Service Charge Deficit

Heating

Hello,

I own a freehold house and a leasehold garage on a new Barratts estate. The estate is managed by Chamonix Estates.

Today I received an invoice for a service charge deficit for £122.22 for the period 01/01/2017 - 31/12/2017.

There are a few things concerning me about this:

- First it took six months for them to notice a deficit and try to cover it.
- Second I have recently paid the service charge for the period 01/01/2018 - 31/12/2018 and it was a total of £207.47. Which means the deficit was and 50% of the estimated cost. How can they be so far out?
- Third the due date is 25/06/2018. I have received the invoice on Friday for an unexpected charge and they expect the payment on the Monday. That seems unreasonable at best and leads me to think they want people to panic and pay the invoice before having a chance to think.

What are your thoughts? Does it seem like something is up? If so what can I do?

Thanks.

daveyjp

They have 6 years to claim the money.

You have the right to know what the bill is for and how it is calculated.

As its a new build the £122.22 may have been an estimate based on their experience, or deliberately low to make you think it was reasonable.

This may not have been enough to cover expenditure and the £207.47 covers this year and the deficit for last year.

Ask them for a breakdown of how the bills for both years have been arrived at and you expect this before you pay what is due.

eddddy

Haven't they provided a breakdown of last year's actual spending, as well as a breakdown of the estimated service charge this year?

You should be able to spot where they spent more than expected - and perhaps judge if they've made enough allowance in the same areas this year.

NeilCr

In my experience invoices like this for the previous year do take a time to arrive. They can't send them out until the accounts for that year have been prepared, agreed and audited.

I'd agree with eddddy and daveyjp too. Did they send a copy of the accounts with the demand?

These things can occur because of unexpected expenditure. For example, we had an awful lot of expenditure last year on our automatic gates. This led to an overspend and consequent invoices to residents.

G_M

It's perfectly normal for service chares to be collected annually in advance (or quarterly/monthly in advance) based on what the freeholder expects to spend.


At the end of the year, the actual costs are calculated, and this can take time especially if it needs auditing. A refund, or additional invoice, is then sent out as appropriate.


This should all be laid out in your lease - I assume you've read it?


Having said that, the annual accounts should be supplied/made available for you to inspect, so you can see where your money has been spent.