Service charge debts

Wenpat

Hi
I’m looking for advice as at a loss to know how to go forward with this situation 
I bought my flat in June this year at the time the management company was changing hands. I received a letter from the new management company late august , introducing themselves and their portal.   My mistake ,I didn’t go on the portal as had t realised this was the way I pay the service charge!! The letter didn’t explain this . I went on in October to find out why I hadn’t received invoices to see the invoice for the service charge on the system with £220 legal fees and £180 admin fee extra.
I went on a live chat to see what these fees were for and was told this was  debt collectors fees and admin charges   I haven’t received anything from a debt collecting agency . So am I in a position to dispute these charges?.  I’m concerned that whilst trying to see where I stand with this they will be escalating charges without contacting me
any advise would be so welcome
thankyou

eddddy

I would try disputing the charges on the basis that...

1. Your lease does not require you to receive service charge demand via the portal, and
2. You did not consent in writing to the service charge demands being sent via the portal,
3. Therefore, the Service Charge demands must be sent to the property address
4. Therefore, you have received no valid Service Charge demands, so for the moment you do not owe any Service Charges
5. Since you don't owe any Service Charges, it's not reasonable to charge you debt collection fees, late fees etc.
6. (However, once you receive valid Service Charge demands at the property address, you will happily pay them - but not any debt collection fees or late fees.)

TBH, the above isn't explicitly stated in the legislation - but courts/tribunals seem to have agreed with the above.

Maybe put that argument to your management company - but if they don't back down immediately - the advice is usually to pay what they ask for, but tell them that you are paying under protest and you're considering whether to challenge the bill at a tribunal. (That approach stops them adding more debt collection charges.)

If you do take it all the way to tribunal, you probably can't be 100% sure what they will decide - for example, they might decide that you were partially/fully at fault for ignoring the letter.

Wenpat

Thankyou for your reply . It was really helpful , I have emailed them but not received a response and I’m really worried about escalating costs.  So I’m thinking of paying the debt company as I am apparently unable to pay the management company direct now it’s been referred to the debt company.    Then I’m thinking of contacting the financial ombudsman .

eddddy

The Financial Ombudsman isn't relevant to this - they regulate companies offering financial services.

If you want to challenge this, you'd do it at a First-tier Tribunal (Property Chamber). 

See: https://www.lease-advice.org/faq/how-do-i-make-an-application-to-the-first-tier-tribunal-property-chamber-for-my-service-charge-to-be-determined/

You can book a free 15 minute discussion about this with LEASE (a government funded organisation) here: 
https://clients.lease-advice.org/#/




Before paying the debt collectors, you should make sure that their bill is only for "Leasehold Service Charges" and/or "Leasehold Administration Charges", and that they are acting as agents for the management company.

(Some 'nasty' debt collectors trick people by asking you to pay them a fee for their services, which is not a "leasehold administration charge". So you can't challenge it at a tribunal.)


Maybe email the management company before paying, saying something like...

• "I will pay the debt collection company on the understanding that they are acting as your agent, and their bill is for Leasehold Service Charges and Leasehold Administration Charges only. I am paying under protest, and I plan to challenge these charges at a tribunal."

ciderboy2009

Wenpat said:

Thankyou for your reply . It was really helpful , I have emailed them but not received a response and I’m really worried about escalating costs.  So I’m thinking of paying the debt company as I am apparently unable to pay the management company direct now it’s been referred to the debt company.    Then I’m thinking of contacting the financial ombudsman .

Does your lease list email as an acceptable means of contact with them? 

If not then I would send them a letter rather than emailing them - particularly as you're complaining about contact methods

Wenpat

I have no lease from them only from the previous management company , they took over I understand that was in August of this year.  In my previous lease there is no mention of email and in fact says a demand shall be made in writing .

eddddy

Wenpat said:

I have no lease from them only from the previous management company , they took over I understand that was in August of this year.  In my previous lease there is no mention of email and in fact says a demand shall be made in writing .

Your lease doesn't change when a new management company is appointed. 

For example, if your lease is for 125 years - it's current wording will be valid for 125 years. (Unless you agree to change it, or the government introduce a law which overrides your lease.) It doesn't matter how many times the management company or freeholder change during that 125 years.

The management company can't 'make-up' rules for you to follow, the management company must follow the rules specified in your lease.


Based on what you've said so far, I think you have a fairly good case for challenging the debt collection fees - but it depends on precisely what else you and the freeholder have said to each other in the past.

Wenpat

Thankyou so much for all your help and taking the time to answer so concisely 
This forum is so useful for advice on matters when you feel a little out of your depth .

london21

Do contact them and set a direct debit or something going forward to avoid further situations like this.

They should have sent a letter or something advising you about the service charge.

Since you purchased, have you made any service charge payments?

Wenpat

No it was purchased at the end of June and absolutely realise that I should have chased it.
It’s also in my best interest to pay as want to keep the site and maintenance in good order.
I’ve tried to pay but now can only pay via the debt company I’ve also tried to set up a direct debit and haven’t been able to do this on the portal .

eddddy

Just to clarify - management companies aren't required to offer a direct debit service (unless it says so in the lease).


And just to double check - what date was the Service Charge payment due? (I'm guessing 1st September.)

Does you lease confirm that a Service Charge payment is due on that date?