Unfair late payment on service charge

solidpro

Hi All

We own a flat and we pay a service charge every 6 months. We got an invoice about 6 weeks ago and I forgot to pay it before we left for holiday for 2 weeks. We got back this Saturday and they have charged £144 for being 6 months late.

I immediately paid the service charge (£1100) and decided I would see what I could do about the fee.

Now I own the a company, which owns the flat, so they can only pursue my company for the £144 fee. We've read the terms of their invoices and it says that they are allowed to charge a fee which is 'reasonable'.

No solicitors have been involved and the only thing they have done is sent a new statement with £144 lumped on it saying 'late payment'.

Now if it was £35, I would see that as £35 down the drain but wouldn't argue it was unreasonable. £144 I think is unreasonable...

Does anyone have any suggestions? They threatened us with taking our leasehold away!

cheers

G_M

You can appeal via the First-tier Tribunal on the grounds it is unreasonable.

http://www.lease-advice.org/advice-guide/summaries-rights-obligations-administration-charges-england/

http://www.lease-advice.org/podcast/service-charges/

solidpro

You can appeal via the First-tier Tribunal on the grounds it is unreasonable.

Thanks - I just checked and it's £100 simply to apply for a First-Tier tribunal and another £200 if it comes to a hearing.

Seems a lot of money to argue an 'unreasonable' £144 fee...

Has anyone actually done this to know what the process is? I don't want to suggest this process and look a wally to put down £300 on something I might not win...

flashg67

Is there anything in the deeds / agreement for late fees? Mine has something like 'base rate + 3% until paid' or similar.

the 'fee' does seem high - have you asked them to justify it it terms of their actual costs/losses incurred would be my first query. As you say, spending £300 to possibly save £144 is pointless. I'd rather negotiate direct initially. Reading your post, you're not 6 months late in paying - have they applied their fee incorrectly?

trailingspouse

Does statutory interest apply here? (You say you own the company that owns the flat)

That would be 8% above base rate.

solidpro

Does statutory interest apply here? (You say you own the company that owns the flat)

No, they said it's £144 for any late payment to any tenant and it's non-negotiable. If I don't pay, it goes up to £288 next month. That's how the negotiation currently went...!

It says "if you are liable to pay an administration charge, it is payable only to the extent that the amount is reasonable".

It later says that we have the right to apply for a first-tier tribunal if any formula specified in the lease for calculating an administration charge is unreasonable".

I guess I should ask them what their formula is...!

solidpro

"An applicant who paid a fee can ask the tribunal to order another party or parties to reimburse the applicant in whole or in part. The tribunal will make an order to that effect at the end of the case if it is fair to do so."

https://formfinder.hmctsformfinder.justice.gov.uk/t541-eng.pdf

That's something at least...

We will ask them to describe how they come to the fee of £144....

Lummoxley

The trouble with some management agents I've found in the past is that their "management fee" is the best when they quote for the contract.

They then, I suspect, ramp up their profits by using preferred contractors, charging for works never done and through such admin fee's.

Wait till you sell and your buyer's solicitors has to obtain required info. The fee's for "admin" can be outrageous. :mad:

solidpro

I know what you mean. I've learned a lot buying this place and know that not all leaseholds are the same!!!

csgohan4

life is too short , chalk it down to experience and set up reminders to pay the lease

G_M

Did you read the links (and explore other areas of the leaseadvice website)?