Service Charge Help / Advice

Marky4040

Hi All

A person has died in our block (1 of 20 flats), has no heirs and the flat has been empty for some time, looks like going to be claimed by the Crown.

Management company are still billing all of us for this flats service charges. Can they do this? Seems unfair because they are taking the unpaid service charges for this empty flat out of our reserve fund?

Any advice on how to resolve this would be appreciated.

silvercar

This could be considered a debt against that flat, so when it is sold the service charge owing becomes due and that repays the reserve fund.

Flugelhorn

https://forums.moneysavingexpert.com/discussion/comment/81951540#Comment_81951540

I have seen that happen before - the costs of running the block continue and they have to get the money from somewhere - but eventually it will be paid back when the place is sold

daveyjp

As with all queries such as this the starting point is the lease. What does it say about service charge responsibilities and do the clauses provide for residents to be charged extra to cover costs for vacant units?

eddddy

How long have the service charges remaind unpaid?

Is it a 'proper' professional management company, or an amateur company run by leaseholders or similar?

Who is the freeholder?

On what basis are the other leaseholders paying the service charge for the empty flat? Is it being treated as though you are making a loan to the management company, and once the management company get the service charges for the empty flat, they will repay the loan?

In general, if a leaseholder doesn't pay their service charges, ultimately the freeholder can go to court to forfeit (or terminate) the lease and take possession of the flat.

Then the freeholder can create a new lease for the flat, and sell the flat. The freeholder can use some of the sale money to pay off the outstanding service charge - and keep the rest of the sale money as a free bonus.

bouicca21

A while ago we had a problem with an obnoxious neighbour who failed to pay his share of the service charge. How I wish the rest of us could have divvied up what was owing and paid our share until it could be recouped. The result was that things simply did not get done, as there was no money to pay the bills.

The property manager’s defence was that the leasehold tribunal was reluctant to order forfeiture and that our leases, which are old and in need of modernising, do not contain a clause about forcing the recalcitrant one to pay legal fees, so we would all be paying a share of the legal fees. Eventually a letter before action threatening the small claims court got him to pay up.

He continues to be obnoxious and uncooperative, but that creates different issues.