Chased for flat service charge when already paid

ripofflondon

Hi all

I am being sued for payment of service charge on a BTL flat even though I have already paid it and then some. 

I own a mortgaged BTL flat, no 3 in a block of 10 (named ABC Manor for these purposes), that I have rented out since buying it in 2017.  I am a 1/10th shareholder in the ABC Manor Management Company (AMC) and I also own 1/10th of the freehold, though I have never been given any paperwork to either effect. 

Originally the block management was done by one of the leaseholders as sole director of AMC.  He stepped down in late 2023 and then 2 or 3 of the other leaseholders replaced him as directors and decided in early 2024 to hand day-to-day management of the block to an external company (and pay them handsomely for the privilege of doing so).  There were problems with this external management company (who have now gone bust) and in early 2025 another external management company (named XYZ for these purposes) was appointed. 

Ever since XYZ have been appointed, I have been regularly paying the ground rent and service charge monthly all that time, from my current a/c into XYZ’s bank a/c dedicated to ABC Manor and quoting flat 3 as a reference no. 

I got into arrears earlier this year in the sense that on 1 June XYZ suddenly demanded payment of the monthly service charge in full and in advance for the next 6 months from 1 July; although I had paid it in full up to the date the next 6 months was due on 1 July, I had not paid the full advance amount by that date. 

XYZ sent me threatening letters and emails after 1 July and I told them that I had set up a monthly payment plan (for which XYZ charged me interest) and that they could sue me if they wished but the ££ would likely be already paid off before the matter got to court.  

Following this I had my first LBA in mid-July from an external law firm (named Ambulancechasers for these purposes) informing me that, unless I paid the full amount owing of £2900 by 4pm on 29th July 2026, they would launch County Court proceedings against me.  This letter informed me that as soon as I received it I was already in debt to Ambulancechasers for £500 + VAT for the “Issue of Letter Before Action & associated costs.”  It further informed me that “Payment must be made to us. If you attempt to make payment directly to our client, by bank transfer or otherwise, this payment will be forwarded to us and paid against legal fees in the first instance before the arrears. Further, in the event of a direct payment to our client our additional legal costs of £150 plus VAT will be charged to cover our correspondence with our client and you. This charge will apply irrespective of the amount of your payment".

During this time (from 1 June) I had been making sporadic payments of odd amounts at irregular intervals to the Alverton Manor bank a/c from my same current a/c I had used before, without quoting flat 3 as a ref no and without telling Belmont; nevertheless by 29 July I had paid to XYZ all the £2900 demanded plus a further approx £100. 

On 27 July I received the following: “We note that you have made a direct payment to our client in the sum of £87.00. Please be aware that this payment has not been allocated, as this does not cover the full balance outstanding.  As you have made a direct payment to our client whilst we have been instructed, further legal costs in the sum of £150+VAT have been incurred”

I had paid to AYZ not Ambulancechasers because:

a) my dealings are with XYZ not Ambulancechasers and I was not about to blindly obey an order from an entity I had neither ever heard of nor entered any contractual relationship with ie Ambulancechasers;

b) Ambulancechasers knowing about, but choosing to not take a/c of, my £87.00 payment (plus all the others) proves that they are acting maliciously;

c) Ambulancechasers loading charges on at every stage proves that they are treating this as a vehicle to extort ££ out of me rather than ensure that XYZ gets paid which is what I thought was the main/sole object of the exercise.   This is corroborated by some of the online reviews about them. 

I received a County Court claim form dated 11 Aug and filed an acknowledgement of service indicating my intention to defend the claim on 25 Aug.

Where do I stand? 

Mark

Woodstok2000

What does your lease or other contracts say about these fees? Ours states they are due monthly so there would be no way they could be demanded for 6 months without us agreeing to an amendment. Id suggest thats your starting point for a defence.

eddddy

.

Are you saying that you've already paid all the charges that are stated in the court claim?

If so, do the Management Co disagree that you've paid all the charges state in the court claim?

Generally, the advice is to pay whatever charges are being demanded - but pay under protest, and then go to tribunal.

That will stop the court action and stop further charges being added to your bill. (If the solicitors continue with court action, and you lose, that could add thousands in legal fees to your bill.)

You can then take your time in preparing a case and take the management co to tribunal - and hopefully if you win at tribunal, you'll get some of your money back.

If you are disputing the amount of any of the charges, or your liability to pay them - potentially, you need to base your tribunal case (or defence in court) on some/all of the following:

• What your lease says about Service Charges
• What your lease says about Administration Charges resulting from a breach of the lease (i.e. legal costs resulting from non-payment of Service Charges)
• What any separate agreement about paying monthly installments for Service Charges says
• What the law says about Service Charges and Service Charge Demands
• What the law says about Administration Charges

Plus a timeline of what happened and when.

A few comments on this:

1) You say that you failed to make a service charge payment on time - which would be a breach of the lease.
- Your lease and the law probably allow the management co to charge you enforcement costs (including legal fees) resulting from this.

2) You say that you made some service charge payments without a payment reference, and so they weren't allocated to your account
- Where you charged additional costs as a result of this?
- If so, it would be up to a Tribunal to decide whether this is 'reasonable'. (e.g. should the Management Co have tried harder to work out that they applied to your account)

3) You say that you missed a monthly instalment payment, and so the Management Co demanded the full 6 months payment in advance.
- What does your lease say about when Service Charge payments are due?
- If you have a separate agreement about monthly payments, what does it say will happen if you miss a monthly payment?

4) Was the initial Service Charge bill legally valid? Did it correspond to the lease? Did it meet the statutory requirements (e.g. name of landlord, copy of rights etc)

5) Were the bills for Administration Charges (i.e. legal fees) legally valid? (e.g. name of landlord, copy of rights etc)

6) Did the Management Co give you reasonable warning that they were going to instruct solicitors?

7) If the solicitor is acting as the Management Co's agent, it is perfectly valid for the Management Co to tell you to pay the solicitor.

silvercar

do you have legal insurance with your contents insurance? Worth a call to them if you do.