My wife owns a second property, and recently recieved a notice from the Freehold managers demanding payment of £100 ground rent and £146.88 in "Administration Expenses" i have tried unsucessfully (so far ) to extract a breakdown of the costs that have been applied to the account.
There had been no previous correspondance from this firm although they have since informed me that the ground rent was due on 31st March 2005, the letter which also contained a "copy" of the original invoice. The "Copy" of the original invoice was dated the day before the letter demanding the total of £246.88.
I pointed this out to the company involved and they now say that it was a reprint and not a copy.
Can i ask for a breakdown of charges under the DPA in this instance ?
I don't think it would be covered by the DPA. Did your wife use a solicitor when she purchased the lease? If so, they may be able to provide a copy.
The amount of the ground rent would be set out in the lease and doesn't seem outrageous. Under the lease it may be possible for the management company to levy an administration fee but the amount being claimed seems excessive to say the least. Unfortunately without knowing what's in the lease, it's quite difficult to advise.
If this property is a flat then, there will be ground rent, unless the owners own the Freehold between them.
As for the other charge. This is not unreasonable, it is for the upkeep of the common parts, ie communal gardens, parking areas, communal lighting, and of course Building Insurance, which can be quite expensive.
If there is a managing agent they are entitled to add up to 15% of everything that they spend on the upkeep of the property.
Also if you have just recently purchased this property, then you cannot be charged for ground rent or service charges that are for last year if someone else owned the property.
Your solicitor should have asked about the management of the Freehold when you purchased the property, and you should have had a copy of the lease.
"Administration Expenses" could be anything. Taken at face value it seems to be a charge for administering the ground rents process. Normally leases will be quite specific about what is being charged for and good practice dictates that a service charge bill will be sufficiently detailed to enable the leaseholder to check that the costs fall within the definitions included in the lease. Indeed the ODPM has just finished consulting on a minimum standard for service charge invoices. If these expenses are indeed for services, then the leaseholder has a statutory right to inspect the accounting records and I would suggest that they do so in this case.
The 15% administration expenses is a common misconception. Again this is determined by what's in the lease. They will sometimes specify a fixed percentage. Others say that the charge should be based on actual costs. 15% is likely to be the maximum amount chargeable in such cases but quite often these charges have been reduced by Leasehold Valualtion Tribunals to much lower levels.
ground rent can be the money for rent of the land... we get ground rent and we do not include other things in the ground rent like maintenance which is extra. i suppose we could call those "administrative fees." if you have lots of properties its actually cheaper to call maintenance that rather than detail it individually, would you rather have a full invoice with everything detailed that costs £10 because someone had to work out 15% of painting the outside to meet conservation area standards, 15% of a new lightbulb, 15% of tree pruning?
The "admin fees" are due to the unpaid rent, they are nothing to do with the maintenance costs which are paid to a seperate entity, When i wrote to them asking them how "admin Expenses" OF £146.88 could be incurred within 2 days of the issue of the invoice, i sent them a cheque for £100 for the ground rent in full and final settlement of the account as i did not think that their charges were reasonable.
They wrote back returning the cheque and threatened to inform the mortgage company that we had not paid the ground rent, and that they were going to approach them (the mortgage co) for payment.
I wrote again requesting a breakdown of how such charges could be accrued in 2days from the issue of the original invoice.
They wrote back with a list of the charges that they charged for things for example
A breakdown of "Administration Expenses" would cost me £17.82
A copy of the lease would cost me £x
I have since written back confirming that we have no intention of paying any unsubstantiated "admin Expenses" and that i had informed the mortgage provider of the situation and that i had offered to pay the Ground Rent but refused to pay such ridiculous charges.
Will the DPA letter get me the breakdown of charges ?
I still cant see how the DPA letter will not make them give me a breakdown of charges to my account, They are charges to MY account only these are not for any maintenance, just charges due to "non payment of Ground Rent"
My landlord is demanding, through yet another managing agent, payment for "outstanding" service charges and management fees, which he claims are 7 years old. Is there a legal limit to how far back demands can be made? We have a troublesome history with the freeholder and this seems to be another example of his underhand methods.
If you have a copy of your Lease, it should contain the sum of the Ground Rent, and any increase that may be written into the Lease. This is the rent that you pay to the Freeholder for the ground on which the property stands. Most ground rents are paid twice yearly on Lady days, and if the Lease is fairly new it may contain increases set up every 25 years. The average ground rent is about £100 per year, but there are a lot of old leases still running from 90+ years ago that may only be about £10 per year.
If all the residents jointly own the Freehold then the Ground Rent is usually waived, as if you own it together you have no real need to pay it.
However, if it is Service Charges, then it is different. Service charges are made up of Insurance of the buildings, cost of keeping communal areas clean, cost of gardening and cost of Electricity to light the communal areas.
Its quite straightforward if it is managed properly by the residents themselves. You all pay the same for the management of the upkeep of the common parts and the building insurance.
You are entitled to have a copy of the Management Accounts every year and there should be an Annual General Meeting to discuss any increases in charges etc.
Thanks for message re ground rent - my problem relates to an OLD demand - i.e. one the freeholder 'discovered' has not been paid through an old, unreliable managing agent. This is 7 years olf - alledgedly. Can they make demands that far back ?
There is an angle under the Data Protection Act 1998 that could address this issue. Under the Act, any person in control of information which relates to an individual, such details about service charges, is under a statory duty to ensure the information is 'accurate'. If it is not, then it is unfair processing under the Act and an indivudla can apply to a court for the information to be corrected. The person controlling the information, such as a freeholder, must show how the information is fair. Compensation can also be claimed for stress caused by the inaccuracy.
Help Please anyone?
I have been unable to pay my ground rent since 1998 as that was the last time I had an address to send the money to, I always paid and it was not a problem. However, the organisation changed and I was no longer able to forward my ground rent. Conseqently last August I received a letter from a Property Management firm stating I owed 12 yrs (which is incorrect) and that as they had been appointed to collect the fees would I send a cheque. I was so angry that after all these years someone is just able to just demand the fees, which had I had the correct payee address, the Ground rent would have been paid. I wrote to my MP who wrote to the Property Management firm but they simply reported back to him as they had told me, I am owing 12 years, I have heard from another Property Management (where my Mum pays hers) that in Law they are not able to claim more than six years in arrears. Is this correct and should I ask my MP to investigate further?
the whole system for service charges is set up to favour the freeholder. you have a lease and it talks about 'reasonable amount' to be charged. the management comp uses its discretion as to what should be spent on, such as upgarding fire escape but not on cleaning the estate, without asking the leaseholders. when you ask them for more info, they do not bother to reply.if you go to the leasehold valuation they invariably favour the freeholder. even if the leasehold valaution tribunal holds in your favour the freeholder can appeal to the lands tribunal and if they loose here they can go on appealing to the next court available to them. in the meantime legal costs built up by the freeholder are charged to the service charge account, which has to be paid by the leaseholders. the freeholder is always on a win-win situation and the leaseholder is the looser from every aspect. where is the justice here? private freeholders seem to be having a winner. the company getting away with this situation is freshwater and now county estate management(managing for wisestates ltd) seems to be getting to the action.