Problems with Management Company

Andrea4_2

Hi All

This is my first post and I hope I've posted in the correct area.

My problem is with my Management Company at the flat I own. To cut a long story short the maintenance charges are half yearly but they seem to be adding an end of year charge (approx £300) with no explanation as to what that charge accounts for. So I have written to them asking for details prior to payment being made.

There response was to write to my mortgage provider (copying me in)saying I was refusing to make payment and requesting for them to make payment on my behalf?!?!

I subsequently wrote to my mortgage provider explaining the situation and they have been very supportive - and I have now paid the amount request - still none the wiser as to what that amount accounts for - however my main issue/concern is that I have been charged £150 for the management company writing to my mortgage provider....can they do that? It seem an extortionate amount and very unreasonable.

Your thoughts and feedback is much appreciated.

Thanks in advance

Fire_Fox

Service charges are usually paid in advance and it is normal for the final bill to be settled at the end of the accounting year. Leaseholders have the right to formally request a breakdown of the charges but you do NOT have the right to withhold service charges whilst you wait for this, although you do have the right to challenge charges already paid at an LVT.

"Leaseholders have a statutory right to seek a summary of the service charge account from the landlord under section 21 of the Landlord and Tenant Act 1985. The request must be in writing and can be sent direct to the landlord or to the managing agent ...

... Where a landlord has received such a demand he must provide the summary within one month (or within six months of the end of the 12-month accounting period, whichever is the later)."
http://www.lease-advice.org/publications/documents/document.asp?item=14

Management companies can apply to the lender for payment of arrears but only when service charges have not been formally disputed. It appears that your management company have deemed you to be withholding service charges and not disputing them - which of you is correct probably depends on the precise wording of your letter. I was under the impression that the MC needed to apply to either the court or LVT before claiming against your lender but I could be mistaken - this needs checking.

Whether they have the right to charge you for admin is also a difficult one. Firstly this depends on the terms of your long lease, you need to check the wording and see if there are any limits imposed. Secondly these charges need to be "reasonable": £150 for one letter would probably not be deemed reasonable by an LVT - did you not receive any reminders or warning letters?

I would read through the LEASE website I have linked to above, as many sections as possible. Then appeal to the management company in writing by recorded delivery either under the terms of your long lease (are admin charges of this nature allowed?) and or under the Commonhold and Leasehold Reform Act 2002.

Depending on the contents of your earlier communication, my initial approach would be to clearly state that the administration charges are under dispute. You were NOT withholding your service charges you were seeking additional information as is your right under the Landlord-Tenant Act 1985. Applying to your lender was therefore unwarranted and unlawful. I would further point out that the admin charge levied is not reasonable and/ or not payable under the terms of your long lease so you are requesting they withdraw the demand for payment.

"Any administration charge demanded by the landlord must be reasonable in order for the landlord to recover the charge, and must be accompanied by a summary of the leaseholder's rights and obligations in respect of administration charges. If the summary is not included, the charge is not regarded as being payable ...

... However, an application cannot be made to the LVT where the administration charge has been agreed or admitted by the leaseholder, has been or is to be referred to arbitration pursuant to a post-dispute arbitration agreement, or has already been determined by a court, or determined by a Tribunal pursuant to a post-dispute arbitration agreement."
http://www.lease-advice.org/publications/documents/document.asp?item=14

I find it helpful to quote the legislation, LEASE website or my long lease so the MC are under no illusions that you do not know you rights. You may even wish to state that you have taken advice from the Citizens Advice Bureau or LEASE telephone advice line ... be careful about threatening LVTs, I prefer to state that I would prefer to resolve the matter amicably but am willing to attend one if necessary. Basically let them take you to the LVT and bear all the costs.

Richard_Webster

It is common for there to be an end of year balancing/excess charge. The instalments you pay are reckoned as "on account" and then when they have done their accounts and found they didn't collect enough they work out what the service charge should have been and collect the excess (or give you a credit). When they do that sum they should produce accounts showing how the figure is arrived at.

omen666

£150 for a !!!!!!! email/letter? I wouldnt be entertaining that. There is no way that they can justify the admin fee on that.

Also do they have a right to contact your mortgage company? I am not au fait with the above but I would be !!!!!! at that too, especially not having the courtesy of answering your initial query and just going straight to your provider