Freeholder's agent instructed Debt Agency for Service Charge after I queried service charge :(

Lizzieee89

Hi.  I owed half of last year's service charge and was querying an accounting issue before making more payments.  Freeholder's agent has been pretty bad with raised costs and some owed refunds as well as some accounting errors.  There seems to be no consequences for bad management, as most leaseholders are too busy with their lives to care.

The managing agency's credit controller sent my arrears to a Debt Collecting Agency before I got my answers from managing agent.  I didn't even realise until a month afterwards as I never received a letter and I missed the email (the email was not obvious, it looked like a standard invoice like all the others but I guess I should open every single one from now on). 

It is one of those "no win no fee" agencies, who charge leaseholders a few hundred quid to recover the debt via numerous threats (the usual threats!).  Free service for freeholders.

I tried to talk to the managing agent but they just referred me to the Debt Collecting Agency.  Surely I can settle the matter with the managing agent and pay the arrears (after they respond to my query, hopefully) so they can tell the Debt Collecting Agency to stop?  It feels wrong to pay the Debt Agency a few hundred quid for this!  Or is that risky because of what the debt agency can do?  I've not responded to Debt agency yet, perhaps I can tell them I'm in the middle of querying the service charge accounts?

Any advice?  It's strange that I am paying the managing agent, who is clearly working for the freeholder and against me

Grizebeck

Ignore any debt recovery agency.  Totally and utterly powerless. I laugh at their letters. 
So forget they are even involved 
Ps 
They can not and I repeat can not do anything 

Lizzieee89

For service charge arrears, can't they do something to my lease?  Or does it need to go much further down the line for that to happen?  They said I must respond in 30 days or they will take me to courta and charge me extra!  All for querying a service charge bill from last year...I am happy to pay the bill now but then I lose the ability to make management answer my questions.

TripleH

I would make an overpayment of the charge (round it up) as a 'payment on account' and write a formal complaint letter stating that you have not received an answer to your query so are making a payment on account in protest and ask for a formal response to your queries specifying a deadline date (givecat least 10 working days).

Attach your queries to this letter and send it to the office of the managing agency marked complaint.

By rounding it up, it will make it a nightmare messy account for them to deal with.

Not paying means that they can take action per the leasehold which will usually mean that the mortgage holder may pay and add to your mortgage without arguement.

Managing companies are pretty useless.

Grizebeck

As advised a debt agency is powerless and most certainly can not issue a claim against
Don't even engage with them, its that simple

eddddy

Grizebeck said:

As advised a debt agency is powerless and most certainly can not issue a claim against
Don't even engage with them, its that simple

Without knowing more, that's potentially very bad advice.

We're talking about 'leasehold service charges' - that's very different from an ordinary debt.

eddddy

Lizzieee89 said:

I tried to talk to the managing agent but they just referred me to the Debt Collecting Agency.  Surely I can settle the matter with the managing agent and pay the arrears (after they respond to my query, hopefully) so they can tell the Debt Collecting Agency to stop?  

This is potentially quite a complex question. It depends on exactly what documents you've received, and what the documents said, and what the management company did and when.


But here are a few pointers.

• It sounds like you received a service charge demand last year - and you queried it and didn't pay it.

• However, the general advice is to pay service charge demands but say that you are paying 'under protest'. And then query the demand, and challenge it at a tribunal, if you want. (This avoids the problems you're now having.)

• If you don't pay a service charge demand, the freeholder (or their management company) can take 'reasonable' actions. Perhaps it's 'reasonable' to send you a reminder letter or two. Perhaps it's then 'reasonable' to instruct a debt collection agency. 

• The freeholder (or their management company) can charge you 'reasonable' fees - i.e. a 'reasonable' fee for sending a reminder letter, a 'reasonable' fee for a debt collection agency.

• If you continue not to pay, the freeholder (or their management company) can continue to take additional 'reasonable' actions, and charge you additional 'reasonable' fees.

Next steps that the freeholder could take if you don't pay include:

• 1) contacting your mortgage lender to say you have service charge arrears. Your mortgage lender is likely to pay the amount asked for, and add it to your mortgage.

• 2) Start proceedings to forfeit your lease (i.e. repossess your property). You'll get an opportunity to argue your case in court, or pay the outstanding service charge.

So perhaps your best bet is to contact the Managing Agent to say that:

• I do not agree that the original Service Charge demand was correct, because..a,b and c.
• I do not believe it was reasonable to instruct a Debt Collection Company
• I do not believe the fee charged by the debt collection company is reasonable

Therefore, if you insist on the full payment, I will pay under protest, and I intend to challenge the fees at a tribunal.

(If you want, you can propose fees that are reasonable, and that you're willing to pay.)

But if they don't reply quickly, it's probably best to pay the full amount asap.

TripleH

Yes, but if it has gone to debt collection company then there are other steps the management company can take.

I would agree to ignore debt collection company and not pay its fees but the issuecwith management company needs addressing.

The overpayment clears the o/s balance but will create a query that when you challenge, strengthens your case that you paid under protest.

I'd send a copy to the freeholder as well.

Lizzieee89

Thanks for the great advice!

So should I

1) call the managng agent and say I will pay X amount now and pay the rest after I get my answer (last time I called they said "only speak to debt agency as the debt has been passed on" but I feel they are bluffing)

or

2) Pay managing agent more than what debt agency is trying recover, and then ask them to answer my queries?  If I do this, should I email the debt agency and say I already paid their client their money so please stop your letters/emails/threats.

I don't want to pay the debt agency the few hundred quid admin fee as my Dad taught me that Debt Agencies are "scum", but of course I am scared of having credit issues

eddddy

TripleH said:

I would agree to ignore debt collection company and not pay its fees but the issuecwith management company needs addressing.

As I said above, the debt collection company fee might be a valid service charge fee.

It could be very risky not to pay it.

Grizebeck

eddddy said:

Grizebeck said:

As advised a debt agency is powerless and most certainly can not issue a claim against
Don't even engage with them, its that simple

Without knowing more, that's potentially very bad advice.

We're talking about 'leasehold service charges' - that's very different from an ordinary debt.

Not at all
Regardless of the Debt a third party has no involvement or rights to any debt. 
My advice has only concentrated on the DCA not the underlying issue