Leasehold Service charges

blewden13

Afternoon Martin , looking for some help and advice. I have owned my flat for a number of years now. The service charge increases annually but I also get a Bill of deficits at the end of the year which nearly as much as the annual service charge. Last year I was served a section 20 notice which I was unable to contest which was for external decoration which was a huge outlay on top of the annual service charge. I requested proof of quotes for this but was never issued with them and once again this year have been issued a invoice for £1000.00 for deficits from last years service charge. Can you advise where I stand and who may be able to help. At the moment I’m throwing money at a service charge I have no evidence of where the money is going.. 
 Thanks 

princeofpounds

Martin isn't really involved directly on this Board (unless he has a secret sockpuppet called Crashy_Time!) as he sold the business some time ago, though he still has some corporate role.


You will probably benefit by speaking to Leasehold Advisory Service (a govt-funded entity) about your situation. However, you will be able to find a lot of information about how service charges work and your rights at this link. https://www.lease-advice.org/advice-guide/service-charges-other-issues/

Service charges are often a tricky thing - you have to pay them, as long as they are correctly demanded, and you don't have much control over when they are charged and the services that get provided, although various obligations will be specified in general terms in your lease. You do have some rights to inspect accounts and receipts however, which are detailed in the link I pointed you to.

Ultimately if you want to contest service charges then it's a question of going to a Tribunal, but to make that worthwhile they need to be big enough and the mismanagement significant enough to justify the legal expenses.

It is of course money that is used to insure and maintain the building and communal facilities - someone has to pay that, just as you would if you owned a house yourself. ~£2000 a year (implied by your comments) is not at all an unusually high amount, although it can obviously vary hugely depending on the building and services.

NameUnavailable

The 'basic' service charge on a flat is for insurance, to pay the management company for being the management company and maybe a bit of cleaning of communal areas and grass cutting and communal lighting bills.

The redecoration was 'major works' so in addition to the service charge and they correctly issued a Section 20 notice. You did have the opportunity to ask questions about the works and suggest contractors other than those used by the agents - did you? (although there is no obligation for them to even get quotes so it's a bit of a waste of time).

Service charges have to be reasonable and the work has to be necessary - presumably the lease states that the property is redecorated every X years, so the management company have to do that or the freeholder is in breach of the lease. Of course it may not be absolutely necessary but it's also a nice little earner for them.

It's all part of the fun of owning a leasehold flat. You are at the mercy of the freeholder/management company. You could go to tribunal but you won't win if it's stuff that's required by the lease. You might get a reduction if the charges were deemed unreasonable but you'd have to prove that. Basically you're looking at a lot of trouble and expense to contest the charges at tribunal and even if you did 'win' you would still have to pay your legal costs AND most probably the freeholders costs (so of course he can employ a better lawyer than you!).

The other option is to seek to get Right To Manage for the block in cooperation with your neighbours, or even better, buy the freehold.

bouicca21

How does the £1,000 deficit charge relate to what you have already paid (not including the sum due under the section 20)?  Have you asked to see a summary of the accounts? What does your service charge cover?  Without knowing the answers it is impossible for any of us to know whether you are justified in complaining or just excessively parsimonious.

I am currently under a section 20 for decorating the outside and the communal areas.  Yes, it will be a substantial additional outlay but I am absolutely delighted. Making the building look good means making my property more attractive to a potential purchaser.  Besides I do not wish to live in a place that looks unloved and run down.