Over £4000 due to Guinness immediately?

MattMattMattUK

mathilde said:

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.

It is not about the £4,000 figure, it is more about the multiple of that, so say there are fifty leaseholders, how did they underestimate the cost by £200k, what process was followed, what assessments, what contractors, what rebates etc.

mathilde said:

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.

That is how it will be specified in your lease as it is in nearly every leasehold agreement

mathilde said:

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.

They are not regulated by the FCA, they are not a lender.

mathilde

I mean, yes they are but you can look it up in your own time.

MattMattMattUK

mathilde said:

I mean, yes they are but you can look it up in your own time.

I have, they are not.

gm0

Nearly all freehold/leasehold sites have had issues with construction costs.  Ukraine energy impact on direct and embedded and there are other sources of inflation specific to that sector.

Estimates are made about long term replacements and updates.  Lifts. Roofs. Boundaries. Private roads. Doors.  Windows.  As applicable to demised and communal maintenance (direct leaseholder or recharged). And those particular leases.

These are 20-50 year guesses.  With a CPI 3% or 5% or similar uplift - if there is one at all. 

Before placing a sinking fund levy and proposed cashflow on the table to save up X against a "known" liability of roughly Y.

And NOBODY commercial freeholders, agents, or SoF/RTM amateur setups - was planning for 100% inflation uplift in certain cost categories in as short a period as has now happened.

A contingency to allow for it to DOUBLE unexpectedy because inflation spike would require reserves against a cashflow plan that were also double. Which implies double the levy on the service charge. 

Affordability of service charge in flight is a planning consideration alongside "adequate" provision for various unknown risks and known replacement schedules.

Some places do decide context leases to do ZERO and just use section 20 for a nice big hit now and again on leaseholders for a big bill. 

Some cheeky chaps with leases - wilfully misinterpret what it is for and seek refunds upon lease assignment i.e. "it's for emergencies and not used so I want it back" - whereas in many leases it is for long term saving for long term expensive things - roofs, lifts etc.  And in other cases - the paper trail isn;'t perfect yet the intention (and liabilities are just as real).

You can discuss this with your corporate agent if you like

Most amateur setups have had to cut back planned maintenance and defer things and basically hack a the scope of works to reduce it alongside increasing levies.  To deal with the financial gap.   Plenty of leaseholder and resident groups are firmly in denial about the reality of this.  How could this possibly be allowed to happen etc. 

By not doubling the charge - just in case.  That's how

mathilde

MattMattMattUK said:

mathilde said:

I mean, yes they are but you can look it up in your own time.

I have, they are not.

What a baffling double-down for a matter of public record, but you do you.

mathilde

gm0 said:

These are 20-50 year guesses.  With a CPI 3% or 5% or similar uplift - if there is one at all. 
...
Some places do decide context leases to do ZERO and just use section 20 for a nice big hit now and again on leaseholders for a big bill. 

Some cheeky chaps with leases - wilfully misinterpret what it is for and seek refunds upon lease assignment i.e. "it's for emergencies and not used so I want it back" - whereas in many leases it is for long term saving for long term expensive things - roofs, lifts etc.  And in other cases - the paper trail isn;'t perfect yet the intention (and liabilities are just as real).
...
Plenty of leaseholder and resident groups are firmly in denial about the reality of this.  How could this possibly be allowed to happen etc. 

This is really interesting and helpful, thank you. I can tell you've worked in housing?

eddddy

mathilde said:

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.

Just to clarify - Guinness probably do some regulated financial activities (like loans, investments) in some part of their organisation. Those activities would be regulated by the FCA.

Their activities associated with providing housing and building management would not be regulated by the FCA.

• If you have a complaint about the quality of service relating to housing and building management, you could complain to the housing ombudsman.

• If you think that your service charge is 'unreasonable' (in a legal sense), you can challenge it at a tribunal

(If you had a complaint about their regulated financial activities - e.g. loans, investments, etc - you could complain to the Financial Ombudsman Service. But that doesn't seem to apply to you.)

gm0

@mathilde

I haven't worked in housing.  But I have lived in leasehold flats.  From new build (developer agent to get rid of) and in a 25 year old Share of Freehold setup.  And family have been in others - some with various construction issues that ran for a decade - such as a bad roof from new with bankrupt developer. Insurer litigation and other thorny issues.  So I have seen the processess in the wild.

The biggest issue as a prospective buyer - is the size of a site and its age.  And the nature of the liabilities - the things on site.  And whether any funding is in place.

If a new build warranty "holiday" on windows/roofs/lifts - has run on for 20-30 years.  And the amount saved is - nothing. For several hundred thousand of liabilities.  Saving for 30 years is more attractive than saving for just 10.  You need to know.  Before you buy it.

A house split into 2 or 3 is one scenario with not many to get along with.  Can still be tricky depending on the neighbours.  But the scale of liabilities is more like owning a house.  Stakes are more manageable.

Blocks of 100+  is quite another (but at least with enough units to find volunteer directors most of the time)

A block of ~10 - 20 can be a deeply difficult thing. With a couple of landlords (absent/overseas and not engaged) a couple of lock up and leave stake in the UK people; then a few elderly and infirm and a couple for sale - you can quickly be snookered on having ANYONE willing or able to do right to manage or SoF or even keep an eye on the freeholder/managing agent.  This is most vexing if you already have RTM or SoF but it is in disarray.

I have observed now in multiple communities - that only about 20% of leaseholders are willing to turn up to an AGM with the managing agent or RTM/SOF.  Or participate even at that level.  Let alone "help run the place".  Or contribute democratically to priority setting and planning.  Or scrutinise the competence and application of the managing agent appointed by the freeholder if that is the setup.

It is always amusing when someone new or a non-attender prior - gets aggressively demanding of neighbours as unpaid volunteers.  I have this SERIOUS problem etc.

Just agree with them that it is INDEED outrageous; that they should be SO treated.  And something SHOULD be done.  And they are most WELCOME to join the RTM/SoF board.  To be co-opted until elected at next AGM.  To take the LEAD on sorting this VERY thing out straight away.    They can join in.  Refuse and bog off angrily.  Or approach the matter with improved understanding of the context they are in.

It's amazing how busy/unavailable they become, how much less serious the issue is.  The sound of backpedalling is almost deafening sometimes.  You don't get to treat unpaid volunteer neighbours like servants.  Not on my watch. This is why I am actually temperamentally unsuited to it. 

Appetite to listen to endless moaning without telling people what you really think - is a major part of the job description for volunteer community RTM/SoF directors.

mathilde

Hi everyone, thanks for the thoughtful responses. To be fair to Guinness I should update that they responded to my complaint and arranged that I could pay the 4000 balance through a service charge increase over 2 years. That's a stretch but do-able. They apologised for saying it was "due immediately" instead of proactively making a payment arrangement, and they've raised it as a mgmt issue so it doesn't happen again. So crisis over!

GDB2222

Good result all round. Well done.