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Shared ownership rent incorrectly charged.

Hi all, I hope everyone is well.

I have a question that I am unable to find any way of answering at present and am hoping some one may be able to offer a little help with.

About 4 years ago I finally got on the property ladder with a local housing association by buying a 30% share of a property. This of course means I have a mortgage toward the 30% I bought and pay rent on the remaining 70%. This has been working well up until last week.

I received a letter from the housing association saying I was just short of £500 in arrears with my rent for the year April 2023 to March 2024. Apparently they had been undercharging me, but the only paperwork I have from them says my monthly rent is exactly what they have been taking via direct debit. They are now saying it is nearly £50 a month more than they have been charging and they want me to pay up.

Obviously the timing is bad as I had just got home from Christmas at my mums, but worse than that, I am getting married in March and have bills coming out of my ears, so it really couldn't have come at a worse time.

I have told them that this is their mistake and I have the direct debit payment schedule from them in writing, which I have paid without fail.They have of course offered to setup a payment schedule, which I agreed I would discuss with them, but I also told them that I would need to check if they are within their rights to renege on a written payment schedule (which I have). I also questioned why it has taken them 9 months to realise this mistake and pointed out that it puts me in a very difficult situation financially. All they did was flex their muscles and say they would escalate the situation if I didn't pay.

Is it acceptable that they sent paperwork saying I owe £x per month, which I have paid without fail, and then decide they should have charged £x + £50 per month?  Or can they only start charging the extra from the point where they actually issue notice?

It just seems rather one sided to me and at a time when I am already stretched to the limit financially. And while they have said it was their mistake, they have not made any apology, they are just acting in an aggressive manner with a very matter of fact attitude.

Any help or advice would be very gratefully received.

Comments

  • LightFlare
    LightFlare Posts: 403
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    It sounds as though they have made an error and  are offering a payment schedule.

    The question as always is -- if they had said they had overcharged you, would you expect them to pay you back

    A lot will depend on what any documentation/agreements you have actually say
  • Loafman
    Loafman Posts: 12
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    edited 2 January at 9:46PM
    Hi, thanks for the speedy reply.

    They have said that they can offer a payment schedule, which would be the only way I could afford to pay it. The issue there is that they want to rifle through my outgoings, spending habits, bank statements etc. in order to see how much THEY think I can afford. To be honest, I am a very private person and find this unacceptable. And as they have said, the alternative is that I pay it all in one go.. which has a certain whiff of coercion about it.

    The bigger issue is that they sent me my payment schedule in writing, which I budgeted around, but it seems they left off a huge increase in management fees on the service charge. To be honest, I see this increase as a sly work around by them as they were slapped down for trying to increase the rent by more than they were allowed to.

    This really puts me in a situation where they seem to be building a stranglehold over me and my finances. It wouldn't be so bad if they were at least a little apologetic and compassionate about it, but the sheer aggressive responses makes me want to tell them where to go.. probably a hang up from spending far too long being bullied as a kid until I found out I could fight like the Tasmanian devil, lol.

    I will probably make them an offer to clear the extra over a two year period, and tell them they are not welcome to assess my finances.. they need to take some responsibility as it is their mistake and it is putting me in a very difficult financial bind.
  • silvercar
    silvercar Posts: 46,778
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    edited 3 January at 9:06AM
    I’d want to check that it is legal to increase your rent without giving you appropriate notice, let alone implement a rent increase retrospectively.

    it seems there is legislation on this: here
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  • eddddy
    eddddy Posts: 16,156
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    edited 3 January at 9:32AM
    silvercar said:
    I’d want to check that it is legal to increase your rent without giving you appropriate notice, let alone implement a rent increase retrospectively.

    The OP probably needs to provide a lot more background info.

    For example, Housing Association shared ownership rent increases are typically linked to RPI or CPI (e.g. RPI + 0.5% or CPI + 1%).

    And the OP would have agreed to those RPI/CPI rent increases when they bought the property.



    So, for example, is the HA saying...
    • "Sorry, we calculated the RPI/CPI increase incorrectly last year - so we've undercharged you by £500"

    Or perhaps the HA is saying...
    • "We correctly told you that your rent was increasing to £x per year, but we made a mistake with calculating and/or collecting the monthly direct debits, so we've undercharged you by £500"

    Or something else?


    If the OP agreed to the rent increase at the time of purchase, they probably have little basis to challenge it now.


  • YoungBlueEyes
    YoungBlueEyes Posts: 3,828
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    Loafman said:

    <snip>
    The bigger issue is that they sent me my payment schedule in writing, which I budgeted around, but it seems they left off a huge increase in management fees on the service charge. To be honest, I see this increase as a sly work around by them as they were slapped down for trying to increase the rent by more than they were allowed to.

    <snip>
    Just for clarity - are they saying there's a shortfall in your rent, or a shortfall in your management fees/service charge?
    Just like humans, British cows moo in regional accents.
  • eddddy
    eddddy Posts: 16,156
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    Just another thought on this...
    Loafman said:

    They have said that they can offer a payment schedule, which would be the only way I could afford to pay it. The issue there is that they want to rifle through my outgoings, spending habits, bank statements etc. in order to see how much THEY think I can afford. 

    Is there any term in your contract about adding £x to your savings each month?

    I've come across Housing Association 'Rent to Buy' schemes where it's a condition of the tenancy that you must save £x per month towards purchasing a share of the property.

    I don't know if some Housing Association Shred Ownership contracts have similar conditions about saving towards staircasing.


    If yours does, you could be 'shooting yourself in the foot' (and admitting that you've breached the agreement) by saying you don't have £500 in savings to cover the underpayment.



  • Loafman
    Loafman Posts: 12
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    edited 9 February at 5:01PM
    I'd like to thank everyone for their advice and suggestions. An agreement has now been reached between myself and the housing association.

    Just to clarify, it seems that the letter I originally received in early 2023 with my monthly total did not include the service charge of nearly £50 pcm. The housing association had forgotten to add the service charge to the rent. And to be clear, these two charges are not listed separately on the payment schedule, just a monthly total labelled 'Monthly charge', hence why I had no idea the service charge was not included.

    I have been in constant contact with them since the original letter, and have been trying to sort out a payment schedule with them, but they have insisted that they need to do a financial assessment of my income and outgoings before they will even consider it. As this is their oversight, I said they are not welcome to assess my private finances, and told them I'll be the judge of what I can afford, and made an offer to pay them back over 24 months in equal instalments. Predictably, they ignored my offer time an time again. To make matters worse, over the last month or so, I have received another 4 letters saying that I have not made contact with them (which I have many times by phone and email) and they are going to escalate things if I don't pay the full amount  immediately.

    Anyway, long story short, a friend of a friend who works for a solicitors firm took a look at everything involved and wrote them a letter suggesting that they would do well to accept my offer, because there are grounds for me to press charges against them. She them went on to outline some of their failures.

    Lo and behold, shortly after that letter was sent, I received a phone call followed by an accompanying letter offering a sincere apology (which I accepted with a pinch of salt) and an acceptance of me paying them over 24 months, just like I had originally offered. So everything is now in hand.

    Thanks again for all the help and advice given on here and a big heads up to Selina who wrote the letter for me and wouldn't hear of taking any payment from me (so my good lady and I took her out for a few drinks instead, thankfully, she accepted).  :)
  • Loafman
    Loafman Posts: 12
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    Loafman said:

    <snip>
    The bigger issue is that they sent me my payment schedule in writing, which I budgeted around, but it seems they left off a huge increase in management fees on the service charge. To be honest, I see this increase as a sly work around by them as they were slapped down for trying to increase the rent by more than they were allowed to.

    <snip>
    Just for clarity - are they saying there's a shortfall in your rent, or a shortfall in your management fees/service charge?

    Sorry for the late reply. They had forgotten to add the service charge to my rent.
  • MattMattMattUK
    MattMattMattUK Posts: 8,296
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    Loafman said:
    I'd like to thank everyone for their advice and suggestions. An agreement has now been reached between myself and the housing association.

    Just to clarify, it seems that the letter I originally received in early 2023 with my monthly total did not include the service charge of nearly £50 pcm. The housing association had forgotten to add the service charge to the rent. Just for clarity, these two charges are not listed separately on the payment schedule, just a monthly total labelled 'Monthly charge', hence why I had no idea the service charge was not included.

    I have been in constant contact with them since the original letter, and have been trying to sort out a payment schedule with them, but they have insisted that they need to do a financial assessment of my income and outgoings before they will even consider it. As this is their oversight, I said they are not welcome to assess my private finances, and told them I'll be the judge of what I can afford, and made an offer to pay them back over 24 months in equal instalments. Predictably, they ignored my offer time an time again. To make matters worse, over the last month or so, I have received another 4 letters saying that I have not made contact with them (which I have many times by phone and email) and they are going to escalate things if I don't pay the full amount  immediately.

    Anyway, long story short, a friend of a friend who works for a solicitors firm took a look at everything involved and wrote them a letter suggesting that they would do well to accept my offer, because there are grounds for me to press charges against them. She them went on to outline some of their failures.

    Lo and behold, shortly after that letter was sent, I received a phone call followed by an accompanying letter offering a sincere apology (which I accepted with a pinch of salt) and an acceptance of me paying them over 24 months, just like I had originally offered. So everything is now in hand.

    Thanks again for all the help and advice given on here and a big heads up to Selina who wrote the letter for me and wouldn't hear of taking any payment from me (so my good lady and I took her out for a few drinks instead, thankfully, she accepted).  :)
    Out of interest, what do you mean by "press charges"? You are not a prosecuting body and it would be highly unlikely that they mean private prosecution, so what charges do you expect to have pressed?
  • Loafman
    Loafman Posts: 12
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    Loafman said:
    I'd like to thank everyone for their advice and suggestions. An agreement has now been reached between myself and the housing association.

    Just to clarify, it seems that the letter I originally received in early 2023 with my monthly total did not include the service charge of nearly £50 pcm. The housing association had forgotten to add the service charge to the rent. Just for clarity, these two charges are not listed separately on the payment schedule, just a monthly total labelled 'Monthly charge', hence why I had no idea the service charge was not included.

    I have been in constant contact with them since the original letter, and have been trying to sort out a payment schedule with them, but they have insisted that they need to do a financial assessment of my income and outgoings before they will even consider it. As this is their oversight, I said they are not welcome to assess my private finances, and told them I'll be the judge of what I can afford, and made an offer to pay them back over 24 months in equal instalments. Predictably, they ignored my offer time an time again. To make matters worse, over the last month or so, I have received another 4 letters saying that I have not made contact with them (which I have many times by phone and email) and they are going to escalate things if I don't pay the full amount  immediately.

    Anyway, long story short, a friend of a friend who works for a solicitors firm took a look at everything involved and wrote them a letter suggesting that they would do well to accept my offer, because there are grounds for me to press charges against them. She them went on to outline some of their failures.

    Lo and behold, shortly after that letter was sent, I received a phone call followed by an accompanying letter offering a sincere apology (which I accepted with a pinch of salt) and an acceptance of me paying them over 24 months, just like I had originally offered. So everything is now in hand.

    Thanks again for all the help and advice given on here and a big heads up to Selina who wrote the letter for me and wouldn't hear of taking any payment from me (so my good lady and I took her out for a few drinks instead, thankfully, she accepted).  :)
    Out of interest, what do you mean by "press charges"? You are not a prosecuting body and it would be highly unlikely that they mean private prosecution, so what charges do you expect to have pressed?

    I guess I worded it wrong, I'm no legal eagle as you can probably tell. She suggested that she believed I may have grounds to sue them for their failings.
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