Management company dispute

YorkieG

Apologies in advance if the thread sounds a bit random, this is a situation that neither my wife nor I have come across before.


Brief description:

Second home, new build (If you can call it so), development only planned to be X number of properties, our property is an afterthought, therefore it’s X+1 now. We only share 1 service with the rest of the properties on the development, other services are independently supplied. However, electricity and water meters are located on the management company’s land (Bare with me).

During the purchase of our property, the seller(s) (Also developers :think: ) were quite eager for the process to be rushed, our solicitor did a good job and managed to clarify most of the issues that they thought were unclear, this however proved to be tricky and at the end, the sale went through and we are/were the happy owners of a second home.

The area is popular with second home owners so we didn’t meet any ‘neighbours’ for a bit as no one else was there while we were (Short visits, we could not stay for too long). One day a ‘lady’ came past and introduced herself as the occupant of one of the other X properties on the development, asked too many questions and more or less refused to answer any of ours (She just pretended she never heard us and carried on saying what she had to say! Which was mainly who did we buy from and what was included in our purchase! Private matters if you ask me, but she felt she had the right to ask those questions! We didn't know the answers so it wasn't a problem for us, yet!). Our questions were regarding the management company mentioned in our purchase documents, we were aware that there’s a management company managing the premises and that there was a fixed annual fee to be paid.

During the sale, that management fee was not broken down into detailed description, our property is significantly smaller in both size and footprint than the other X properties, did not share most of the services the other properties are receiving as mentioned above, yet had to pay an equal portion of the management fee. Unfair but we knew we didn’t have much of a choice so we approved it.

Now back to the elephant in the room, the reason that the seller(s) were rushing turned out to be that there was an ongoing dispute between the owners of the other X properties on the premises (minus one property that was for sale by the same seller(s) that we purchased from, and another household that was not on board with the other owners). We were only aware of this dispute when the ‘lady’ mentioned above invited herself into our property approximately 3 months following our completion date.

The dispute was between the owners of the other properties and the Developer/Management company (More or less same individuals, working together, to a very poor code of conduct), it was due to the fact that the developer never actually finished major parts of the development plans of which the development was given approval by the local authorities (Local authorities seemed to have ‘lost’ documents and had no power to force them to finish the work). So the home owners were then trying to take matters to their own hands and tried to acquire the management company and the land of which the development is located at roughly the same time our purchase was going through.


The developer/management company were obviously not going to finish any work, and wanted our sale to go through quickly, once it has and we became owners, the developer then ‘gave’ the other owners the land and the management company (And the liability of any unfinished work :idea:).

Now this happened roughly within the first week of our purchase, yet when the ‘lady’ saw us shortly after, she never introduced herself as a director of the new management company, nor did she mention any disputes at the time. Only approximately 3 months after were we aware of all this.

Now everyone will say the sellers had an obligation to disclose any disputes, I am certain they did, but they haven’t. And the new management company (The other X-2 owners) are trying to invoice us a massive bill for finishing unfinished work by the original developers. PLUS their legal fees to acquire the management company and the land!

My wife and I were willing to contribute towards finishing the unfinished work (Some of which is too dangerous to be left unfinished), but we were shocked to see them trying to charge us for services that other properties benefit from, but we don’t, and we were shocked they were trying to charge us for their solicitor’s fees.

We got our own solicitors to see to the matter and they said we only have to pay for what we’re benefiting from (Which turned out to be even less than the annual fee included in the sale process), paid that along with a letter from the solicitors, and waited.

Couple weeks later, one of the management company’s ‘directors’ sent a cheque to refund and said we’ll be hearing from their solicitors soon. That has came with threats that they would disconnect our services and put a fence up so we wouldn’t ‘trespass’ on their property (Land)!

Now we only use one of the services that the current management company provides (Our solicitor insured that our use of that service is secured in the deeds so I know they can not disconnect us from that).

So this is where I need advice, please correct me if I’m wrong, but I believe that although our electricity and water meters, and supply equipment run through the current management company’s property, I still think it’s ours and our service providers’ property, therefore it would be vandalism if the current management company attempted to disconnect from services that they are not supplying us with.

Also the solicitors’ fees that the management company has incurred for the acquisition of the land and the management company during their dispute with the original developer, we did not benefit from those services and therefore they should only charge the current directors of the company for the acquisition of it because those are the beneficiaries of the services.

The current management company can probably put a fence up towards our property to ‘prevent us trespassing’ but I can simply jump less than a foot to my property and access it without using theirs. And not pay any of those ‘ladies and gentlemen’ a penny!

I do want the situation resolved though, we did try to pay and they refused the payment, so what we would like to do is to pay for services that we are benefiting from (One service) and contribute into securing the premises, but not to refund the current directors’ acquisition fees and the services that other properties are benefiting from. Is that opinion of mine legally sound or is it a matter of what’s on the deeds and who’s solicitors’ budget is greater? Plus, even if it is in the deed, shouldn’t the acquisition be treated as a commercial transaction? If someone else bought the management company, surely they wouldn’t be able to pass their purchase fees to the homeowners in the premises they manage!

Thank you for taking the time to read this! The situation is quite complicated and I have no legal background, English is not my native language as well so please ask for clarifications if required.
Any advice will be greatly appreciated :beer:

InterestedParty2018

Is it a leasehold property or Freehold property?

Leasehold - the lease will tell you what you are obligated to pay towards (or not) and how expenditure is shared between the other interested parties.

Freehold - Your title/TP1 will state what you are obligated to pay towards, how it is split and any other relevant covenants.

YorkieG

I think it's freehold, but the deeds were truly vague, even to our own solicitors, it's all grey areas!


I think the original developers wanted to put the 'new' management company in a tight position as a punishment, their own solicitors did admit that the deeds that our sellers (Alongside the developer) drafted were poor and that we do have the right to benefit from that single service we're using.


They however jumped to make threats regarding us trespassing and cutting services! Which tells me a lot about how weak their argument is! If law is on your side, you don't act like a thug!

troffasky

Whilst your post is lengthy, it's a little vague. You might get some more concrete answers if you posted more detail.

• What is the service you benefit from?
• Why do they claim you are trespassing?
• Is it a house or a flat?
• How can you have got as far as owning it without being certain about the tenure [leasehold/freehold]?
• What do they claim the liability is that somehow comes attached to your house?

They can't cut your utilities off just because your meters are in their property. There is presumably some mechanism whereby they can request the services are rerouted so that the meters are no longer on their property but it's won't be something they can just do.

deFoix

InterestedParty2018 wrote: »

Is it a leasehold property or Freehold property?

Leasehold - the lease will tell you what you are obligated to pay towards (or not) and how expenditure is shared between the other interested parties.

Freehold - Your title/TP1 will state what you are obligated to pay towards, how it is split and any other relevant covenants.

This.


Assuming its leasehold what exactly does your lease say about which service charges can be levied? Leasehold service charges have to be reasonable by law. Sounds like your solisitor knows what they are doing.

eddddy

YorkieG wrote: »

Second home, new build (If you can call it so), development only planned to be X number of properties, our property is an afterthought, therefore it’s X+1 now.

What sort of development is it? For example, is it a development of holiday homes - like lodges?

YorkieG wrote: »

I think it's freehold, but the deeds were truly vague, even to our own solicitors, it's all grey areas!

It won't be the case that your solicitors don't understand what you've bought.

So you need to get up to speed by understanding what you have bought.

It may be a freehold, a long lease (over 21 years), a short lease (under 21 years), or some kind of licence to occupy.

Whatever it is you've bought, the documents you signed will state what rights you have, and what obligations you have (i.e. what you have to pay for).

YorkieG

troffasky wrote: »

Whilst your post is lengthy, it's a little vague. You might get some more concrete answers if you posted more detail.

• What is the service you benefit from?
• Why do they claim you are trespassing?
• Is it a house or a flat?
• How can you have got as far as owning it without being certain about the tenure [leasehold/freehold]?
• What do they claim the liability is that somehow comes attached to your house?

They can't cut your utilities off just because your meters are in their property. There is presumably some mechanism whereby they can request the services are rerouted so that the meters are no longer on their property but it's won't be something they can just do.

I apologize for being vague, it was quite difficult to include every piece of information available to both my wife and myself, hence my attempt to include what I considered to be useful information.


The service our property’s benefiting from is sewerage treatment, and a visitor’s car parking spot (Both insured in the deeds which were redrafted upon our solicitor’s request during the purchase, this is why I said that they can not disconnect our property from), where the other X properties are benefiting from the same service, plus communal lighting, a shared LPG tank and landscaping in the communal areas which our property does not overlook nor located near.


I am not sure why do they claim we’re trespassing, neither is our solicitor believe it or not, not till the last time we (my wife) was in contact with them, they were trying to clarify that with the management company’s solicitor. I personally believe that they are claiming that because we have to drive off a road into a communal area to get into our parking spot which is attached to our property (Not the same visitor’s parking spot mentioned above, this is the property’s parking spot). Or we’d have to walk on land acquired by the current management company from the developer (Who happened to be the previous management company’s owner).


The property is a house, a freehold, the confusion comes from 2 reasons:
1- I am not a British citizen as mentioned in my original post, all these terms are new to me.
2- I do not have enough time or legal knowledge to deal with the solicitor’s, my wife is in contact with them and I’m trying to connect the dots, not the member’s fault that I’m a bit vague though so please accept my apologies for the lack of information provided.


They claim that the liability is: Total costs of EVERYTHING the current management company has financially paid for is equally divided by the number of properties in the development, INCLUDING their solicitor’s fees for their acquisition of the land and the management company! A dispute which started several months before we even became owners of the property.

YorkieG

Boler1985 wrote: »

This.


Assuming its leasehold what exactly does your lease say about which service charges can be levied? Leasehold service charges have to be reasonable by law. Sounds like your solisitor knows what they are doing.

The solicitor’s office did a good job during the purchase I think, or so did we till we were faced with the trespassing claims. Can not say the same about their litigation office who were assigned following the complications though.


I have to emphasise on the fact that the sellers (Who are/were the co owners of the development) were misleading and to put it bluntly, a bunch of thieves as it turned out to be. This is why we were happy with the conveyancing part as they seemed to have insured us some rights, or else we wouldn’t even have the right to use any services at all by the sound of it! The sellers were practically selling the property and the land it stands on. Period.

YorkieG

eddddy wrote: »

What sort of development is it? For example, is it a development of holiday homes - like lodges?



It won't be the case that your solicitors don't understand what you've bought.

So you need to get up to speed by understanding what you have bought.

It may be a freehold, a long lease (over 21 years), a short lease (under 21 years), or some kind of licence to occupy.

Whatever it is you've bought, the documents you signed will state what rights you have, and what obligations you have (i.e. what you have to pay for).

I personally do not have much faith on the current solicitor, the problem however is that hiring another solicitor, or even trying to challenge these charges (Legally) will probably end up costing more than the charges we’re faced with. We therefore need to draw the line and stop before it becomes financially inefficient to challenge the management company.



This is why in my original post I was asking whether it was legal (Even if it was down to the deeds. Which I will, sadly, assume are not in our best interest!) for the management company to be trying to charge our property for either:
1- Services we are not receiving or benefiting from.
2- Legal costs that the current management company incurred during the acquisition of the land and the management company.
3- Do we have the legal right to request invoices for the charges we are ‘required’ to pay, and if so, would the solicitor’s fees for the acquisition, which started prior to our purchase, be payable by us or by the previous owners who owned the property at the time of the dispute of which the charges were paid to resolve?

eddddy

YorkieG wrote: »

This is why in my original post I was asking whether it was legal (Even if it was down to the deeds. Which I will, sadly, assume are not in our best interest!) for the management company to be trying to charge our property for either:
1- Services we are not receiving or benefiting from.
2- Legal costs that the current management company incurred during the acquisition of the land and the management company.
3- Do we have the legal right to request invoices for the charges we are !!!8216;required!!!8217; to pay, and if so, would the solicitor!!!8217;s fees for the acquisition, which started prior to our purchase, be payable by us or by the previous owners who owned the property at the time of the dispute of which the charges were paid to resolve?

It's legal for them to charge you whatever you have agreed to pay them.

That's why people are trying to find out what you have agreed to. But you are not providing very much explanation.

If the property is freehold, you've probably signed a deed agreeing what you will pay for.

(If the property is leasehold, the lease states what you have agreed to pay for. And leaseholders have more statutory protection than freeholders.)

YorkieG

eddddy wrote: »

It's legal for them to charge you whatever you have agreed to pay them.

That's why people are trying to find out what you have agreed to. But you are not providing very much explanation.

If the property is freehold, you've probably signed a deed agreeing what you will pay for.

(If the property is leasehold, the lease states what you have agreed to pay for. And leaseholders have more statutory protection than freeholders.)

This seems to be the dilemma, when we were presented with the overpriced invoice from the management company, we took the matter to the solicitor to investigate, they decided that we do not owe anything, at all. And I mean NOTHING, not even fees to cover maintenance of the sewerage treatment facility which we are benefiting from, they did advise however that we should contribute towards it as we’re benefiting from it. We did that and made the payment along with a letter from our solicitors, the management company refunded (Well, wrote a cheque, which we did not cash out, yet!) And their solicitors contacted us with those threats.


We do not intend to use the facility without paying, we have agreed that we would need to contribute, we are even happy to contribute towards charges to finish what we consider a dangerous unfinished area in the communal area, although it’s not even a liability of ours, we just want to get on with it so we can enjoy what was purchased to be a place to relax in between our extremely stressful busy days.


I am sorry if I’m failing to provide information which are crucial for members to help, but the reason I can not provide them is that they simply do not exist, or are not clear to neither myself, my wife, or those people in suits charging us around £300/h claiming to be of legal knowledge.