-advice.org/publications/documents/document.asp?item=14



.

stellaforstar

thanks - reading the leashold advice it seems to state that the landlord should be paying for any works and then invoicing us for the money - it states he needs to invoice us within 18 months of the work being carried out.

it seems that this would be more standard practice than asking us to pay money upfront for works that have not carried out yet, nor even have a start date for being carried out.

does anyone have any knowledge of this? i need to go back and read my lease anyway, to check what they are allowed to charge for, i i can certainly ask them how they came to the figures they are quoting, especially as they havent charged us a service charge in the last three years, how do they know what to charge us?

Fire_Fox

You need to read your own long lease, this will set out exactly what can be charged for and whether this is in advance (usually service charges) or arrears (usually major works). Major works of over £250 MUST be consulted on using the prescribed form or you cannot be charged the full amount.

Then read the LEASE website again, as much as possible as there is everything you could ever wish to know and more on that site. Then start communicating with your management company in writing by recorded delivery - I find it helpful to quote my long lease and to quote the Landlord-Tenant Acts 1985 and 1987 which are explained on the LEASE website.

Note that you not being able to afford to pay for major works is not an excuse in the eyes of the law, you are expected to keep money in reserve for service charges and repairs. If you refuse to pay on these grounds the management company can get a court judgement and lodge the additional amount against your mortgage. This will affect your credit rating. Also note that you can put service charges down when you claim for LHA and council tax benefits.

If you intend to dispute either the service charges or the major works on the grounds that they are not "reasonable", "reasonably incurred", not consulted upon properly, or not due under your long lease, then you need to be very clear in all your letters that the charges are under dispute. Disputed service charges cannot be dealt with by a court but by an Leasehold Valuation Tribunal, and cannot be added to your mortgage unless an LVT has deemed them payable.

stellaforstar

thank you very much - i have spoken to the leasehold AS and she agreed with you - the fact that we cannot afford it is not their problem, so we will not argue this point.

i need to go back and read the lease and see what it states - they also said they are not allowed to chop and change the terms of the lease i.e go from charging us an annual service charge, to an 'as and when', then back to an annual service charge without consulting with us or letting us know.

they suggested the best way to handle it is to state that if we pay the £1650 then we want a date of when the works are to be carried out. if they dont do this we can approach the landlord directly to complain. if we pay the money and the works arent carried out by the time we sell and move out, then we can negotiate this cost with the buyers.

Fire_Fox

I wouldn't pay the £1650 unless the terms of your long lease specifically allow for major works to be chargeable in advance: given that your management company don't know what they are doing you may never see that money again! Check that the consultation has been carried out to the letter, if not you will only have to pay £250 - I have done this with our fire escape that collapsed, they didn't consult and they didn't go to an LVT for dispensation so I saved myself and my neighbour £850 each. :money:

stellaforstar

thanks firefox. they did carry out the consultation process in 2007 - however we never got the documents or letters for some reason so werent part of it. they forwarded copies of the quotes etc to us this year claiming they did send them to us (which im sure they did) but we just never got them.

is it reasonable to ask them to re-quote? seeing as the quotes are now 3 yrs old? would they still be valid? as there is a recession on they might be a bit more competetively priced.

i will check my lease and see if its chargeable in advance

blckbrd

stellaforstar wrote: »

thanks - reading the leashold advice it seems to state that the landlord should be paying for any works and then invoicing us for the money - it states he needs to invoice us within 18 months of the work being carried out.

it seems that this would be more standard practice than asking us to pay money upfront for works that have not carried out yet, nor even have a start date for being carried out.

does anyone have any knowledge of this? i need to go back and read my lease anyway, to check what they are allowed to charge for, i i can certainly ask them how they came to the figures they are quoting, especially as they havent charged us a service charge in the last three years, how do they know what to charge us?

It can be difficult to get your head around what can and can't be done in terms of service charges.

Below is section 18 of the Landlord and Tenant Act 1985:

18 Meaning of “service charge” and “relevant costs”
(1)In the following provisions of this Act “service charge” means an amount payable by a tenant of a dwelling as part of or in addition to the rent—
(a)which is payable, directly or indirectly, for services, repairs, maintenance or insurance or the landlord’s costs of management, and
(b)the whole or part of which varies or may vary according to the relevant costs.
(2)The relevant costs are the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with the matters for which the service charge is payable.
(3)For this purpose—
(a)“costs” includes overheads, and
(b)costs are relevant costs in relation to a service charge whether they are incurred, or to be incurred, in the period for which the service charge is payable or in an earlier or later period."

You'll note that an estimate ("costs... to be incurred") can be a valid demand for payment - for both annual charges and major works. BUT as Fire Fox says you should have been formally consulted (under section 20 of the above act - you can read up on this on the lease advice link given before).

If any of your neighbours within your block are leaseholders check if they received any consultation documentation. Also ask for copies of all Section 20 notices to be sent to you including details of service. If proper consultation has been carried out there will be supporting documentation in relation to contractors quotes, details of the works etc - ask for access to this info if copies are refused.

With regard to your annual charges. If a LL fails to bill you when the estimate is 'normally' sent, as long as you are billed within 18 months of costs actually being incurred you are still liable for payment. It's not 'as and when' as such it's just rubbish/slack practice.

greenface

Is this £1650 a worth the money job. You say its a flat ! is this reasonable for painting your flat . Ive not long had my 3 bed semi painted 3 sides(dashed) for £1300 inc all materials (NW England)

Fire_Fox

stellaforstar wrote: »

thanks firefox. they did carry out the consultation process in 2007 - however we never got the documents or letters for some reason so werent part of it. they forwarded copies of the quotes etc to us this year claiming they did send them to us (which im sure they did) but we just never got them.

is it reasonable to ask them to re-quote? seeing as the quotes are now 3 yrs old? would they still be valid? as there is a recession on they might be a bit more competetively priced.

i will check my lease and see if its chargeable in advance

How do you know they consulted in 2007? I wouldn't believe that I didn't receive more than one letter and, frankly, this organisation don't sound too clued up on the legal requirements of their role!!

I doubt anything you pay now will be full and final settlement, they might come back asking for a top-up which can certainly be legally done with service charges so why not major works?