Managing agent threaten to court

Stesshead

Dear all,

We received final demand from managing agent today and really appreciate some advice.

The managing agent provided the account summary (for a block of 30 flats) of financial year 2008, which we worked out we should have credit on our account because we overpaid them when we bought the flat. According to our lease the credit should be reimbursed to us after the service charge account audit. We have been chasing the managing agent to advise the exact service charge amount applicable to our household and acknowledge the credit, but they just totally ingored our request.

We have made it very clear to them that we will keep the service charge invoice for financial year 2009 on hold until the 2008 account is clarified. But today we received a final demand from managing agent requiring the bill be paid in 7 days otherwise they will send us to court!:mad:

My question is do they have a case against us? We keep disputing their 2008 invoice and requiring credit back on account without a reply, and they just want us to pay the 2009 bill?

We are fuming but worried as well. Hope you all can give us some advice?

tks

BitterAndTwisted

Ask them for an up-to-date statement showing all transactions from when you bought the property. Then find out why the credit isn't showing on your statement if you think it should. I'm hoping that all correspondence about this overpayment and your expectation of receiving a refund has been in writing. Normally, if there is a credit on a service charge account it may not show on the latest demand itself but should be on the statement

DVardysShadow

Just make doubly doubly sure that either they do owe you or they have not addressed your previous requests for information. Then let them take you to court. It will be a fairly nervewracking time, but basically as long as you have been requesting information, if they don't give it to you, they cannot base their court case on information they have not given you. You can also have a nother shot at them by filing a counterclaim and demand the information you require under discovery. Done carefully and being meticulous about the prehearing stages, you should be able to reach a point of saying OK, we owe £X and settle without it reaching a hearing. Basically, they undermine their case by withholding information from you.

Fire_Fox

The management company can take you to court for any service charge arrears, unless the charges have been disputed in writing. If charges are disputed then the case must be referred to a Leasehold Valuation Tribunal. Technically you are not disputing the 2009 invoices, so I think you are on very sticky ground withholding payment.

When you say you have been chasing the management company over the 2008 account have you been sending recorded delivery letters? If this goes to court or an LVT you will need a paper trail of the dispute. Everything leasehold here:
http://www.lease-advice.org/publications/

I would not want this to go to court, if you lose the money will be lodged against your mortgage. If you feel you have strong evidence of your efforts to resolve the dispute over the 2008 arrears, then when you submit your defence ask the court to refer the case to an LVT. The management company will try to claim legal costs against you or against the service charge payers as a whole which will cause yet more ructions.

Stesshead

DVardysShadow wrote: »

Just make doubly doubly sure that either they do owe you or they have not addressed your previous requests for information. Then let them take you to court. It will be a fairly nervewracking time, but basically as long as you have been requesting information, if they don't give it to you, they cannot base their court case on information they have not given you. You can also have a nother shot at them by filing a counterclaim and demand the information you require under discovery. Done carefully and being meticulous about the prehearing stages, you should be able to reach a point of saying OK, we owe £X and settle without it reaching a hearing. Basically, they undermine their case by withholding information from you.

Many thanks for your reply. I believe they owe us money from financial year 2008 since we worked out our proportionate amount from the actual spending is a lot less than what we have paid. We have been requiring them to disclose the exact proportionate amount for us to pay to no avail. Which makes it even clearer they do not want to give us the credit back.

I read about forfeiture clause, can they use this against us and take it up with lender? thanks a lot

Stesshead

Fire_Fox wrote: »

The management company can take you to court for any service charge arrears, unless the charges have been disputed in writing. If charges are disputed then the case must be referred to a Leasehold Valuation Tribunal. Technically you are not disputing the 2009 invoices, so I think you are on very sticky ground withholding payment.

When you say you have been chasing the management company over the 2008 account have you been sending recorded delivery letters? If this goes to court or an LVT you will need a paper trail of the dispute. Everything leasehold here:
I would not want this to go to court, if you lose the money will be lodged against your mortgage. If you feel you have strong evidence of your efforts to resolve the dispute over the 2008 arrears, then when you submit your defence ask the court to refer the case to an LVT. The management company will try to claim legal costs against you or against the service charge payers as a whole which will cause yet more ructions.

I have not sent letters by recorded delivery yet. But I emailed the managing agent all the time chasing for reply only get occassional reply like we will get back to you asap. I am wondering if email correspondence can work as audit trail as well in court?

Thanks for the tip about transferring case from court to LVT, can I use that section 21 ( I could be wrong) to request LVT put the cost back to managing agent not me paying it? thanks a lot

Fire_Fox

Forfeiture is a last resort with a persistent non-payer, most simple cases of arrears go to court and get added to the mortgage. There are only very limited circumstances where a leaseholder is allowed to withhold payment, so you are not acting within the law at present. Please separate the two issues. Issue one is the overpayment on your 2008 account, which is in dispute (or will be once you have sent a recorded delivery letter quoting the LEASE website and your long lease). Issue two is the 2009 account which you are not disputing AFAIK.

Edited due to cross post: You must pay up immediately. You have NO legal grounds for withholding payment when you have not formally disputed these service charges (the law clearly states in writing). I don't think you even have grounds to ask for the case to be referred to an LVT as you haven't disputed anything formally. I really would not like to test this in court.

Please listen to me, I have spent three years in dispute with my ex-management company and have managed to get away with not paying and not being taken to court by the skin of my teeth. I have been INCREDIBLY organised, recorded delivery letters, reading LVT decisions, learning the legislation better than they know it. I am also paying the new management company as I have no dispute over the current invoices and current service.

DVardysShadow

Stesshead wrote: »

Many thanks for your reply. I believe they owe us money from financial year 2008 since we worked out our proportionate amount from the actual spending is a lot less than what we have paid. We have been requiring them to disclose the exact proportionate amount for us to pay to no avail. Which makes it even clearer they do not want to give us the credit back.

I read about forfeiture clause, can they use this against us and take it up with lender? thanks a lot

There are technicalities relating to leasehold here, Fire Fox is more up this aspect. They could take it up with the lender, but make sure you have a good letter on the record to the Managing Agent which acknowledges a debt for 2009 but details the problem with previous years. you could also make an estimate and send the difference. I think the Managing Agent will be reluctant to to take it too far while he is at fault and I don't think that forfeiture would stand up until the debt was proven - if they took it up with the lender, I think the lender should see that there is no debt yet proven and not want to get too involved. Also, their position would not play well in court. Which is why you want a good letter on the record.

BitterAndTwisted

In that case what you are talking about is a balancing service-charge refund for y/e 2008. How did you calculate your proportionate amount, from the s/c documentation itself or by dividing by the number of flats? These are often not the same. Your proportion should be on the balancing s/c documentation

Stesshead

BitterAndTwisted wrote: »

Ask them for an up-to-date statement showing all transactions from when you bought the property. Then find out why the credit isn't showing on your statement if you think it should. I'm hoping that all correspondence about this overpayment and your expectation of receiving a refund has been in writing. Normally, if there is a credit on a service charge account it may not show on the latest demand itself but should be on the statement

I can imagine the managing agent think money is in their pocket, they won't give it back.

Stesshead

BitterAndTwisted wrote: »

In that case what you are talking about is a balancing service-charge refund for y/e 2008. How did you calculate your proportionate amount, from the s/c documentation itself or by dividing by the number of flats? These are often not the same. Your proportion should be on the balancing s/c documentation

I only get the total amount of account summary from managing agent for 2008 for the whole block, which did not show the proportionate amount for our household. I then divide that total amount with total number of flats 30 (which is how its stipulated in lease) and I worked out we overpaid them by roughly £500.

I have done everything I can to verify with managing agent if my understanding of this credit amount is correct and if not, they can correct me and I can pay the 2009 bill straightaway. But they just ignored my request. I know I will be sacked if I don't reply to our clients at work for that long.