Housing Association Service Charges as a Homeowner

inwortle

Not sure if this is the right place for this - please direct me elsewhere if not! Thanks!

We bought our house (freehold) 5 years ago. When we did, we were aware that we were obliged to pay a monthly fee to the Housing Association who owned the flats and much of the estate that our house is part of. At the time it was less than £5 a month, so I didn't think much of it. Most of its relevance to us is to do with the communal car park right outside our house, which they own and maintain.

Fast forward to today, however, and I've recently received their latest recalculations, which puts the service charge at £38 a month. Which is extortionate! That is up from £20, which I was already unhappy about. And it's clear that they have wildly underestimated many costs. 'Grounds Maintenance: Responsive Works was estimated at £806 but actually cost over £14k!
As I say, of this, all we really benefit from is the car park, which as far as I can see is barely touched by them. There are communal spaces, but none that are related to our property that we use. And nothing that is worth almost £40 a month. 

I have complained about these price hikes in the past, and they have taken months to get back to me. And then they just explain unsatisfactorily what the service charges pay for and that we have to pay them. I'm currently trying to ascertain the nature of the agreement. We're definitely freehold. But according to my first correspondence with the Housing Association they 'hold an interest under the transfer agreement of [our] property'. It is referenced numerous times in the documents I have from our solicitor when we bought. But I can't find the agreement itself. I have contacted the solicitor about this.
Has anyone had a similar situation? Is there anything I can do about this? Is it worth withholding payment?
Any thoughts or advice welcome, thanks!

BonaDea

Whatever you do, don't withhold payment, because if you do they might be able to force forfeiture of your freehold.  Keep paying but look into your rights under the Leasehold and Freehold Reform Act.  

https://www.lease-advice.org/article/leasehold-and-freehold-reform-act-2024/#:~:text=The new powers also grant,property if they want to.

eddddy

The agreement (which you are having trouble finding) is likely to be your ongoing 'contract' with the Housing Association.

It should say what the Housing Association is required to do - for example, maintain the parking area, maintain the communal open spaces - and what percentage of the total cost you must pay.

So you can cross reference the things in that agreement with the costs on your bill - to make sure they're only charging you for the correct things.


Withholding payment generally isn't a good idea. The agreement is likely to allow the Housing Association to charge you 'Late Fees', Debt Collector's Fees, Solicitor's Fees, Court Costs, etc. (Which might amount to thousands.)

And if the Service Charge is defined in law as a Rentcharge, the Housing Association could take possession of your house, if you don't pay.

It might be better to pay the charge (under protest), and then challenge it afterwards.

inwortle said:

There are communal spaces, but none that are related to our property that we use. 

The legal position would be that, if you signed a 'contract' agreeing to contribute to the cost of maintaining the communal spaces - you have to pay, even if you choose not to use those communal spaces.

daveyjp

Unfortunately the time to check what costs you are contributing towards is before purchase.  You will be contracted to pay for whatever is listed in your agreement, whether you benefit or not.

The danger is with Housing Associations is their budgets are tight.  They don't charge open market rents and any property repairs they are responsible for have to also be paid from a limited budget as HA rents include all repairs.  If HA is struggling with budgets they may decide to allocate spending to different areas where the private contribution opportunity is higher.

A "responsive works" charge of £14,000 suggest something which wasn't planned for has needed repair or maintenance so I would certainly be querying what that charge is for.  If it appears to be a cost which could be expected its not a responsive work charge.