Over £4000 due to Guinness immediately?

mathilde

I mean, they'll be getting instalments from me so I'm fine. What I'm worried about is that there are probably neighbours who were spooked by the PAY £4000 IMMEDIATELY and are draining their emergency funds.

pinkshoes

mathilde said:

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.

Well the IF clause is not definitive.

If they've not made any clear statement about an increase then they can't just demand £4k. But as the money is owed then an offer of installments is fair.

If anyone is daft enough go pay upfront then that's unfortunate,  but then again, some prefer to just pay what is owed.

mathilde

True, but the letter does literally say "pay immediately". That's not hyperbole on my part. I think that's not on. 

eddddy

If I'm reading correctly... you agree that the section 20 consultation was carried out correctly - so you don't want to challenge that.


In simple terms, I suspect that

• your lease (and the law) says that the £4000 is payable immediately

• your lease (and the law) did not require the freeholder to increase your 2023 service charge to cover these costs

But your freeholder gave you poor quality of service, because they misled you about how the work would be paid for.

If that's the case, maybe your options include:

• I'm not sure you have much of a legal case for not paying the £4000. But you can try challenging it at a tribunal if you want.

• You can complain to a relevant ombudsman about the poor/incorrect communication and poor quality of service - you might be awarded a  small sum for the inconvenience

• You can ask your freeholder for a "goodwill gesture", because of their poor quality of service - e.g. the option to pay in installments

mathilde

I'm definitely going to pay, but in small installments.  

gm0

Over the long period this has gone on.  The rest of the annual operating budget has been estimated and executed multiple times.  The day to day operating budget will like most sites have been subject to rampant inflation.  Energy costs.  Construction costs generally and energy embedded materals.  Insurance costs.  I would be looking a any statement of charges and accounts more generally to see if the site has been managing its "deficit" and budget uplift properly year to year.  (Balance between a budget set and payments requested vs what actually happens in year = shortfall = drawdown to reserves/sinking fund. 

This is never and *cannot* be ever be penny exact set and charged in anticipation - as things happen - emergency callouts  (gates/lifts/fix on fail repairs),  energy costs (as with Ukraine war effect a year or three back).   Insurance claims and premium impact. 

It would not be surprising if two things have hit both hit the "allocation from" sinking fund.  Deficts caused by excess actuals vs planned service charges in year.  Re-estimating current planned maintenance more realistically.   Leaving less "over" to fill a whole for a declared section 20 like this example.

A sinking fund should be set against an estimate of future long term liabilities.  Most such estimating has been blown away by events in the past 5 years.  So rescoping.  Or deferral.  Or uplifts to annual charges are all happening all over the place.  As the situation is most disagreeable for all involved.

mathilde

Just spent over an hour on hold/talking with Guinness and finally convinced them to let me pay it over two years. They pushed several times for me to pay it back within a year, which I couldn't afford. The last man I spoke with did concede that the situation wasn't my fault.

I'm still tempted to pay it out of my emergency fund but I need that fund for actual emergencies. 

Exodi

m0bov said:

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

*sigh*. You can't keep everyone happy.

My colleague is a director of the management company, and it is a miserable thankless job. All the residents have strong differing views on virtually everything. Personally I've no idea why anyone would volunteer to do it (hence why many don't and a non-local company is used).

You may suggest the directors were negligent by not whacking up everyone's service charge to the moon to amass a sinking fund the Crown would be envious of (to cover any eventuality) but you can guarantee that many residents would take issue with being fleeced into poverty to achieve it, and rightly so.

My colleague already faces complaints about the size of the sinking fund (particularly from people moving out and suggesting they should be entitled to a refund from it), and theirs is about 1/2th of what the OP's was (for a similar size development).

mathilde said:

Just spent over an hour on hold/talking with Guinness and finally convinced them to let me pay it over two years. They pushed several times for me to pay it back within a year, which I couldn't afford. The last man I spoke with did concede that the situation wasn't my fault.

I'm still tempted to pay it out of my emergency fund but I need that fund for actual emergencies. 

Sounds like a good outcome and it's good you're also reasonable with this.

If they've agreed a plan over 2 years, no reason to use your emergency fund, keep earning 5+% on it!

mathilde

It's an okay outcome but it took all my negotiating power. They repeatedly pushed me to pay at least a partial amount up front, or to up the service charge so that it would be paid over 12 months, which I couldn't afford. The first man I spoke to actually hung up when I suggested a lower payment (after sarcastically asking me whether that was reasonable). 

So Guinness have not covered themselves in glory but it's resolved.

mathilde

For what it's worth I've put in a formal complaint to find out

1. How the heck the estimated service charge went from 0 to £4000. II think thats a reasonable thing for them to explain.

2. How they're concluding that it's "due immediately ". 

3. Why it was then immediately classed as an "outstanding rent (sic) balance" for which I received aggressive texts and repeated pushes to pay off quickly.

For an organisation as large as Guinness, which not incidentally has an in-house legal team, I think it's reasonable of them to follow FCA conduct rules.