Service charges and shared ownership problems!

R&C

We bought a shared ownership property in 2005 with A2 housing, and sold up in August 2009. They were notoriously awful when it came to customer services and whenever there was a problem we had to go round in circles to get it sorted. Fast forward to August 2010 and the new owners of our old property kindly forwarded on to us a letter they had received addressed to them in the post, but which related to the time we were at the property. It stated that the service charges for the year ending 31st March 2009 (they estimate the service charges, then sort out any deficit/surplus at the end of the year) there was a surplus of £197. Great we thought, we're owed money (!) but we did wonder why this letter wasn't sent to us at our new address. So my better half gets on the phone and is told by a nice chap who seemed to know what he was doing that yes we are indeed owed money and a cheque would be with us in the next week. Easy as that, in fact the easiest it's ever been when it comes to A2, so we were feeling rather sceptical. Sure enough, 2 weeks later we're on the phone again. This time we're being told by someone else that we haven't got a cheque, and we won't be getting a cheque, as A2 keep accounts per property, not per person. So that money has now been taken off the account of the new owners of that property! But it's our money!!

Can they do this? Isn't that like overpaying a gas bill in a previous property but the new owners take the benefit?

The worst of it is, before we could complete we had to leave a £100 bond with our solicitor, should there be a deficit. But when there's a surplus it is all of a sudden has nothing to do with us.

Can anyone give any advice?

Thanks in advance!

R&C

Has anyone got any experience of this?

Flibertigibit

I am in a shared ownership flat (and have similar bad experiences to yourselves, though a different H.A.) but can't answer this specific question. When I needed advice about something I went to
http://www.lease-advice.org/information/faqs/faq.asp?item=206
They were quite helpful.

LL_of_Oxon

This is a really common query regarding service charges.

A service charge estimate is at best only a guess as to what expenditure may be incurred in a certain year.
Service charge estimates are later replaced by a set of service charge accounts which clarify the actual expenditure for the year and the over-spend (deficit) or under-spend (surplus).
It is important to distinguish that the service charge is payable by the holder of the lease, which is essentially the flat owner at the time, and therefore any debtor position is owned by the lease holder (flat owner) and not the individual themselves. Ie the service charge is payable by the flat owner irrespective of when the service charges were incurred and who owned it at that time. That is why your solicitor asked you for a £100 bond, so that any debtor position not apparent at the time of sale might be covered by this bond. Say if the year's accounts to 31 March 2009 had shown a deficit of £197, the new flat owner would have been liable for it, and they would've ended up £97 out of pocket for services you obtained the benefit of!

If there is a deficit it is customary for this deficit to be charged out to all Lessees by way of a collection based on the year-end accounts. If there is a surplus it is customary for the surplus to be transferred to reserves, to accrue to future year’s expenditure. Or in your case, and for most housing associations and property management companies, they will probably credit it against the following year's estimates. But the surplus/deficit belongs to the property owner, not the owner at the time the costs were incurred. I don't think you'll be seeing that £197 ever.