Confusion over financial offer from Property Ombudsman

john600602

Hi. I posted on here about 6 months ago regarding the management company of my flats.  To cut a long story short, they have no accounts from 2020/2021/2022, they could not provide the sinking fund statement, the landlord's address did not exist and the overall service was appalling as the building falls into neglect, whilst at the same time the service charge is going up every time.  Half the block (6 flats) signed as additional complainants and after 5 months the ombudsman yesterday found in our favour on every point, and suggested £700.  I have asked for clarification on two points and await their reply but if anyone can offer advice here...  firstly is the £700 each or between the six of us (I assume between us but I don't know).  Secondly, and I find this bizarre, although they found in our favour, nothing has been resolved.  They basically said "we haven't been able to get any accounts from them either, nor have we been able to confirm the sinking find is safe".  Not a single thing has been resolved.  Well surely they aren't leaving it at that?  They say they consider the matter closed if we accept the payment, so does that mean if we accept it we can't take it to first tier tribunal (or court for arguments sake)?  We are now in a position where it's almost certain the company is financially broke or corrupt, what happens now?  I thought the ombudsman had the power to stop them from trading (by removing them from their scheme?). 

NameUnavailable

It sounds like you have taken the wrong course of action and should have taken this to the FTT.

I guess you need to consider if £700 is adequate or not, if not you probably have to refuse it and take further action. If you have the support of half of the other leaseholders why not go for Right to Manage or even better, buy the freehold?

john600602

Thanks, quite possibly we have. So to confirm if we want to go to FTT we have to refuse the offer? As it stands we have no idea if the 30k or so in the sinking fund actually even exists and the ombudsman in that respect hasn't been able to help at all. I am only surprised if fraud is suspected (as this money is meant to be in a ringfenced account by law) that the ombudsman has not taken a more dim view of it or done anything more than to offer each flat just over 100 pounds to close the matter. I understand legally they have limited powers but this seems potentially ridiculous. The ombudsman is fully aware that we are owed back more than that for work that was paid for and never done.

john600602

We will be looking into rights to manage.

propertyrental

NameUnavailable said:

..... If you have the support of half of the other leaseholders why not go for Right to Manage or even better, buy the freehold?

One of these is clearly the solution.

https://www.lease-advice.org/fact-sheet/right-to-manage/

https://www.lease-advice.org/advice-guide/ce-getting-started/

eddddy

The Property Ombudsman deals with complaints about things like:

• Poor or incompetent service
• Rudeness or discourtesy
• Not explaining matters
• Not administering a transaction as efficiently as would be expected
• Avoidable delays
• Infringement of your legal rights
• Failure to follow the rules set for agents under any relevant Code of Practice and membership obligations
• An apparent breach of obligations
• Failure to follow proper procedures

So it sounds like you have been awarded £700 as compensation for poor service, delays, etc.

If you think you've been asked to pay unreasonable service charges, you should go to the First Tier Tribunal.

If you think the management company is incompetent, you and the other leaseholders might have 3 options:

• 1. Ask the Tribunal to appoint a new manager (You have to prove fault with the current management company)

• 2. Take over building management yourselves (You don't have to prove any fault with the current management company)

• 3. Maybe buy the freehold - it's called Collective enfranchisement

But option 3 will only work if there are 2 parties on your lease. If you have a tripartite lease (3 parties), option 3 won't work.




Edit to add...

Perhaps one approach you could try is to challenge your Service Charge bills at tribunal as being unreasonable, on the basis that...

It is not reasonable for you to pay the £x Service Charge, until the management company can provide accounts etc, to demonstrate that they are spending the money correctly.

john600602

Thank you all.