Service charges for year up front

Alx*27

I moved into a flat in October and I had little choice but to agree to pay the year's service charge up front in January as part of the lease (£804).

When I moved in the management company asked me to set up a standing order for £67 a month.

I was happy for this to happen and thought it superceded the previous arrangement and that I could continue paying in this manner.

Now I have received a letter asking for 2010's charges up front. I do not have £804.

I'll contact them on Monday and request to continue paying monthly, or even quarterly.

If they decline, what rights do I have? It seems absurd to expect everybody in the building to pay such a large amount of money, especially after Christmas and we've only just paid £200 ground rent this month.

Fire_Fox

What does your long lease say, that service charges are due annually in advance? If so that is what you are legally obliged to do. You have no 'right' to pay by installments other than what is laid out in your long lease. If you don't have any savings and initially understood the service charges were due four months hence, how were you planning on covering that?

I would strongly recommend you contact the management company in writing by recorded delivery, as this clearly sets out your willingness to pay the service charges and may give you a little stalling time. All too often MC's have no record of verbal agreements and you don't want to be taken to court over a misunderstanding. I wouldn't include anything about the ground rent or Christmas, that is not the MC's problem.

Alx*27

I would have started planning for the event but they then stated in October they wanted payment monthly so it appears I incorrectly assumed this superceded the original agreement.

Obviously nobody would ever buy any flat ever if such things were deal breakers.

All contact has been through email so there is a record of the monthly arrangement. They seem reasonable people and I can email or talk to my contact.

I just thought I'd ask what my rights were so I was forearmed. I also wanted to find out if expecting the full amount was 'usual' or whether this company is alone in the way they do things. The previous owner fell behind with their payments so this up front system appears to be new for 2010.

Fire_Fox

As stated I recommend you communicate in writing by recorded delivery. I say this as a veteran of a three year dispute over service charges - during which time two of my contacts have left the company and one went on sabbatical. Each time the predecessor has been blamed for getting something wrong or there has been major backtracking. :rolleyes: Luckily it turns out that I am a far better record keeper than they are; thus far I have saved myself £4K by being a bit OCD about recorded delivery slips.

olly300

Alx*27 wrote: »

I just thought I'd ask what my rights were so I was forearmed. I also wanted to find out if expecting the full amount was 'usual' or whether this company is alone in the way they do things. The previous owner fell behind with their payments so this up front system appears to be new for 2010.

The reason you have been told to send a recorded delivery letter is in case things go wrong. As you are already disputing when you have to pay your service charges to protect yourself do it this way.

Alx*27

Cheers guys.

Found something encouraging on their website:

How can I pay my service charge?
Most Leases provide for the service charge to be paid on set dates throughout the year. These can be annually, half yearly or quarterly. In the majority of developments however, we encourage payment by monthly standing order and we would be happy to issue you with a standing order form. Payment can also be made by bank transfer, cheque or by credit card over the phone. There is a £4 charge for credit card transactions.


I have received a demand for payment but I am paying by standing order.
Due to the automation of our payment demands system, it will recognise any service charge arrears unless your record is specifically marked that you are paying by standing order. If you are paying by standing order, please ignore the demand you have received with our sincere apologies and contact our office via the Contact Us section with your tenant reference to hand and we will rectify this.