Over £4000 due to Guinness immediately?

GDB2222

Just to be contrary, some of your neighbours would have been up in arms if they had been asked in 2023 to start paying £250 a month for work that wasn’t going to start until 2024. Nobody likes paying for this kind of thing, unfortunately. 

m0bov

The work shouldn't have gone over the amount specified with additional consultation.

mathilde

GDB2222 said:

Just to be contrary, some of your neighbours would have been up in arms if they had been asked in 2023 to start paying £250 a month for work that wasn’t going to start until 2024. Nobody likes paying for this kind of thing, unfortunately. 

That's a good point, however they estimated zero for whatever reason. Then waited two years to say, oops, sinking fund didn't cover.

mathilde

m0bov said:

The work shouldn't have gone over the amount specified with additional consultation.

It only went over by 9k. That's not what they're asking for. They're suddenly now saying that the sinking fund didn't cover sufficiently. But I appreciate your point.

GDB2222

mathilde said:

m0bov said:

The work shouldn't have gone over the amount specified with additional consultation.

It only went over by 9k. That's not what they're asking for. They're suddenly now saying that the sinking fund didn't cover sufficiently. But I appreciate your point.

That does sound like a tremendous mess up, and you are entitled to an explanation. I don’t think the mess up changes your overall liability, but it seems like a good argument for allowing leaseholders to pay in instalments. 

m0bov

If the money wasn't there sounds like a claim on the directors liability insurance for negligence.

HampshireH

m0bov said:

If the money wasn't there sounds like a claim on the directors liability insurance for negligence.

Not at all.

Sinking funds won't always cover works due. By their very nature works may need doing which were unexpected.  Not many leases would have terms which explicitly state all works will be covered by the sinking fund.

Many don't even mention sinking funds only service charges or payment for works

mathilde

GDB2222 said:

mathilde said:

m0bov said:

The work shouldn't have gone over the amount specified with additional consultation.

It only went over by 9k. That's not what they're asking for. They're suddenly now saying that the sinking fund didn't cover sufficiently. But I appreciate your point.

That does sound like a tremendous mess up, and you are entitled to an explanation. I don’t think the mess up changes your overall liability, but it seems like a good argument for allowing leaseholders to pay in instalments. 

You're right, a tremendous mess up. I mean the letter even said i had to pay the £4000 "immediately".  That's not even an invoice. Doesn't Guinness have a legal team?

I've calmed down now. I'm certainly going to pay in instalments. This isn't one for the emergency fund because there's no emergency.

pinkshoes

mathilde said:

I've finished work now and fished out the consultation.

The total overall amount for the works was correctly stated, but then they said, in essence, 'We're going to pay it from the sinking fund, and then raise your service charges to pay for the rest'. They didn't specify how much would come from the sinking fund.

Evidently they forecast that the service charge we'd all have to pay for line line item of Major Works for 2023-24 would be £0. 

The sinking fund only paid some of the costs, so there was a leftover amount of £129,000 to be paid from services charges.

So they were wrong to estimate £0 for 23-24. The service charge for that line item should have been £129,000 for all the residents. £4000 per unit.

We just found all this out today. Random letter. Oopsie, pay us £4000 right now!

Had they raised the service charge correctly back in 2023, it would have been £166 per month increase and all paid off by now. Totally reasonable.

Wow, that's quite a financial f*ck up they made!!!

Ok so the works was done near enough on  budget but they didn't do the finances properly so used the sink fund then forgot to account for the additional money from increased rent. Ohps.

You'll have to look at the paperwork at the time. Did you get anything saying the rent will be increasing £160 odd a month to cover the extra starting from X date? Their argument will then be that people were notified of the increase so should have put the money aside when it wasn't taken. In which case they probably can ask for it all.

I'd be wanting to look through the accounts for the block and have a meeting with the managing company looking at future needs for the block, approximate costs and making sure there is sufficient money available. 

mathilde

That's a good observation. At the time the message was "It'll be paid from sinking fund and if needed we'll increase your service charges."

Then earlier this year we got correspondence saying, "Okay we're doing the 2023-24 accounts now and we'll let you know whether you overpaid or underpaid your services charges."

I was thinking, a few hundred pounds or thereabouts.