Service charge query

emv

We moved onto a private estate last year. Building was up for sale at auction but didn't sell & we bought it privately. In the auction pack was a 'special condition of sale' compelling the buyer to become a Director of the Management Company which would form & take over all common parts of the estate once the last house on site was sold, or sooner by arrangement. This wasn't part of the sale pack when we bought the house.


In our deeds, there is a clause that states "Within fourteen days of receiving a written demand to pay a fair proportion of the costs properly incurred or to be incurred (including a reasonable payment in advance of major expenditure) by the Transferor or his successor in title to the Access and/or any Common Services and/or Common Parts within the Estate in inspecting maintaining repairing renewing and replacing the Access and/or any Common Services and/or Common Parts (including insurance administrative charges or rates payable to any public authority in respect of them)."


We've just received a bill from the Management Company (which shouldn't yet exist, or if it does should have directors made up of the 4 occupants of the estate) for quite a large sum of money backdated to when we moved in last year. The other estate occupants moved in in 2013 and have also had backdated bills. The Management Company's sole director is the developer/owner of the rest of the site who has stated in writing that we can be granted access to some of the common areas of the estate (woodlands etc.) but that he retains the right to withdraw access at any time - which means, to my mind, that this isn't common ground (or he couldn't withdraw access).


He is still building on the site & we think much of the expense is associated with the building works, putting right defects caused by large lorries etc. All of us have done work (mowing lawns, mending potholes etc.) to the estate & access road which we thought was fair in lieu of currently paying a charge. I've asked for copies of the invoices relating to his stated expenses but he hasn't supplied these. None of us onsite are willing to pay the fees without knowing exactly what they are for - we had understood the fee would be around £250/year when imposed & this year's bill is already £500 each & could go up from there. Where do we stand legally? Who defines "a fair proportion of the costs properly incurred or to be incurred"??


Em

Hoploz

You've done the right thing - I was going to suggest asking for invoices. The accounts should have been filed at each year end. This is public info so you could at least see what the expenses have been for the first year from this.

emv

Companies House shows this:
Accounting Reference Date: 30/04
Last Accounts Made Up To: 30/04/2014 (DORMANT)
Next Accounts Due: 31/01/2016
Last Return Made Up To: 11/04/2014
Next Return Due: 09/05/2015


and a company search shows it to be dormant!!

emv

I suspect that many of the expenses that we are being billed for are expenses relating to preparing the site for sale of the other houses on site rather than maintenance associated with us living there. The grass has been mown once in the 8 months we've been there, no work to the access road other than us filling potholes (and builders filling trenches they have dug) and sewage plant expenses total about £230 for the last 12 months.

Hoploz

When was the company started, according to companies house? Maybe he is starting it up now, having opened the company up earlier with a view to others becoming directors, and nobody has yet applied to take over this role from him. Have you discussed the Director thing with the other residents? I think now is the time for people to step forward and get the job sorted out properly from the inside as it were.

Hoploz

BTW personally I wouldn't worry about the clause that tells you to pay within 14 days. He would have to send reminders and warnings of any court action, which he is realistically unlikely to bother doing, so just get on with sorting the company out ASAP.

emv

The other three residents completed forms to be directors but these obviously haven't been submitted to Companies House as they're not listed as Directors (they sent those in July 2013). The company was started up in April 2013. His solicitor mentioned to us that we would also become directors/shareholders (we queries this as we bought 3 properties & asked if we'd need 3 people to be directors as there are only 2 of us!) but we didn't get sent forms to send on to Companies House. We've just received a reminder but I had sent a long letter asking for clarification of whether there were common areas, what the expenses related to etc. & these haven't been answered. The other residents are keen for us all to be directors & decide what expenses are reasonable to pay etc, But we don't seem to have the option to do this.

ethank

To my knowledge he cannot charge for any think relating to the actual build - just the maintenance - did your home come with a warranty? There should be no maintenance issues for something just built!

emv

House was built in 1879! What I mean is that he has had people in to landscape the areas in front of houses he is renovating for sale but I suspect that bill (which isn't for common areas) would be lumped in with our bill for maintenance of common areas. Developer is known for similar practices elsewhere, I think we seem like easy targets.