Selling a Leasehold property suddenly being asked for £9321.45 Service Charge

james277

blue_max_3 said:

davidmcn said:

james277 said:

greatcrested said:

Have you actually got a breakdown of what these charges are for?

Ground rent: which years being claimed for and how much each year?

Service charge: accounts for each year showing not just the total but what it was spend on for each year?

Yep 2 days ago i was given a breakdown it's £1600 insurance each year and £250 ground rent each year that's due

*blink*

How much for the insurance? That's absurd (assuming you're not living upstairs from a fireworks factory or something).

Agreed. That is a huge amount. You need to see why it was so expensive. I used to insure a whole property of three two-bed flats which had been underpinned for under £1k total (approx £350 per flat).

Wow thanks so much that is useful to know. I have the policy number but when calling Allianz it seems that they can't give me any info unless I'm the one who took the policy out. Am I allowed to ask to see proof that this is the figure?

Is there a way for me to get a quote myself for the property? To show that these are absurd. Would this standup in court as to much? 

I've attached the demand I received from the freeholders solicitor

greatcrested

Even if those insurance costs were for the whole building rather than just your flat's share, that would be expensive!

I'd ask to see the insurance quotes/bills as well as the policy certificate and policy.

And yes, speak to an insurance broker and ask for a quote for the building to compare.

Do you live next to a chippy or fireworks shop?

james277

greatcrested said:

Even if those insurance costs were for the whole building rather than just your flat's share, that would be expensive!

I'd ask to see the insurance quotes/bills as well as the policy certificate and policy.

And yes, speak to an insurance broker and ask for a quote for the building to compare.

Do you live next to a chippy or fireworks shop?

Thank you, i will do some research on insurance brokers, i've never had to find one so no idea what companies to use. Nope there's a garden on our left side and on the right is another house with 2 flats in. I believe my solicitor should have received the insurance policy. Am I allowed to ask for the bills?

eddddy

james277 said:
 Am I allowed to ask for the bills?

Yes - definitely for the past 12 months. (Perhaps for longer, as you haven't received service charge demands.)

As LEASE explains:

the law gives leaseholders a right to request a summary of the service charge account and to inspect receipts, accounts etc in relation to the last accounting year, or where accounts are not kept by accounting years, the past 12 months preceding the request.

However, under the law, you need to write to your landlord or managing agent and request a summary  of the accounts. Once you do that, the summary should be provided within one month of your request (or within six months of the end of the accounting period whichever is the later) and should be certified by a qualified accountant if there are more than four flats in the building.

Within six months of receipt of the summary, you have the right ask the landlord to allow you to inspect receipts, accounts etc. as a follow-up to provide more detail on the summary and to provide facilities for them to be copied. Facilities for inspecting the documents should be provided within one month of your request and should be available for a period of two months.

Link: https://www.lease-advice.org/faq/how-can-i-find-out-what-my-service-charge-is-being-used-for/

But I doubt that your buyer will wait around whilst you do this - so it may be better to pay under protest in the meantime.

james277

eddddy said:

james277 said:
 Am I allowed to ask for the bills?

Yes - definitely for the past 12 months. (Perhaps for longer, as you haven't received service charge demands.)

As LEASE explains:

the law gives leaseholders a right to request a summary of the service charge account and to inspect receipts, accounts etc in relation to the last accounting year, or where accounts are not kept by accounting years, the past 12 months preceding the request.

However, under the law, you need to write to your landlord or managing agent and request a summary  of the accounts. Once you do that, the summary should be provided within one month of your request (or within six months of the end of the accounting period whichever is the later) and should be certified by a qualified accountant if there are more than four flats in the building.

Within six months of receipt of the summary, you have the right ask the landlord to allow you to inspect receipts, accounts etc. as a follow-up to provide more detail on the summary and to provide facilities for them to be copied. Facilities for inspecting the documents should be provided within one month of your request and should be available for a period of two months.

Link: https://www.lease-advice.org/faq/how-can-i-find-out-what-my-service-charge-is-being-used-for/

But I doubt that your buyer will wait around whilst you do this - so it may be better to pay under protest in the meantime.

Thanks! Yep this is what I intend to do, i'm not emailing my solicitor until I've spoken to LEASE on Friday. After this I will then email my solicitor to let the freeholder know that i will pay under protest and will take it to a tribunal. I will also let the buyers know that it looks like they'll be able to fight the high service charge payments, they may want to try and buy the freehold to be honest

cattie

Wow, a shocker of a price for insurance. I pay around £450 per year for my 2 bed ground floor share of freehold flat!  Unless your building has been fire bombed or something in the past, making it an incredibly high risk property I fail to see how such a premium has been levied. Are you sure you're not being billed for the whole street!!

greatcrested

Whilst the insurance costs seems exorbitant (maybe he just thought of a random number and doubled it....!), it does kind of beg the question of whether you thought the building was insured and why you were not being billed........

james277

greatcrested said:

Whilst the insurance costs seems exorbitant (maybe he just thought of a random number and doubled it....!), it does kind of beg the question of whether you thought the building was insured and why you were not being billed........

I knew the building was insured by the freeholder, however had not heard anything from him in regards to paying for it. When I brought the property the freeholder owned both flats and there was no building insurance, this was then arranged while I was purchasing the property. I am waiting for my solicitor to send the policy over to me as I want to double check that this was in fact sorted. As I'm making a list of what I can take him to court for.

davidmcn

cattie said:

Wow, a shocker of a price for insurance. I pay around £450 per year for my 2 bed ground floor share of freehold flat! 

I'm getting quotes of around £100 (including contents cover) for my flat. Scotland, so not a freehold/leasehold set-up, but the risk to the insurers is the same.

james277

cattie said:

Wow, a shocker of a price for insurance. I pay around £450 per year for my 2 bed ground floor share of freehold flat!  Unless your building has been fire bombed or something in the past, making it an incredibly high risk property I fail to see how such a premium has been levied. Are you sure you're not being billed for the whole street!!

Yes from my quick calls to get an insurance quote myself I believe the reason it is high, is because he owns the top flat and rents it out. So has combined his landlord's insurance with the building insurance, so he has got me paying half of his landlords insurance.