Service charge payment demand from over 12 months ago.

Tom_B_

A new company took over my service charge last January (and are very expensive in comparison. My quarterly payment went up over 40% but that's another story).

They have just send me a demand for a "Year End Balancing Charge" of nearly £600.  This is for the year just before the new company took over. There is no explanation of what this is for and the letter just says:

 This means that the prior managing agent spent more than they were anticipating and therefore there is a balance to pay.

They have left this a year before sending it to me. My hunch is that it's because my rights say:

9. You have the right to write to your landlord to request a written summary of the costs which make up the service charges. The summary must:
cover the last 12 month period used for making up the accounts relating to the service charge ending no later than the date of your request, where the accounts are made up for 12 month periods; or
cover the 12 month period ending with the date of your request, where the accounts are not made up for 12 month periods.

The problem is, now that the costs are from more than 12 months ago, I don't have the right to see them.

It is rather suspicious I am being asked for this now, nearly exactly 12 months since they took over. They will likely say they can't provide anything older than 12 months. But that leaves me in a position of having a £600 invoice with no way of finding out what it's even for.

What is the best thing to do here?  Surely the prior management company are obliged to tell me of costs in a timely manner and what they are for? For all I know they could have blown that £600 on their christmas party and stuck it on my account knowing that another company were about to take over. It doesn't look like I currently have any way of finding it out.

Wanderingpomm

You have a right to know how your money is being spent. Just demand details 

tink_1983

The service charge on our site has been a nightmare. Was 120 a year and slowly it has crept up and up.
Ask for full breakdown and maybe get together with neighbours to discuss issue and demand on mass to have more info?

eddddy

I think you're mis-interpreting the quote from the 'Summary of Tenant's Rights and Obligations'.

You don't provide precise dates, but it sounds like you're saying...

You are being asked to pay £600 in respect of a shortfall for the 12 month period ending December 2019. Therefore, you have the right to a written summary of the service charges for that 12 month period ending December 2019.

Also, very briefly...

• There is an '18 month rule' - you don't have to pay service charge costs incurred more than 18 months ago. (See: https://chacc.co.uk/compliance-blog/s20b-rule-explained/) 

• If you disagree with the bill - tell the management co that you will only pay the bill under protest, and that you plan to challenge it at a tribunal. (If the management company knows what they are doing is dodgy, that might make them re-consider.)

• However, even if you disagree with a service charge bill, it is best not to withhold payment - as late fees, solicitor's fees etc can be added. It is better to pay it under protest, then challenge it at tribunal. But make sure you say you are paying under protest.

princeofpounds

The rights to inspect accounts are more detailed than you seem to understand.
https://www.lease-advice.org/advice-guide/service-charges-other-issues/

One point that may be relevant - the 12 month limit only applies if accounts are not kept by accounting years, and they almost certainly are. If they are, you can see the last accounting year, which probably goes back further than 12 months unless you are unlucky on timing. Check the filings for you freehold company at Companies House. 

You should check if the demand is valid according to the criteria. You should ask to inspect invoices if you are eligible. You should check to see if the accounts are certified by an accountant if they need to be. You should check that all qualifying work was consulted in advance etc. 

I would also recommend that you contact the LAS (you can book phone appointments) to discuss your options.

AdrianC

You need to see the actual vs budget for the last year to find out what was higher than budgetted.

Service charges are based on the budgetary figures, because nobody's psychic.