Demand for service charges from Managing Agents in leasehold flat

Abode

I paid several thousand pounds in service charges last year to the agents who manage the block in which I own a flat, they insisted on doing external redecorations against the wishes of all the leaseholders. They made a complete and utter pigs ear of it and the work was halted and I have been told that there was an "underspend" of over 10 thousand pounds. This means that each leaseholder is owed over a thousand pounds. However, the managing agent is still demanding a further thousand pounds from each of us and they are threatening to pass the demand to bailiffs if I don't pay. They claim that the refund will be processed in September. I don't have a thousand pounds and I don't want to get into further debt, do I have to pay even though I am in credit?

HampshireH

Did they follow the section 20 process?
The payment should be no more or less than the notice and agreed quote.

Of course if less then this should be reimbursed.

What's their reason to delay until September? As it sounds like it all balances out and is for the same job seems a bit odd.

Did the approved contractor finish the job in the ends despite making a mess of it?

If they have employed a different company to do it properly or finish the job then this may explain it. But they would need to start the process again if asking for more than £250 surely?

princeofpounds

If the service charge is a valid demand, you have to pay. You can 'pay under protest', if you intend to challenge it at a later date (see below)

Read through all this:
https://www.lease-advice.org/advice-guide/service-charges-other-issues/

LAS is a govt-funded advice service, you can speak to them to get more help.

There is a lot to say about your predicament and I don't have much time, but here are some high-level thoughts:

- Check to see whether the service charge demands are valid. If not, that may enable you to delay paying.
- Check to see if it is worth challenging the redecoration work at Tribunal.
- Check to see if your block would be better off pursuing right-to-manage or collective enfranchisement (buying the freehold).

If all of this sounds like gobbledegook to you, suggest you read through as much material on LAS as possible to educate yourself as to how all this works.

eddddy

The law says any service charge must be 'reasonable'. If you don't think your service charge is 'reasonable', you can challenge it at a Tribunal.  From the info you give, it's difficult to judge how strong your case would be.

I guess a few things to be cautious of...

• If a section 20 consultation has been carried out correctly, it's very unlikely that a Tribunal would rule that the outcome is unreasonable.

• It's risky withholding service charges - unless you're going to Tribunal and confident that you'll win. Typically, late fees, solicitors fees, debt collector fees, etc can be added, which might add many hundreds of pounds to the bill. It's often better to pay 'under protest' and then challenge it.

• Your freeholder might inform your mortgage lender that your service charges are in arrears, and therefore your freeholder intends to forfeit your lease (i.e. repossess your flat). Typically, a mortgage lender will pay the arrears and add it to your mortgage, otherwise they risk losing the security for their loan.

On the other hand...

• Whether  keeping your £1k is 'reasonable' depends on the precise facts of why the managing agent is doing it.

• If managing agent's negligence resulted in the 'pigs ear' for the redecoration, you could probably argue that it's not 'reasonable' for you to bear the costs of the Managing Agent's negligence.

Taking a step back, you and the other leaseholders can look into taking over the management of the property using the 'Right To Manage' legislation.  See: https://www.gov.uk/leasehold-property/right-to-manage-and-management-disputes