Service Charges issued by different Ltd

Liv_Kent

Hi everyone,
we have been issued service charges for the past 2 years yesterday that look strange and don’t add up. We have asked Freeholder (an ltd company) to clarify but haven’t heard back.

- the account number doesn’t verify when I’m trying to pay using the company name. I suspect the account is director’s private one. Is this even legal?

- there are some invoices included that clearly state services are for our building (cleaning, painting, waste removal…) however the name on these invoices is not our Freeholders Ltd but completely different Ltd company (same director though). Again is this legal? Shouldn’t every invoice issued have the name of our management company on it, and be settled by that management company?

Thank you

NameUnavailable

Service charges may be collected by a management company which is often different to the freeholder (if a company).

If you think the charges are wrong your first point of contact should be to query them with the freeholder, but as both co's have the same director it's likely to be correct - worth asking though in case someone is trying to defraud you out of money by pretending to be the freeholder.

Liv_Kent

NameUnavailable said:

Service charges may be collected by a management company which is often different to the freeholder (if a company).

If you think the charges are wrong your first point of contact should be to query them with the freeholder, but as both co's have the same director it's likely to be correct - worth asking though in case someone is trying to defraud you out of money by pretending to be the freeholder.

Hi! Thanks for your reply. Our Freeholder is a company and that same company is also our managing agent. The second  company that appears on the invoices definitely has nothing to do with us, it’s a company that has been set up for a different development. The director is the same, but we had nothing to do with that second company. I had no reply from the director which is why I’m trying to find out my rights. Across 4 invoices we were given (and these are just invoices, not receipts) there is only one in the name of our managing company. 

eddddy

It's sensible to check with the freeholder that it's a legitimate bill. There's no legal problem with the bank account being in somebody else's name.

But I would ask the freeholder for the name of the bank account holder, on the basis that it allows me to see 'Confirmation of Payee' when I'm paying, which reduces the risk of me sending funds to the wrong account by mistake.

user1977

Liv_Kent said:

NameUnavailable said:

Service charges may be collected by a management company which is often different to the freeholder (if a company).

If you think the charges are wrong your first point of contact should be to query them with the freeholder, but as both co's have the same director it's likely to be correct - worth asking though in case someone is trying to defraud you out of money by pretending to be the freeholder.

Hi! Thanks for your reply. Our Freeholder is a company and that same company is also our managing agent. The second  company that appears on the invoices definitely has nothing to do with us, it’s a company that has been set up for a different development. The director is the same, but we had nothing to do with that second company. I had no reply from the director which is why I’m trying to find out my rights. Across 4 invoices we were given (and these are just invoices, not receipts) there is only one in the name of our managing company. 

But do the other costs referred to appear to be carried out on your development? Presumably you know whether the cleaning/painting etc was done?

eddddy

Is the property leasehold or freehold?

If it's leasehold...

If the work was carried out on your development,
and it is work that the lease requires the freeholder to do,
and it was reasonable to do the work (e.g. re-painting was actually required)
and it was done to a reasonable standard,
and the cost was reasonable
(and there was nothing else that was not reasonable about the work)

... then it's reasonable for the freeholder to charge you for your share as a service charge.


It's probably a bit messy for the freeholder's accounts that it was invoiced to a different company, but that's their problem.

And if the freeholder is messy with their accounts, maybe keep an eye on future service charge bills, to make sure the correct amounts are charged to the correct developments.

Liv_Kent

eddddy said:

It's sensible to check with the freeholder that it's a legitimate bill. There's no legal problem with the bank account being in somebody else's name.

But I would ask the freeholder for the name of the bank account holder, on the basis that it allows me to see 'Confirmation of Payee' when I'm paying, which reduces the risk of me sending funds to the wrong account by mistake.

He is the one who sent the bill. Good point re Payee, thank you!

Liv_Kent

It's probably a bit messy for the freeholder's accounts that it was invoiced to a different company, but that's their problem.

And if the freeholder is messy with their accounts, maybe keep an eye on future service charge bills, to make sure the correct amounts are charged to the correct developments.

This is what I was trying to find out. To me it makes no sense to have an invoice issued by an LTD but then request payment to be made to someone’s private account. But if it’s legal I won’t question it. 

Yes, some of the work has been done, I have no issue with that bit and we’ll pay our portion. 

User1977

Yes, some of the work has been done, I have no issue with that bit and we’ll pay our portion. 

eddddy

Liv_Kent said:

He is the one who sent the bill. 

OK. 

You said the bill "looked strange" and seemed to be unexpected.

I thought one of your concerns was that you'd received a suspicious (strange) looking bill, at an unexpected time, quoting a bank account number which didn't match the name on the bill - which are all indicators of fraud.

And you couldn't contact the supposed sender to confirm it was really from them.

But it seems that's not the case, and you are certain who it's from. So that's OK.

Liv_Kent

eddddy said:

Liv_Kent said:

He is the one who sent the bill. 

OK. 

You said the bill "looked strange" and seemed to be unexpected.

I thought one of your concerns was that you'd received a suspicious (strange) looking bill, at an unexpected time, quoting a bank account number which didn't match the name on the bill - which are all indicators of fraud.

And you couldn't contact the sender to confirm it was really from them.

But it seems that's not the case, and you are certain who it's from..

Yes, it’s not an issue whether it is from him. However, he’s someone who tends not do things by the book. To put it politely. He is not replying to our query regarding SC so no I can’t get in touch with him. He’s trying to charge us for some contracts that I know for sure we didn’t have, but some of the work has been done so that bit is fine. 

I’m just trying to find out as much as I can as I want properly issued SC in case we sell the place in future. 

I mean, what would a buyer think if I show them out service charges with bills invoices to 5 different companies? They’ll probably also ask what that is about .

You got the bit about the account right - SC are issued by his company, account number is his private one. But it sounds from the replays that’s ok. 

eddddy

Is your property leasehold or freehold?

(You talk about a freeholder, but it's not clear if it's the freeholder of your house/block, or the freeholder of some communal land on an estate of freehold houses.)


If you think you are being overcharged, there are steps you can take - but they're different for leaseholders and freeholders.