Service charge late payment passed to debt collectors

petit_lapin

eddddy said:

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.)

Thanks for this. The letter from the debt collection company (PDC) says 
‘we have been instructed to recover the sum of £543.25 which includes our costs of £240. Under the terms of your lease/transfer this sum is due in full and we request you remedy the breach of contract’

It then goes on to say that all communication must be with PDC and not RMG who are the management company (although from some research this weekend these 2 companies seem very closely linked). 

The back page details the breakdown of the costs. 

There is a £40 reminder fee, a £240 PDC instruction fee and £90 client admin fee 

I had already paid the outstanding service charge to RMG before I received the letter from
PDC. I have since paid the £40 and £90 to RMG via BACS to clear my account to 0 and my plan was to write to them today to state I had paid  those amounts in protest and ask where it was stipulated in my lease clauses.  But then I was unsure whether to call PDC and pay the £240 to them or not just to get rid of it. It’s sending my anxiety through the roof!!! 

eddddy

petit_lapin said:

The letter from the debt collection company (PDC) says 

‘we have been instructed to recover the sum of £543.25 which includes our costs of £240. Under the terms of your lease/transfer this sum is due in full and we request you remedy the breach of contract’

As a starting point, to be a valid Service Charge Demand, the letter must include:

• Your Landlord's or the Management Company's full name and address
• A copy of a document/text called "SERVICE CHARGES – SUMMARY OF TENANTS’ RIGHTS AND OBLIGATIONS"

If it doesn't include those things, it's not a valid service charge demand, so you don't have to pay it. (But they can put that right by sending the letter again, and including those things. So maybe don't mention this yet.)

See: section 4.1 here: https://www.lease-advice.org/advice-guide/service-charges-other-issues/

If the £40 and £90 fee have already appeared on valid service charge demands, then they have already been correctly demanded. (And as I say, the £240 fee might be correctly demanded in a future bill.)


So as I said, the starting point is to check that the £240 is a "Leasehold Administration Charge". You can add an extra note saying: "Please confirm which clause in the lease allows you to charge an Administration Charge of £240".



It's usually best to pay the charges (under protest), because if you challenge them at tribunal and win, you'll get the payments back. But if you lose at tribunal, you just have to accept that you've 'lost' your £240 and £90.

But if you don't pay, they'll probably add more debt collection fees, solicitors fees etc. If you win at tribunal - that's great, you don't have to pay any of them. But if you lose, you'll have to pay £240 + £90 + more debt collection fees + solicitors fees.

So you reduce your potential losses by paying under protest now.

petit_lapin

Thanks for this. Will pay everything in full today and then challenge. 

I have checked my invoices on line and the £40 and £90 have not been included on any of them that have the  "SERVICE CHARGES – SUMMARY OF TENANTS’ RIGHTS AND OBLIGATIONS" attached. 

Will query on the lease as I can’t find anything in there pertaining to charges being added apart from interest to late payments which they haven’t actually added. 

petit_lapin

Posting an update on how things are going. Called PDC up to pay their fee. Told them the money had been paid to RMG and that when I had an online chat with RMG they said the money would be allocated to my account which it did a day later and my account is up to date. They didn’t ask for the payment of their fees and asked me to email them the transcripts of my chat with RMG which I did. No reply followed so I emailed again 2 days later to chase up. Again no reply so I emailed a third time. 

Yesterday I get another threatening letter in the post dated 9th march so a day after my 3rd email to them saying that no payment or correspondence has been received from me and adding more money to the total they say is outstanding. There was a different email address on the letter so I emailed again cc’ing the new email address, included the thread of previous comms and asked them to confirm the matter is closed and to stop sending me threatening mail.