Issues with sudden large bill from a company I pay by direct debit

cdmacleod

I was wondering if there is anyone out there who can help me. I pay the factors (management) fees for a flat I own and rent out by direct debit. However, last week the management company sent me a bill for several thousand pounds saying that it was money that was owed because the direct debit had not been covering all the management costs. As far as I can work out, this underpayment goes back as far as 2010 so they clearly have not been regularly reviewing whether the direct debit is enough to cover the actual costs.

At the bottom of each invoice I've received over the last few years, it clearly states that since I pay by direct debit, I don't need to do anything.

My question is, does the management company have a duty to regularly review the direct debit amount and increase it to ensure it covers all the costs so you don't get large bills like this (after all I thought this was the point of paying by direct debit)?

If so, is this duty covered by any regulations or rules?, and does this mean that since some of the underpayment goes back to 2010 can I contest the need to pay it all (I realise I'll probably have to pay some/most of it)?

Any and all help is greatly appreciated on this front as I couldn't find an answer to this any where else.

All the best,

Colin

grumbler

I am no expert and know nothing about leashold, but I think the main point of a DD is that the company can take the amount that they want. However, it cannot be some arbitrary amount - this has to be regulated by the contract.

Personally, I would cancel the DD for the time being and paid the normal amount manually. Then I'd check the contract and request explanation from the company. Then I'd make a decision whether to pay what they want or to contest it. If the former, I'd try to negotiate a payment plan.

I think the House Buying, Renting & Selling board is a better place to ask this question.

cdmacleod

Hi Grumbler,

Thanks for the reply. The reason I posted it on this forum rather than the housing one is because it's about how direct debits are regulated rather than specifically about a housing management company (I happen to be in Scotland so this is a factor for a flat rather than a leasehold issue I'm talking about, and there's not a contract as such - factoring issues in Scotland are complicated!).

Anyway, the same general question applies for any direct debit with any company. Do they have an obligation to ensure that they collect the right amount, and if so, can they claim back large amounts of money if they have mis-managed the amount they've charged you.

For example, it could equally well apply to an energy company suddenly demanding thousands of pounds because they've not been charging you enough for years.

Any thoughts?

All the best,

Colin

jennifernil

Energy companies frequently tell people they owe money as their DD has not been covering costs. They are however getting "better" at upping DDs if They find this is the case....and very often even when it isn't!

To be honest (we are in Scotland too),I don't think you have a leg to stand on.

Yes, the Factors could, even should, have told you they needed to increase your DD, but surely you too have a duty to review your payments regularly to ensure they are covering costs?

If you do not pay your share, who is going to pay it?

The legal answer is that, as a last resort, your fellow owners will be expected to pick up the shortfall. You will not be popular!!


Presumably you knew the costs were mounting up? I cannot understand your factors allowing this to happen, but it does not mean you are not liable.

grumbler

jennifernil wrote: »

Energy companies frequently tell people they owe money as their DD has not been covering costs.

In every bill they tell you what you actually owe or are owed. Was it the case with 'factors'? Are these sudden several thousand pounds traceable?

cdmacleod wrote: »

...The reason I posted it on this forum rather than the housing one is because it's about how direct debits are regulated rather than specifically about a housing management company

DD is just a mechanism for making payments provided by banks. They do offer you protections if erroneous amount gets taken without your knowledge, but generally the amounts paid/taken is not their business. The company informed you about the big amount due. Either pay it or cancel the DD and sort this out with the company.

sabretoothtigger

In any case you are entitled to a payment plan for the money owed. They cant just dump you in it is my guess.

If its a 3 year inaccuracy then I'd ask them to divide the amount owed and add it to the bill in equal parts for the future 3 years.

jennifernil

grumbler wrote: »

Are these sudden several thousand pounds traceable?

.

I think this is the important bit.

Our daughter has a flat in Glasgow, she pays the factor monthly by standing order. She gets a statement every 3-6 months that details all the charges, and the payments she has made.

Depending on the work that has been required, she may find she has fallen behind a little. If it is a small amount the factors are happy to carry it forward, but if more than a couple of hundred, she is expected to pay up.

Also, if a large outlay on a job is planned, the owners have to agree first and pay in advance.

I find it strange that the factors have allowed several thousands in unpaid charges to build up, but it doesn't mean they don't need to be paid.

If they have not billed them at the correct time, have you queried how this has happened?

Also, I think you will find there is a contract for their services in place. How old is your property?

olly300

t

cdmacleod wrote: »

At the bottom of each invoice I've received over the last few years, it clearly states that since I pay by direct debit, I don't need to do anything.

While an invoice may say you don't need to do anything, if clearly the amount you paid by DD over the last 12 months didn't cover the amount owed and your contract for the factors states you have to pay what is owed you should have queried the invoice(s).

Housing law is different from general consumer law, which is why grumbler suggested you go to the House buying, renting and selling board.