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

Grizebeck

eddddy said:

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.

It isnt a case of not paying what is owed but a third party has no right to anything and they can be removed from the process.

TripleH

Cheers, eddddy think you posted whilst I was typing.

Op, yes pay the outstanding balance owed but do it under protest.

If you ring, follow up with a letter as well (sent recorded) telling them you expect the debt collection fees to be wavered as they failed to respond to your query (they probably won't do this especially voluntarily but you need to ask)

eddddy

Lizzieee89 said:

Thanks for the great advice!

There is some terrible advice in this thread.

Maybe just ignore everything here and contact LEASE for some free advice. in a 15 minute phone call: https://clients.lease-advice.org/#/

Lizzieee89 said:

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)

 No.

That's probably the worst option of everything. More debt collection fees will probably be added. Legal action might still be taken against you.

Lizzieee89 said:

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.

You can pay extra if you want. But it serves no real purpose.

If for example, your account shows that you owe £958.50 - and you pay £1000....

The accountant will just type £1000 into their computer system, and the computer system will calculate that your account is now £41.50 in credit. 

Lizzieee89 said:

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

You won't have credit issues. But if you don't pay...

• you might be charged further fees
• your mortgage lender might be contacted - and they will pay
• your freeholder might start the process of forfeiting your lease (repossessing your flat)

user1977

Grizebeck said:

eddddy said:

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.

It isnt a case of not paying what is owed but a third party has no right to anything and they can be removed from the process.

Nobody seems to be claiming that the debt collection agency is personally entitled to anything though. They are acting as agent for the freeholder, who is (arguably!) entitled to what they're demanded.

eddddy

Grizebeck said:

It isnt a case of not paying what is owed but a third party has no right to anything and they can be removed from the process.

The service charges are owed to the freeholder.

Freeholders are 'allowed' to charge the leaseholders for the cost of debt collection agencies as part of the service charge (when reasonable)

Freeholders frequently instruct agents (management companies) to collect service charges on their behalf.

So it's likely that the freeholder can instruct a debt collection agency as their agent to collect service charges on their behalf.



Why do you think otherwise?

Grizebeck

Because a stranger to a debt never have has any rights unless a debt has been assigned (ie brought) 

Slithery

Grizebeck said:

(ie brought)

Brought where?

TripleH

My advice on the overpayment (and I'm only talking pennies) is to stop the money being taken and the query being ignored if the exact amount is paid.

Yes it will be treated as a payment on account but it adds further that you paid under protest rather than caved in.

My normal advice would be to set aside the money and challenge but the repercussions for not paying are too severe.

It is a bug to the management company because the money is (should be) sat in their client account and they need to reconcile it and deal with 'errors' plus it gives the Op a better position to query the management company if the difference disappears.

Lizzieee89

eddddy said:

Grizebeck said:

It isnt a case of not paying what is owed but a third party has no right to anything and they can be removed from the process.

The service charges are owed to the freeholder.

Freeholders are 'allowed' to charge the leaseholders for the cost of debt collection agencies as part of the service charge (when reasonable)

Freeholders frequently instruct agents (management companies) to collect service charges on their behalf.

So it's likely that the freeholder can instruct a debt collection agency as their agent to collect service charges on their behalf.



Why do you think otherwise?

Just to clarify, I don't have a mortgage.  And I owe half of last year's service charge.  The debt collection agency is a "no win no fee" company so the freeholder pays them nothing....they make money by having the leaseholder pay them.

The Debt Agnecy letter says if I respond to them within 30 days, I can get another 30 days before serious court action.  However, I'm worried that if I respond that it wil trigger something I don't want.  Maybe better to ignore?

The managment company still has not answered my query.   But "reasonable" is very debatable!

I am happy to pay service chage "under protest" now direct to managing agent, as long as it removes my fee to Debt Agency.  But what is the best way to do this if calling them is a bad idea?

eddddy

Grizebeck said:

Because a stranger to a debt never have has any rights unless a debt has been assigned (ie brought) 

Lizzieee89 - it's best to ignore some of these comments about debt collection agencies. Otherwise you could end up owing more money and/or face legal action.




The management company has told you to deal with the debt collection agency - so it sounds like the debt collection agency is genuinely an agent of the freeholder.

• If the debt collection agency has sent you a valid Service Charge Demand, it's probably best to pay it.

• Or if the debt collection company is chasing a valid Service Charge Demand that was issued by the Freeholder or Management company - it's probably best to pay the Service Charge Demand that was issued.

Pay under protest, and then challenge it.