Management Fees Arrears

jonnypb

I live on a housing estate where there always use to be a small management fee charge, roughly £12-15 a month.  This was paid for the first few years and then everyone stopped receiving a bill from the management firm, some people even chased them asking if there was still a fee and no one heard anything back.

Several years on and we have now received a bill, including around 5 years worth of arrears.  I have no issue in paying the fees for this year, but where do we stand legally when the management firm hasn't requested the fees for many years?  Can they charge for all the missed years, even though people have chased them in the past?  Or are they only allowed to go back so many years?  I would say that we haven't paid for around 7 years and the arrears add up to around 5 years worth of payments.

Thanks

MorningcoffeeIV

They can request the last 6 years so it seems they're giving you a discount, which is a result.

user1977

The debt won't have prescribed after only 5 years, so yes I don't see why it wouldn't be payable (assuming it's for stuff which you would have been liable for if billed at the time).

jonnypb

OK thanks.  I kind of thought that they could go back so many years.

The thing is we don't actually get anything from the management company, they don't maintain any shared areas, or carry out any maintenance tasks.  At one point they would trim a few bushes, but that stopped a long time ago.  It's impossible to speak to anyone as they never get back to you and people have even moved onto the estate in the last few years and they were never notified of any management fees that were payable.

Just all a bit strange why there's been a huge gap with the payments and now they're asking for the arrears and saying it has to all be paid within 4 months, which for some will be hard with the current cost of living.

eddddy

You might have grounds for challenging the bill - it depends on a number of factors.

Are you a tenant, leaseholder or freeholder?  What type of agreement did you sign that made you liable for these fees?


For example, if you're a leaseholder (in England/Wales) and the management fee is a service charge...

• There's an "18 month rule" which might be relevant (Section 20B of the Landlord and Tenant Act 1985)

• Service Charges must be "reasonable" - so they might not be able to charge £12 a month for doing nothing

Apart from that, time limits for enforcing debts are:

• Simple Contracts in England and Wales - 6 years

• Deeds in England and Wales - 12 years

The debt still exists after those 6 or 12 years, but it can't be enforced in court - so most people don't bother pursuing it. 


I believe that the situation is different in Scotland. Debts in Scotland become prescribed after 5 years - which means they don't exist any more (I think).

jonnypb

eddddy said:

You might have grounds for challenging the bill - it depends on a number of factors.

Are you a tenant, leaseholder or freeholder?  What type of agreement did you sign that made you liable for these fees?


For example, if you're a leaseholder (in England/Wales) and the management fee is a service charge...

• There's an "18 month rule" which might be relevant (Section 20B of the Landlord and Tenant Act 1985)

• Service Charges must be "reasonable" - so they might not be able to charge £12 a month for doing nothing

Apart from that, time limits for enforcing debts are:

• Simple Contracts in England and Wales - 6 years

• Deeds in England and Wales - 12 years

The debt still exists after those 6 or 12 years, but it can't be enforced in court - so most people don't bother pursuing it. 


I believe that the situation is different in Scotland. Debts in Scotland become prescribed after 5 years - which means they don't exist any more (I think).

I'll need to root out all the original paper work, but the houses are freehold and they're on a private road that the council didn't adopt when the developer built the estate.

There are apartments next to us (leasehold) that were converted by the same developer and who are managed by the same management firm, but have a much higher management fee as they get their windows cleaned, painted, shared areas maintained etc, whereas we get nothing done.

Sounds like someone at the management firm has made a mistake and not billed us for several years because on our side of the estate they have had zero costs/maintenance to pay out and not realised from their accounts that they haven't billed us.  That's another thing we use to get a yearly statement of what all the costs were, never had this for a number of years either.

eddddy

Unfortunately, freeholders have fewer rights/protections than leaseholders. (Although the government are talking about reforming things to give freeholders equal protection - but that won't help with the current bills.)


So you probably signed a deed when you bought the house, agreeing to pay management fees.

All you can do is read the deed to make sure it allows them to charge you the payment they're asking for (for example, even if they've done nothing for 7 years).


And if it's a deed, any debt is enforceable for 12 years - so in theory, they could ask you to pay for all 7 years of fees.

propertyrental

Have they actually been providing whatever service it is they are charging for?

jonnypb

They've not provided anything for a long time.  Any small patches of grass, or bushes that aren't on someone's property have been trimmed by the residents for a long time.  The only thing that they may argue is that salt bins are provided on the estate and there are a handful of street lights and they could say that they're maintained?  The monthly charge is minimal, so I'm not expecting a lot from them, but the fact that they're now demanding over £1000 in one go for previous years is annoying, especially when people have queried the management firm in previous years when we received no bills.

Equalee

Would assume there is a degree of reasonability if they haven't been requesting fees monthly for five plus years, it's well within your rights to come up with your own repayment plan. Even £100pm pay be a lot but certainly don't think they could get away with wanting it all in one go, especially after all this time?

propertyrental

jonnypb said:

They've not provided anything for a long time.  Any small patches of grass, or bushes that aren't on someone's property have been trimmed by the residents for a long time.  The only thing that they may argue is that salt bins are provided on the estate and there are a handful of street lights and they could say that they're maintained?  The monthly charge is minimal, so I'm not expecting a lot from them, but the fact that they're now demanding over £1000 in one go for previous years is annoying, especially when people have queried the management firm in previous years when we received no bills.

OK. And what services are they supposed to provide?

And have you seen or asked for annual accounts showing what they've paid out (eg electricity bills, gardeners etc)?

They are entitled to demand back-payments, so I'd advise paying to avoid interest charges etc, but 'under protest', and then query whether the payments are justifiable.