My aunt's maintenance bill is going up by £6,000 in December.

Civic2056

eddddy said:

Civic2056 said:

She has not recieved any notification, I'm still unsure of how her neighbour found out the cost. 

I think you need to find out some more concrete facts before anyone can give you useful advice. I guess it's possible that the neighbour completely misunderstood whatever they were reading.

Civic2056 said:

Interestingly, a shop owner took the company to court over the unaffordability of a £7650 service charge. It was issued without a S20 notice and was deemed unaffordable, so the claimant only had to pay £2750 for the repair.  https://assets.publishing.service.gov.uk/media/615448e8e90e077a291f392d/Decision_New_Kings_Road_.pdf

It looks like you've mis-described (or misunderstood) that tribunal case. My reading of the case is:

6 leaseholders of flats challenged their Service Charges on the basis the the charges were not reasonable - you can't challenge Service Charges on the basis that they are not affordable.

Reasonable means things like:

• The work done was actually required (e.g. it wasn't a charge for unnecessary work)
• It was a fair price for doing the work (e.g. they didn't use overpriced contractors to do the work)
• The work done was the freeholder's responsibility according to the lease
• The freeholder has followed the law (e.g. they've correctly done a Section 20 consultation, if required)

Just to emphasise - you can't challenge a Service Charge simply because the leaseholders can't afford it, or it seems like it's a lot of money, or the a leaseholder is living on a pension, or it's more than last year etc.


However, the tribunal case seems to show that the managing agents have done things wrongly in the past, so it's possible that they're continuing to do things wrongly.


But on the other hand - it sounds like they've lost thousands of pounds at that tribunal case, so they'll probably be super-careful, to avoid losing any more.




Edit to add...

Civic2056 said:

So either they will issue the S20 in December or just spring the cost on her, in which case for the latter (if it is £6K per resident), they will have broken the law. Which doesn't surprise me

Just to clarify - you seem to be to be talking about increasing the estimated annual service charge.

A Section 20 consultation isn't required to increase the estimated annual service charge.

A Section 20 consultation might be required for each piece of major work - like repairing the roof, or repainting all the external woodwork.

If the annual service charge estimate includes costs for any pieces of work like that - some Section 20 consultations might need to be done before each piece of work starts.

I would assume if it was going up by £6K per resident (around 8 residents, so £48K) it would be pretty major. My aunt suspects it is the brickwork. I have no clue about how much it would cost to do that, and whether it is essential. But my aunt and her neighbour plan to hire an independent surveyor to quote the cost, and if it is cheaper tell the management company to use them instead etc. 

Yes by unaffordability i was inffering to a gross overestimate of the cost when far cheaper alternatives were avaliable that could provide the same service.

Theoretically speaking, if every tenant refused to pay, would the management company (obviously within their rights to) actually evict all the residents, or given the fact no-one can get a mortage, afford a property, and afford such steep costs to pay for the maintenance etc, thus meaning there would be little to no new tenants, effectively force the company to stop the charge or reduce it considerably? This will be the if all else fails option I think. 

eddddy

Civic2056 said:

Theoretically speaking, if every tenant refused to pay, would the management company (obviously within their rights to) actually evict all the residents, or given the fact no-one can get a mortage, afford a property, and afford such steep costs to pay for the maintenance etc, thus meaning there would be little to no new tenants, effectively force the company to stop the charge or reduce it considerably? This will be the if all else fails option I think. 

No.  You say that your Aunt bought the leasehold flat. Presumably she paid hundreds of thousands of pounds for it.

If she doesn't pay her Service Charge - ultimately she could lose the flat - so she'll lose hundreds of thousands of pounds.


Let's say the flat is worth £250k. Even if the freeholder has to sell it at a bargain basement price - say £200k or £150k or even £100k - that's plenty to cover the outstanding service charges. And the freeholder would be left with a huge profit.

(And your Aunt would be left homeless with no money.)

Jonboy_1984

Civic2056 said:

But my aunt and her neighbour plan to hire an independent surveyor to quote the cost, and if it is cheaper tell the management company to use them instead etc. 

Yes by unaffordability i was inffering to a gross overestimate of the cost when far cheaper alternatives were avaliable that could provide the same service.

If you read the earlier link on the section 20 process, one of the earlier stages of consultation should be asking leaseholders to propose contractors to be approached for quotes.

Note the management company don’t HAVE to go with the lowest price, but should be able to justify why they have gone with the contractor appointed later.

NameUnavailable

Can you post the link to this information about the 6K charges on the agents website?

Sarah1Mitty2

Devongardener said:

I suggest that you look at the management company website yourself to check the facts.  It’s unlikely that the charge would be increased from next month with no prior notification.

Yes that seems unlikely .

eddddy

Devongardener said:

I suggest that you look at the management company website yourself to check the facts.  It’s unlikely that the charge would be increased from next month with no prior notification.

Sarah1Mitty2 said:

Devongardener said:

I suggest that you look at the management company website yourself to check the facts.  It’s unlikely that the charge would be increased from next month with no prior notification.

Yes that seems unlikely .

There's not enough information to assume that.

If this is an increase in the estimated annual service charge, there's no requirement to notify that in advance.

The OP really needs to provide more info. As it stands, people are making wild guesses about what the Aunt's neighbour might have read on a website. As a result people are giving lots of advice which might turn out to be wrong.


And the OP's plan to deal with the situation by withholding service charges is almost certainly a very bad idea.

GDB2222

Civic2056 said:

eddddy said:

Civic2056 said:

She has not recieved any notification, I'm still unsure of how her neighbour found out the cost. 

I think you need to find out some more concrete facts before anyone can give you useful advice. I guess it's possible that the neighbour completely misunderstood whatever they were reading.

Civic2056 said:

Interestingly, a shop owner took the company to court over the unaffordability of a £7650 service charge. It was issued without a S20 notice and was deemed unaffordable, so the claimant only had to pay £2750 for the repair.  https://assets.publishing.service.gov.uk/media/615448e8e90e077a291f392d/Decision_New_Kings_Road_.pdf

It looks like you've mis-described (or misunderstood) that tribunal case. My reading of the case is:

6 leaseholders of flats challenged their Service Charges on the basis the the charges were not reasonable - you can't challenge Service Charges on the basis that they are not affordable.

Reasonable means things like:

• The work done was actually required (e.g. it wasn't a charge for unnecessary work)
• It was a fair price for doing the work (e.g. they didn't use overpriced contractors to do the work)
• The work done was the freeholder's responsibility according to the lease
• The freeholder has followed the law (e.g. they've correctly done a Section 20 consultation, if required)

Just to emphasise - you can't challenge a Service Charge simply because the leaseholders can't afford it, or it seems like it's a lot of money, or the a leaseholder is living on a pension, or it's more than last year etc.


However, the tribunal case seems to show that the managing agents have done things wrongly in the past, so it's possible that they're continuing to do things wrongly.


But on the other hand - it sounds like they've lost thousands of pounds at that tribunal case, so they'll probably be super-careful, to avoid losing any more.




Edit to add...

Civic2056 said:

So either they will issue the S20 in December or just spring the cost on her, in which case for the latter (if it is £6K per resident), they will have broken the law. Which doesn't surprise me

Just to clarify - you seem to be to be talking about increasing the estimated annual service charge.

A Section 20 consultation isn't required to increase the estimated annual service charge.

A Section 20 consultation might be required for each piece of major work - like repairing the roof, or repainting all the external woodwork.

If the annual service charge estimate includes costs for any pieces of work like that - some Section 20 consultations might need to be done before each piece of work starts.

I would assume if it was going up by £6K per resident (around 8 residents, so £48K) it would be pretty major. My aunt suspects it is the brickwork. I have no clue about how much it would cost to do that, and whether it is essential. But my aunt and her neighbour plan to hire an independent surveyor to quote the cost, and if it is cheaper tell the management company to use them instead etc. 

Yes by unaffordability i was inffering to a gross overestimate of the cost when far cheaper alternatives were avaliable that could provide the same service.

Theoretically speaking, if every tenant refused to pay, would the management company (obviously within their rights to) actually evict all the residents, or given the fact no-one can get a mortage, afford a property, and afford such steep costs to pay for the maintenance etc, thus meaning there would be little to no new tenants, effectively force the company to stop the charge or reduce it considerably? This will be the if all else fails option I think. 

I hope that you get more information, in order to help your aunt. 

diystarter7

I agree with almost everything posted here.
I've said it before if you buying an apartment, please, please be aware that service charges may skyrocket and you may have problems selling the property at the expected price due to high service charges.
Service charges can easily shoot up, especially for one off repairs - replacement roof/windows and or lift or electric gates continuously playing up

When buying an apartment, check the service charge history and any works due or you feel may be dues and past history is no guarantee of the future.

GDB2222

The thing is, even owning a freehold house doesn’t make the owner immune from urgent maintenance bills. Our boiler broke down and it cost over £3k to replace it. We had a small leak, and the plumber was £200+ and the making good could be £500. It’s just ongoing. 

spoovy

A bit late now granted, but aren't there insurance products available for leaseholders in such circumstances?  Owning a freehold house wouldn't be much fun without buildings insurance.