Property management company wants us to switch from monthly to annual service charge or impose a fee

mikethebone

Since purchasing a new build flat in 2017, we have been paying our monthly services charges via Direct Debit each month. Suddenly the property services company has sent us a letter stating that we are not paying in accordance with our lease agreement (which stipulates an upfront annual charge payable on the 1st November each year) and have indicated that if we want to continue paying monthly via Direct Debit than they will now charge us a £24 annual fee which they said is for "additional burden" related to processing payments outside of the terms stipulated in the lease.

They have given us one month's notice to switch to this upfront method before the £24 fee will get charged from 1st Nov.

They have acknowledged in a letter in 2019 that paying via monthly DD is fine and never raised fees before.

Given that we have already been paying on a monthly basis for 5 years via Direct Debit without incurring any additional fees, are they within their rights to do this? And given that they have only provided less than a month's notice before this requirement goes into effect, do we have any further rights here?

I would like to avoid this impertinent charge and stay on the existing payment plan as arranged, but I want to approach it in the right way.

Interested in your feedback!

sidneyvic

£2.00 extra a month, is it worth the hassle of arguing the toss....

saajan_12

They are right. 
If your lease says annual payments, then contractually, that's what you have to do. If they offered something different, that's a concession that can be removed at any time. Its not a binding agreement as you didn't give up anything in return. 

The only thing to check is what the last 12 months of payments referred to - ie with the monthly payments, are you
a) paying the current year "late" compared to the lease saying it should be at the start of the year, or 
b) paying the upcoming year "early" compared to the lease
That'll tell you when your next annual payment should be. 

As an alternative, you can take up their offer of £24 in return for monthly payments. Not inherently unreasonable as they do have to check a bunch of extra payments come in, but they don't have to be reasonable - you can always just stick to the annual payments per the lease. 

DullGreyGuy

mikethebone said:

if we want to continue paying monthly via Direct Debit than they will now charge us a £24 annual fee which they said is for "additional burden" related to processing payments outside of the terms stipulated in the lease.

£24 is cheap for both DD and getting to pay monthly, though its not clear if you are paying in arrears and so also getting credit for that price.

Our agents dont offer DDs but charge £35 admin if you pay by Standing Order and then it has to be 6 monthly inline with the normal payment frequency for cards/bacs etc

eddddy

mikethebone said:

Suddenly the property services company has sent us a letter stating that we are not paying in accordance with our lease agreement (which stipulates an upfront annual charge payable on the 1st November each year) 

Have you checked your lease to ensure it really does say that?

If it does say that, everything else the management company is saying is correct.

In fact, they can probably set any charge they like for processing direct debits. Or they can decide they won't deal with direct debits anymore, and insist that you pay in advance.

mikethebone

Thanks for the replies. Yes it is in arrears, and the lease does stipulate annually. I know that £2/month isn’t outrageous but they just dropped it on us within just a month of the full annual payment coming due and that means coming up with the full amount out of the blue or suddenly having to pay the charge. It’s almost as if they timed it that way to give as little notice as possible.

I will consider the advice given, thanks.