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I've been working through this on my own so far (after reading a number of very helpful threads).

 

Some brief background is that I own a leasehold apartment in a small development (15 flats over 2 floors). After much begging and withholding of payments on account we have finally been provided with some accounts for 2009/10 which I am not happy with. I have queried a number of items with the agents, but I'm at a bit of a loss to know whether some of the charges are reasonable.

 

Opinions anyone? (Numbers are rounded to preserve anonymity)

 

Management - £1700

Audit fee - £750

Professional fees - £500

Lift maintenance - £900

Fire alarm maintenance - £600

Health and Safety inspections - £1400 (clarified as reports and inspections for risk assessments which have to be done annually)

 

The management company were told that the cleaning contractors for the common parts were not doing their job and they have since been replaced. Can I reasonably refuse to pay some of the cleaning charges? Should the management company have consulted the tenants before awarding all these maintenance contracts? The charges are all included in the lease terms.

RMW

"If you want my parking space, please take my disability" Common car park sign in France.

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Service Charge disputes involve a frightening degree of legal complexity; so much so that, in my experience, only a Solicitor is likely to win such a case.

 

Much more law is involved than just the 1985 Landlord and Tenant Act

 

Look at some of the reported decisions on the lease-advice.org website, for example table #6 dealing with breaches of the lease - http://www.lease-advice.org/lvtdecisions/tables.asp?table=6 or table #2 - remember to open the hidden columns with the red link on their page.

 

 

Read this thread: Service Charges dispute - Suggestions

 

Read this thread: Building works

 

Basically, you would have to be refusing to pay the service charge item in dispute on one of the legal grounds mentioned in those threads.

 

 

It can lead to a lot of bad feeling, because if one tenant in a block sues the landlord - or is sued by the landlord - and the tenant loses the case, or partly loses the case, usually all of the landlord's legal fees will be added to the service charge for that period, and so will fall on all the tenants in the block - even those who were not at fault, or who had no interest at stake in the court action.

 

The tenant in question can find his popularity fall rapidly, and all the other tenants may end up ganging-up on him.

 

The landlord can easily end up reclaiming thousands of pounds in legal fees from the tenants; because in a typical case the landlord will generally have expert legal representation, and will therefore have an enormous advantage over an unrepresented tenant.

 

 

Unfortunately, the type of questions you are asking all boil down to 'Can I win my claim?' This is a question that only the Court which hears the case can decide.

 

The Court will take into account the evidence which is given at a hearing by you and by, or on behalf of, the landlord. This evidence will only emerge by cross-questioning of the witnesses.

 

The outcome of a Court case is never certain.

Edited by Ed999
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I am not acting alone in this, but as a representative of all but 1 of the tenants. The service charge overall is three times what we were lead to expect (it's a new build property), the standard of management is appalling and even basic maintenance takes months to organise, e.g. the lift has now been faulty for 4 months even though the management company know there are two disabled people living in the block.

 

The main thing I was really asking is do those numbers look reasonable to anyone with more experience of service charges? If the general consensus is that they might be a bit high, we will get professional advice but we don't want to incur any costs if there is no chance of fighting this.

RMW

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I think you clearly need to do two things:

 

1. Tell us the address of the property, because what might be reasonable in Central London might be highly marginal in Tower Hamlets, and completely out-of-the-ballpark in Northumberland.

 

2. Get some comparative quotes for the work from local firms, and then ask us again.

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1. The property is in the south west of England, a relatively expensive coastal resort.

 

2. I have asked for quotes for lift maintenance and fire alarm maintenance but the companies involved won't quote because they need the landlord's instructions. I have no idea who to even ask for quotes for the remaining items. We are considering instructing some sort of professional to scrutinise the charges, but again are at a bit of a loss as to who - a surveyor perhaps?

RMW

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As a minimum requirement, please state at least which County the property is in.

 

You must obtain comparative quotations for the work. This is NOT optional. It is futile to begin court proceedings disputing the service charge unless you have obtained comparative quotes for the job.

 

If you are unable or unwilling to do so, your options might reduce to -

 

a. buying the freehold under the 1993 Act, or

 

b. applying for the Right to Manage, under the 2002 Act.

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I've been working through this on my own so far (after reading a number of very helpful threads).

 

Some brief background is that I own a leasehold apartment in a small development (15 flats over 2 floors). After much begging and withholding of payments on account we have finally been provided with some accounts for 2009/10 which I am not happy with. I have queried a number of items with the agents, but I'm at a bit of a loss to know whether some of the charges are reasonable.

 

Opinions anyone? (Numbers are rounded to preserve anonymity)

 

Management - £1700

Audit fee - £750

Professional fees - £500

Lift maintenance - £900

Fire alarm maintenance - £600

Health and Safety inspections - £1400 (clarified as reports and inspections for risk assessments which have to be done annually)

 

The management company were told that the cleaning contractors for the common parts were not doing their job and they have since been replaced. Can I reasonably refuse to pay some of the cleaning charges? Should the management company have consulted the tenants before awarding all these maintenance contracts? The charges are all included in the lease terms.

 

Hi there.Are you aware of the Leasehold Valuation Tribunal (LVT), have a look at http://www.rpts.gov.uk/ to find out more, also very useful is Lease Advisory Service for free info. http://www.lease-advice.org/.You ,may also like to approach CAB or a solicitor, although Landlord & Tenant Law is quite specialised and many solicitors can be a bit clueless.You ask whether amounts are reasonable or not, it is very hard to say without knowing more details, for example some people may pay £50 a year for but if you have a property with gym, swimming pool, concierge, lifts you may well be paying many thousands, however the general rule is, the freeholder/management company does the work and recovers the cost from you, if no work has been done (as you appear to claim) then you may dispute what you are paying for.

As for witholding amounts, in theory there are valid legal reasons to withold payment, these refer to things such as invalid or no landlord address on demand or demand sent which doesnt comply with the lease or statute law (mainly regarding the 'summary of rights'), having a dispute isnt an actual valid reason, what you should do is pay (but make it clear it is under protest and not an admittance) and then seek to recover the money via an LVT.As for consulting you about works, if a amount of wpork will cost each leaseholder more than £250 each, then the landlord must follow the strict S20 Consultaion procedures, as for contracts, if this will cost the tenant more than £100 per year there is again a similar legal obligation to inform you (however only if the contract is over 12 months, there are ways for sneaky landlords to get around this).I assume the amounts you quote are for the whole building, how many flats are there ?. The amounts do appear high-ish but make be deemed recoverable by a LVT court, I'm sure Ed999 will also warn you of the perils of having a lease that enables the landlord to recover legal costs, so find your lease and have a good read :)Andy

Edited by andydd
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I'm sure Ed999 will also warn you of the perils of having a lease that enables the landlord to recover legal costs, so find your lease and have a good read

 

Always happy to oblige. :-)

 

 

Service Charge disputes involve a frightening degree of legal complexity. You might get a better idea of how to approach such a dispute by reading some of the reported decisions on the lease-advice.org website, for example table #6 dealing with breaches of the lease - http://www.lease-advice.org/lvtdecisions/tables.asp?table=6 or table #2 - remember to open the hidden columns with the red link on their page.

 

 

The landlord can easily end up reclaiming thousands of pounds in legal fees from the tenants; because in a typical case the landlord will generally have expert legal representation, and will therefore have an enormous advantage over an unrepresented tenant.

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From a purely practical point of view, I think that unless the management company agree to reduce some or all of the charges, we might have to let this one go and start down the route of 'right to manage'. The lease does give the landlord the right to charge legal fees to the service charges, so it seems either we pay up or we fight, perhaps win, and pay the legal costs instead.

Incidentally, none of the notices regarding service charges have complied with all the statutory requirements, but I presume that could be rectified so it's pretty pointless refusing to pay on those grounds too?

RMW

"If you want my parking space, please take my disability" Common car park sign in France.

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My advice is applicable only if the premises are entirely within England and Wales, and only if you were over 18 years of age when the tenancy was granted.

 

 

The lease does give the landlord the right to charge legal fees to the service charges, so it seems either we pay up or we fight, perhaps win, and pay the legal costs instead.

 

If you win your case in the LVT, it has power, on request, to make an order prohibiting the landlord from adding any of his legal exopenses of the LVT case to the service charge. This requires you to make the necessary application for such an order.

 

The problem of legal costs arises mainly in cases where the tenant loses the case.

 

But because the landlord is typically represented by a Solicitor and/or a Barrister, he usually has a better chance of winning than you do, because your inexperience in such claims can lead you into errors.

 

 

Incidentally, none of the notices regarding service charges have complied with all the statutory requirements, but I presume that could be rectified so it's pretty pointless refusing to pay on those grounds too?

 

If there has been a failure to comply with the statutory requirements, that is usually worth adding as a second challenge if you are challenging the reasonableness of the amount of the service charge. You should consult a Solicitor for advice before making such a failure the sole challenge.

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From a purely practical point of view, I think that unless the management company agree to reduce some or all of the charges, we might have to let this one go and start down the route of 'right to manage'. The lease does give the landlord the right to charge legal fees to the service charges, so it seems either we pay up or we fight, perhaps win, and pay the legal costs instead.

Incidentally, none of the notices regarding service charges have complied with all the statutory requirements, but I presume that could be rectified so it's pretty pointless refusing to pay on those grounds too?

 

RTM can be a good option, it can be a bit complicated to initially setup but onvce up n running it will almost certainly work out cheaper, a possible downside is when you still have tenants who dont pay up then it is upto you (or whoever is effectively running the RTM to 'chase' them for payment).If you are sure that notices have not complied with requirements then you may well be entitled to pay nothing, it is true that they someti mes can be recitified later but not always, there is an 18 month limit that may apply and failure to consult with regarding to major projects is quite serious, many landlords have fallen foul of this and instead of being able to recover 10's or 100's of thousands they find themselves stuck with the £250 limit.Where do you believe your landlord has failed to comply with the regulations ?Andy

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Right To Manage [RTM] is potentially an excellent solution to your problems.

 

Pay a Solicitor to obtain the RTM rights for you, because you'll never cope with the maze of legal complexities in setting up the limited company and in making the application to the LVT tribunal.

 

But once the right has been obtained by the tenants, they can easily cope with the day-to-day management themselves. I agree that it's much better than your current situation.

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  • 2 months later...

We're still getting nowhere with this, mostly because the management company are totally ignoring all correspondence and just sending out arrears notices to everybody - the situation is getting mildly frustrating to say the least.

 

Most of the tenants have now been here for 2 years and we've yet to receive a single demand for payment (ground rent or service charges) which meets statutory requirements, e.g. ground rent demands do not have the name and address of the landlord, no one has ever received a summary of our rights etc. Additionally, we asked a year ago for a summary of charges which was eventually produced 7 months later but again doesn't meet statutory requirements - it's basically a list of charges in various categories with no detail or supporting information.

 

Whilst the management company can obviously rectify some of this with new notices (though we'll probably be charged for their time in doing so) and no one is trying to avoid paying genuine and reasonable charges, how do we sort this out if they just ignore us? We don't want to go to the LVT for all the reasons mentioned earlier in the thread.

RMW

"If you want my parking space, please take my disability" Common car park sign in France.

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We're still getting nowhere with this, mostly because the management company are totally ignoring all correspondence and just sending out arrears notices to everybody - the situation is getting mildly frustrating to say the least.

 

Most of the tenants have now been here for 2 years and we've yet to receive a single demand for payment (ground rent or service charges) which meets statutory requirements, e.g. ground rent demands do not have the name and address of the landlord, no one has ever received a summary of our rights etc. Additionally, we asked a year ago for a summary of charges which was eventually produced 7 months later but again doesn't meet statutory requirements - it's basically a list of charges in various categories with no detail or supporting information.

 

Whilst the management company can obviously rectify some of this with new notices (though we'll probably be charged for their time in doing so) and no one is trying to avoid paying genuine and reasonable charges, how do we sort this out if they just ignore us? We don't want to go to the LVT for all the reasons mentioned earlier in the thread.

 

Hi, sorry to hear you are not getting anyway with this, however at the end of the day, it would appear you have the right to withold payment, so ultimately the landlord is going to have to start some sort of legal action, most prob the small claims/LVT route or perhaps the S146 route but that is less likely.

 

What you should so is write back and be as reasonable as possible, point out that you are not simply refusing to pay but that you have the right to withold service charges if certain procedures arnt followed, most likely for ground rent S166 of Commonhold & leasehold Reform Act 2002 and the Landlord & Tenant Act 1985 regarding Summary of Rights to be senbt with demands. (Failure to follow those two gives you authority to pay nothing, that is before you start questioning reasonablness).

 

It would appear that the ball is out of your hands now, all you can do is be as reasonable as possible (this will look good at any future court/LVT case) and I would assume that the landlord would eventually chase you through legal action.

 

You mentioned being wary of an LVT due to the legal charges clause, however if you come away from the LVT successful than the LVT would almost certainly grant a S20C disallowing legal costs to be added to the service charge, however like most legal action it involves an element of risk.

 

Perhaps you should point the landlord towards this judgement (involving my own landlord), http://www.lease-advice.org/decisions/other/pdf/5894_dir/5894_page1.htm, where the landlord is critiszed for harrasment and sending legally incorrect demands..It also highlights the perils of starting an RTM without proper knowledge. (Although it is generally accepted they are a good idea).

 

Let me know of any further help you need.

 

Andy

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Hi, sorry to hear you are not getting anyway with this, however at the end of the day, it would appear you have the right to withold payment, so ultimately the landlord is going to have to start some sort of legal action, most prob the small claims/LVT route or perhaps the S146 route but that is less likely.

 

What you should so is write back and be as reasonable as possible, point out that you are not simply refusing to pay but that you have the right to withold service charges if certain procedures arnt followed, most likely for ground rent S166 of Commonhold & leasehold Reform Act 2002 and the Landlord & Tenant Act 1985 regarding Summary of Rights to be senbt with demands. (Failure to follow those two gives you authority to pay nothing, that is before you start questioning reasonablness).

 

It would appear that the ball is out of your hands now, all you can do is be as reasonable as possible (this will look good at any future court/LVT case) and I would assume that the landlord would eventually chase you through legal action.

 

You mentioned being wary of an LVT due to the legal charges clause, however if you come away from the LVT successful than the LVT would almost certainly grant a S20C disallowing legal costs to be added to the service charge, however like most legal action it involves an element of risk.

 

Perhaps you should point the landlord towards this judgement (involving my own landlord), http://www.lease-advice.org/decisions/other/pdf/5894_dir/5894_page1.htm, where the landlord is critiszed for harrasment and sending legally incorrect demands..It also highlights the perils of starting an RTM without proper knowledge. (Although it is generally accepted they are a good idea).

 

Also dont forget that the longer it goes on, the more amounts may fall under the 18 month rule, meaning the landlord may be unable to collect amounts incurred over 18 months old...So it is in his interest to act promptly, whereas it may benefit you if he does nothing.

 

Let me know of any further help you need.

 

Andy

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My comments apply only if the premises are entirely within England and Wales, and you have a tenancy granted for a term exceeding 21 years, and you were over 18 years of age when you acquired the tenancy.

 

 

Service Charge Law -

 

The best source of advice on-line is:

http://www.bluebulb.co.uk/propertyleases

 

Other useful websites include the Leasehold Advisory Service and Landlord Zone.

 

 

Right to Refuse Payment

 

A leaseholder has the right to withhold payment of certain charges.

 

(a) If the landlord does not comply with section 158 of the Commonhold and Leasehold Reform Act 2002 (a requirement to provide a prescribed form statutory summary of the tenant's legal rights accompanying the demand) the tenant can withold payment of all administration charges (as defined in that Act).

 

(b) If the landlord does not comply with section 166 of the Commonhold and Leasehold Reform Act 2002 (a requirement to provide a prescribed form of notice accompanying a demand for ground rent) the tenant can withold payment of all ground rent.

 

Failure of the landlord to comply with those requirements gives a tenant legal authority to refuse payment, until those requirements have been complied with, even if he is not questioning the reasonableness of the demand.

 

Other grounds for objecting to a service charge demand are summarised in this thread:

 

Service Charges dispute - Suggestions

Edited by Ed999
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My comments apply only if the premises are entirely within England and Wales, and you have a tenancy granted for a term exceeding 21 years, and you were over 18 years of age when you acquired the tenancy.

 

 

Service Charge Law -

 

The best source of advice on-line is:

http://www.bluebulb.co.uk/propertyleases

 

Other useful websites include the Leasehold Advisory Service and Landlord Zone.

 

 

Right to Refuse Payment

 

A leaseholder has the right to withhold payment of certain charges.

 

(a) If the landlord does not comply with section 158 of the Commonhold and Leasehold Reform Act 2002 (a requirement to provide a prescribed form statutory summary of the tenant's legal rights accompanying the demand) the tenant can withold payment of all administration charges (as defined in that Act).

 

(b) If the landlord does not comply with section 166 of the Commonhold and Leasehold Reform Act 2002 (a requirement to provide a prescribed form of notice accompanying a demand for ground rent) the tenant can withold payment of all ground rent.

 

Failure of the landlord to comply with those requirements gives a tenant legal authority to refuse payment, until those requirements have been complied with, even if he is not questioning the reasonableness of the demand.

 

Other grounds for objecting to a service charge demand are summarised in this thread:

 

Service Charges dispute - Suggestions

 

and also it would seem S47 and S478 of L & T Act 1987 relating to landlords name and address on demands.

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My comments apply only if the premises are entirely within England and Wales, and you have a tenancy granted for a term exceeding 21 years, and you were over 18 years of age when you acquired the tenancy.

 

 

Service Charge Law -

 

The best source of advice on-line is:

http://www.bluebulb.co.uk/propertyleases

 

Other useful websites include the Leasehold Advisory Service and Landlord Zone.

 

 

Right to Refuse Payment

 

A leaseholder has the right to withhold payment of certain charges.

 

(a) If the landlord does not comply with section 158 of the Commonhold and Leasehold Reform Act 2002 (a requirement to provide a prescribed form statutory summary of the tenant's legal rights accompanying the demand) the tenant can withold payment of all administration charges (as defined in that Act).

 

(b) If the landlord does not comply with section 166 of the Commonhold and Leasehold Reform Act 2002 (a requirement to provide a prescribed form of notice accompanying a demand for ground rent) the tenant can withold payment of all ground rent.

 

Failure of the landlord to comply with those requirements gives a tenant legal authority to refuse payment, until those requirements have been complied with, even if he is not questioning the reasonableness of the demand.

 

Other grounds for objecting to a service charge demand are summarised in this thread:

 

Service Charges dispute - Suggestions

 

I cant say I recommend the Bluebulb site as it would appear to be against CAG rules as its a pay site where you are charged £9.99 per question, the LAS site is free and questions can be asked via email/phone or face to face at no cost, or your local CAB may be of help.Andy

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Thanks for all the advice - I'll work my way through all of the links given.

 

As I said earlier, whatever our rights none of the tenants want to avoid paying legitimate and reasonable charges. Perhaps we ought to bypass the management company and complain to the landlord?

RMW

"If you want my parking space, please take my disability" Common car park sign in France.

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Yes, Bluebulb does charge in some circumstances. I hadn't realised that when I found it via Google.

 

But the site includes free advice too - Google for it. I meant that its free advice is some of the best I've seen on-line.

 

Even so, £10 a go is a lot less than you'll be charged by a Solicitor.

Edited by Ed999
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Having read all the information on here and in the links provided I've emailed the Leasehold Advisory Service.

 

'We have been querying service charges with the management company for 12 months now and are getting nowhere.

 

We have owned the property for XX, it is a new build. None of the demands for payment of ground rent or service charges have complied with statutory requirements, i.e. the landlords name and address is not shown and no summary of our rights has been included. We have however paid all ground rent due to date and service charges up to July 2010.

 

Following the demand for payment for July 2010 I asked for details of how the service charge had been calculated. In October 2010 I was provided with a list of expenditure under various headings, e.g. management fees, but no further explanation. I queried the level of most items, especially for example cleaning when the management company were aware and had admitted that the contractors had actually not carried out any cleaning.

 

I have now written four letters to the management company regarding this. One reply stated the charges were reasonable without further explanation and without answering any specific queries, subsequent 'replies' have simply been further (also invalid) demands for payment.

 

We are not attempting to avoid payment of reasonable and legitimate charges, but if the management company won't reply to correspondence what options do we have? The company are members of RICS and are clearly not following their guidelines. The LVT would be an absolute last resort.'

 

Will post a summary of the response when it's received.

RMW

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I've just used the site and got 3 answers for £9.99 and a really good Guide.

 

The answers are easy to understand and supplied in document form that can be downloaded - all the ammunition I need

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Yes, Bluebulb does charge in some circumstances. I hadn't realised that when I found it via Google.

 

But the site includes free advice too - Google for it. I meant that its free advice is some of the best I've seen on-line.

 

Even so, £10 a go is a lot less than you'll be charged by a Solicitor.

 

Aha..that link is better as it gives a whole page of free info and is certainly a good 'quick guide' although I didnt seem to be access that page directly from the main site page. £10 certainly isnt a lot compared to a solicitor but the lease advisory site is free and to be honest with even the best advice you may still come unstuck at an LVT unfortunately, I was lucky enough to see someone from CAB who specialised in housing/leasehold issues but alas the LVT in their 'wisdom' came to some strange conclusions in my case.

 

Anyway..back to the OP, what does the lease say about the management company, are they a party to the lease ?. They may be closely involved with the freeholder (in my case, the same people or person but with a different hat on), it certainly wouldnt hurt to send all your concerns to both the MA and freeholder, in case of legal action it would be between you and the freeholder (unless the MA is party to the lease).

 

Andy

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The management company and landlord are completely separate. The landlord is a very large company but residential properties are not a huge part of their business. The management company are a relatively small firm of chartered surveyors.

Depending upon what the LAS suggest I will now copy all correspondence to the landlord.

RMW

"If you want my parking space, please take my disability" Common car park sign in France.

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The management company and landlord are completely separate. The landlord is a very large company but residential properties are not a huge part of their business. The management company are a relatively small firm of chartered surveyors.

Depending upon what the LAS suggest I will now copy all correspondence to the landlord.

 

But ultimately your contract (in this case a lease) is between you and the freeholder, if the management agent makes a hash of things..then tough..it is still the freeholder who is responsible, so thats why its wise to copy them in..this does of course depend upon the lease, some newer leases make the managhement company a party tothe lease in which case the scenario my be different (but not much).

 

Andyh

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