Service charge late payment passed to debt collectors

petit_lapin

I have been late paying my estate fees for my house this year. Absolutely my fault for not being organised. I paid them 2 days ago and this morning have had a letter from a debt collection agency arrive demanding another £240 and the late payment for the service charge. It says I must pay them and not the management company. 

I contacted the management company this morning and they said my payment has not appeared in their account although it has left my bank so I have to pay the debt collection company as it’s no longer their issue. 

They have also added another £90 to my account for passing the debt to the collection agency. What do I do now? I’m assuming the payment will soon show on my account but what about the extra £90 admin fee and the £240 for the debt collection agency? Is there anything I can do about those? 

I am panicking and have been shaking all day since I opened the letter. 

Thanks 

EssexHebridean

Is the course of action clearly set out in the terms from the management company or in the lease if it is a leasehold house?

theartfullodger

In your shoes I would pay what is being requested "under protest", stating you will dispute the amount. Make sure that is in writing/email.

That way no further fines/penalties.  Then read all your paperwork & work out if they have the right, or not.

Good luck!

petit_lapin

EssexHebridean said:

Is the course of action clearly set out in the terms from the management company or in the lease if it is a leasehold house?

I believe this is the applicable clause in the lease 

EssexHebridean

How late were you in paying? That clause allows them to charge the interest as stated, but not to add other fees. That’s not to say there isn’t anything else in the lease that does make allowance for that of course so check right through. If it’s not contained in the lease though, they cannot charge it.

Initially, a polite enquiry asking them to clarify where in the Lease the provision to levy charges as they have might be a good start.

petit_lapin

I’m 2 months late in paying. We’ve also had the 10 year leasehold increase this year which they’ve also decided to backdate to last year which has made money tight to pay anything each month. I checked my account on line (didn’t know it existed til I signed up today) last year I paid on the 15th February. This year by that time there were 2 admin charges added. 

EssexHebridean

Check the lease again - right through, read it, don’t skim! Then if you can’t find anything that allows for the charges, challenge as suggested.  

petit_lapin

EssexHebridean said:

Check the lease again - right through, read it, don’t skim! Then if you can’t find anything that allows for the charges, challenge as suggested.  

I have checked through. The only other term that deals with late payment says that the company (in the case of the contract that is Taylor Wimpey) can renter the property. 
the other problem I have now is payment to the debt collection company. Their letter is 10 days from postage date tomorrow even though I only received it yesterday and called them twice and was cut off twice after being on hold for 30 minutes each time. They add more charges 10 days after the date of the letter. There’s no other way to pay than by calling them and they are closed until Monday. 😫
Should I be dealing with them or with the management company? 

Norman_Castle

Keep a diary noting all attempted contact with the management and debt collectors. Its unfair to send letters late and make payment or contact difficult. Have evidence to show your actions to resolve this.

chanz4

depends what is stated in the agreement, also fees must be inline

eddddy

Just to clarify - I assume you own a leasehold house, and this all relates to that lease. If so...


I think the key questions include:

• Is the letter from the debt collection company a legitimate "Service Charge Demand" or something else

• Is the £240 fee a "Leasehold Administration Charge" or something else

If it's a legitimate "Service Charge Demand" and the £240 is a legitimate "Leasehold Administration Charge" - the standard advice is to pay it under protest, and challenge it at a tribunal.

(Because if you don't pay, the freeholders might be able to do draconian things.)

In your position, I'd be tempted to write to the management company saying something like:

Please confirm that the letter I have received from the Debt Collection Company is a Service Charge Demand, as defined in the relevant legislation, which they have submitted as your agent.

Please also confirm that the £90 fee and £240 fees demanded by the Debt Collection Company are Administration Charges, as defined in The Administration Charges (Summary of Rights and Obligations) (England) Regulations 2007

As soon as you confirm both the above points, I plan to pay the service charge demand under protest, and challenge the £90 fee and £240 fee at a tribunal.

Please confirm these points as soon as possible to avoid any delay in payment.

Alternatively, should you wish to reconsider and/or cancel the £90 and £240 fee, please let me know.

Because some dodgy debt collection companies send slightly misleading letters which essentially something like:

Please pay both of the following:

• £x Overdue Service Charge 
• £240 Debt Collection fee 

The overdue service charge is a legally enforceable debt owed to the management company
But the debt collection fee is the debt collection company inviting you to agree to pay them a fee for their services. (And you can refuse their invitation.)