Late Payment of Service Charges, outside of lease

The_Magnificent_Spoon

Hi All,

Hopefully this isn't quite as straight forward as 'you paid your service charge late, cough up!' :beer:

But Last year, I was sent my bi-annual service charges. They were promptly paid. However, I then went away on holiday for a month (It was ski season!), to return to find my management agent had sent me an additional bill for an extra £220 service charges. They had also sent me two reminder letters in this time, and added on approximately £140 in 'administration charges'.

Obviously, this is fishy.

I paid the additional £220 service charges but told them to do one over the 'administration charges', so they added more 'administration charges'. And more, and more. Until they've now applied to the tribunal to get me to pay what is now about £400 made purely of 'administration charges'.

So far, my arguments are as such.

1) my lease wording specifically allows them to collect service charges, once in january, once in july. Not whenever they please.

2) the lease wording does not specifically allow them to apply late payment fees, anyway. It specifically only refers to adding interest at 4% above base rate.

3) I asked for a breakdown of these administration charges and to prove their expenditure, they refused, merely saying I already had the information (I dont)

4) the charges aren't reasonable. Theyve submitted info with their tribunal statement that they are paying £100 an hour for admin staff to send a template letter saying I owe them some money. They will be earning minimum wage, not £100 an hour.

5) they claim that the administration charges were levied 'in contemplation of submitting a notice under section 146'. Section 146 can not be applied for, for charges under £350 therefore is invalid.

6) they've not submitted their applications for payment in a timely manner. They've sent reminders by second class, requesting payment within 7 calendar days (5 working days). Second class quite often takes 5 working days (Royal mail happily admit this, and state that delivery really shouldn't be expected for up to 14 days)

Can anybody give me any viewpoints on this? Any thing I've missed (that I should either be arguing, or that they could argue so I can counter it in advance?)

Cheers,

The Spoon

InterestedParty2018

My thoughts...

Usually service charge demands (routine invoices) are sent 2-4 weeks before the due date, chased with a simple reminder 7-14 days after the due date... and then they start getting heavy!

This timeline covers more than your 1 month away. Also, in *theory* you should know that you service charges are due around that time of year, so a little bit of a telling off in that respect.

Of course, I do not know what is in your lease, but it is very likely there will be some covenant which will be a sweeping clause to allow the Freeholder (and therefore the MA) to recover cost "in contemplation/preparation of serving a 146 notice" or similar action for dealing with a breach. (ie non-payment of service charges in accordance with the lease terms is a breach.)

In terms of reasonableness, I fully appreciate that it may seem that the admin clerk churning out these chaser letters are not paid £100 per hour, but there are various elements involved in arrears chasing, taking the time of the Property Manager, the accounts team, the secretary and then postage etc. It is not fair that management time paid for by the lessees is spent on recovering arrears from non-payers, thus it is treated separately, and billed accordingly.

In my experience, most solicitors charge circa £150 + VAT for a "letter before action", so possibly on a par.

Charging fees to recovery fees is naughty though. I don't believe judges and tribunals look favourably on parties taking action to recover "fees only".

BTW, if they are so regimented about arrears recovery, I would prepare for an invoice for the interest, which you have already confirmed is permitted in your lease!

diggingdude

InterestedParty2018 wrote: »

My thoughts...

Usually service charge demands (routine invoices) are sent 2-4 weeks before the due date, chased with a simple reminder 7-14 days after the due date... and then they start getting heavy!

This timeline covers more than your 1 month away. Also, in *theory* you should know that you service charges are due around that time of year, so a little bit of a telling off in that respect.

OP paid service charge before holiday unless I am miss reading it, this was an additional charge which they would not be expecting. I sympathise with OP over this

ThePants999

I don't have any advice, but I really, really hope you beat the cheeky ****ers on this one.

InterestedParty2018

Sorry OP, I miss-read.
This charge was not a routine service charge, but an extra/additional charge. Please therefore ignore my comments regarding the process.

Can I ask, what were the charges for?

It is not unusual to receive invoices for extras (major works, insurance, deficits), but it is not reasonable for the agent to aggressively chase (you mention an invoice and two reminders) in a space of 1 month.

The_Magnificent_Spoon

Hey guys,

Sorry I totally got busy in life and forgot to reply to this. Thank you all for your input - I did read through it!

We've just recently had orders from the judge that the claim is to be dismissed. Huzzah!

However. Not quite the end. I've just today received my bi-annual statement, where they have again requested payment all the charges, and all their court costs, despite the judge dismissing their claim.

So, I'm assuming I need to get the courts to enforce the order somehow. But this is where I'm stuck, as I've had a look online but can only find advice for applying to the court to enforce an order if the defendant loses and doesn't pay. I'll google harder...

pretamang

I think the point is that they need an order to force you to pay the charges, which they've already failed to get so cannot enforce this.


You're not trying to enforce anything, you already have the decision so I would write back reminding them of this.

eddddy

If I understand your posts correctly, you haven't paid the disputed amount - so you don't want them to pay you anything, so there is nothing to enforce.

In general, if somebody sends you demands for payments which you don't owe, you could ignore them and/or you could remind them that you don't owe it.


I guess this only becomes an issue, if, for example, you decide to sell and the freeholder reports that the money is outstanding. So I guess you need to keep 'reminding' them to correct their records before then.

The_Magnificent_Spoon

OK - there are a couple of issues that I'm worried about. One was with selling the property as I'm currently considering selling it this year, and obviously anything being reported as outstanding would be quite an issue.

The other is that I really don't have the time to keep batting off their demands. They've already wasted a huge amount of my time with this and I could really do with it just stopping. :mad:

Throughout the tribunal hearings they lied multiple times, including on signed statements of truth, advising that I had not made any payments where I'd submitted bank statements showing I had etc, its all just getting a bit ridiculous...!

eddddy

... Just to clarify about the court legal fees.

Are they just asking you (alone) to pay the court and legal costs, or have they added them to the total service charge, which is split amongst all the leaseholders?

Frustratingly, even if the freeholders (or their agents) lose a case, they may still be able to add their legal costs to the total service charge, so they have to be paid by all leaseholders.

It depends on the precise wording of the lease.

See: https://www.lease-advice.org/article/recovering-legal-costs-through-the-service-charge-a-recent-decision-of-the-upper-tribunal-lands-chamber/