Management company service fees case & set aside *Success*

[sick.as.a.chip]

hi just wondering if anyone could help me please.

 

I own a house on a fairly new development and there is a management company who i hate!

 

They offer to let us pay our fee's in installments.

 

I am also dealing with a company collecting fee's from previous years we had not paid fully and they too are offering us installments and charging a fee for it.

 

Can anyone please tell me if they need to be regulated by anyone as i have a statement from them

and more than 50% of the money we owe them is fee's for one thing and another!

 

I just want to know if i can complain to someone as it seems very unfair! Thank you!

[raydetinu]

One for Andydd I think!

 

There is a Leashold valuation tribunal that can assist if you think the charges are high and complain to.

I do not believe they can charge fees or interest?

[andydd]

Howdee.

 

Is your propertty leasehold ?. If so the scenario is that there is a freeholder who then employs a mangement company who do the day to day work, maintanence, etc. The relationshiop between you and the freeholder and/or management agent is contractual (your Lease) but there are also lots of other statute laws that he must comply with, mostly in Landlord & Tenant Act 1985, plus Commonhold & Leasehold Reform Act 2002 introduced some newer ones.

 

But they are effectively unregulated but should follows the rules in RICS Code and ARMA. (if they are members).

 

Although sometimes the scenario is that the houses are not freehold but there still is a management company that looks after certain areas, the relationship between you and the MC is purely contractual, somewhere there must be a contract/deed.

 

Either way you only have to pay what it stipulates in the Lease/Contract.

 

Andy

[sick.as.a.chip]

Howdee.

 

Is your propertty leasehold ?. If so the scenario is that there is a freeholder who then employs a mangement company who do the day to day work, maintanence, etc. The relationshiop between you and the freeholder and/or management agent is contractual (your Lease) but there are also lots of other statute laws that he must comply with, mostly in Landlord & Tenant Act 1985, plus Commonhold & Leasehold Reform Act 2002 introduced some newer ones.

 

But they are effectively unregulated but should follows the rules in RICS Code and ARMA. (if they are members).

 

Although sometimes the scenario is that the houses are not freehold but there still is a management company that looks after certain areas, the relationship between you and the MC is purely contractual, somewhere there must be a contract/deed.

 

Either way you only have to pay what it stipulates in the Lease/Contract.

 

Andy

↲Thank you andy.

 

Our house is freehold but we have a garage that is leasehold and everyone on the estate pay's towards the up keep of parking area's and the grassed area's.

 

They are charging a fee to allow us to pay the stupidly high fee's in installments.

 

My other issue with them is that they have employed a debt management company to collect previous years fee's who are also offering installments.

Is that not offering credit?

Thanks for the info!

[andydd]

Well..what is the agreement that requires you to pay the MC ?. Must be a contract or deed somewhere, you only have to pay in accordance with that.

[sick.as.a.chip]

andy its in the restrictive covenants and i've had a look through but they are charging a deferred payment charge to pay by installments. The charges i'm annoyed about are things like legal fee's and land registry searches they have not told me about. I just wondered if they charge a fee for allowing you to pay over a period of time are they not offering credit and therefor need to adhere to some law or should there not be a credit agreement?

[citizenB]

If it is determined that they are offering credit, then I think that they would need to be licenced by the OFT.

 

Do you have any written communication from them that would indicate that they do have an OFT licence number?

[sick.as.a.chip]

If it is determined that they are offering credit, then I think that they would need to be licenced by the OFT.

 

Do you have any written communication from them that would indicate that they do have an OFT licence number?

Thank you thank you thank you. Just got a letter they sent me out and at the bottom it states 'licensed by the consumer credit act 1974

' this is from the people chasing the arrears. Do you know if i can now ask them to prove how they arrived at the fee's for charges (not the actual management charge but fees for things like legal fee's, land registry fee's and such)?

[citizenB]

They should only be charging you what it costs them and no more - so yes, you can ask them to prove the fees

[sick.as.a.chip]

thank you! And i've got a lovely bank holiday to work on a letter to them to ask them to prove it. Thank you 4 your help!

[andydd]

Thank you thank you thank you. Just got a letter they sent me out and at the bottom it states 'licensed by the consumer credit act 1974

' this is from the people chasing the arrears. Do you know if i can now ask them to prove how they arrived at the fee's for charges (not the actual management charge but fees for things like legal fee's, land registry fee's and such)?

 

Well..more important does the contract/deed allow them to charge such fees in the first place, if they say legal fees are £200 eer hour then for example that may be correct, and they may of even spent that, but are these amounts recoverable from you ?

[sick.as.a.chip]

Hi Andy, I've had a read through the 15 pages of the lease and found the following (I've missed some bits out to save typing it all up word for word)

"Maintenance Charge, rent, interest and taxes

a) to pay the manangement charge and the rent on the days and in the manner herein provided without deduction.

That in the event of the maintenance charge the rent or any other sum payable in accordance with this lease remaing unpaid five working days after the same shall have become due (whether formally demanded or not) the buyer shall pay interest at the rate of 4% per annum above the base rate of the National Westminster bank PLC prevailing from time to time or at the rate of 12% (whichever shall be the higher) upon the amount remaining unpaid from the date at which it became due to the date of payment of such mauntenance charge or other sum being deemed to be rent recoverable by the management company as rent in arrear.

EXPENSES

to pay all expenses (including solicitors costs and surveyors fees) incurred by the comany or the management company in the recovery of any arrears of Maint Charge or incidental to the preperation and serve notice under section 146 of the law of property act 1925 (or any statutory modification re-enactment or replacement thereof) notwithstanding that forfeiture is avoided (other than relief granted by the court)

 

Does any of this make sence???

[sick.as.a.chip]

oh and i've checked the management company letter head does not show they are regulated by anyone but the debt collection company are???

[andydd]

Hi Andy, I've had a read through the 15 pages of the lease and found the following (I've missed some bits out to save typing it all up word for word)

"Maintenance Charge, rent, interest and taxes

a) to pay the manangement charge and the rent on the days and in the manner herein provided without deduction.

That in the event of the maintenance charge the rent or any other sum payable in accordance with this lease remaing unpaid five working days after the same shall have become due (whether formally demanded or not) the buyer shall pay interest at the rate of 4% per annum above the base rate of the National Westminster bank PLC prevailing from time to time or at the rate of 12% (whichever shall be the higher) upon the amount remaining unpaid from the date at which it became due to the date of payment of such mauntenance charge or other sum being deemed to be rent recoverable by the management company as rent in arrear.

EXPENSES

to pay all expenses (including solicitors costs and surveyors fees) incurred by the comany or the management company in the recovery of any arrears of Maint Charge or incidental to the preperation and serve notice under section 146 of the law of property act 1925 (or any statutory modification re-enactment or replacement thereof) notwithstanding that forfeiture is avoided (other than relief granted by the court)

 

Does any of this make sence???

 

HHmm..Well..a bit puzzling because these are standard LEASE clauses, meaning that it is a leasehold property , I think when you said Freehold you meant leasehold (meaning you own or effectively rent the property for 99 years or whatever) and someone else (the freeholder) owns the land. The freeholder employs a management company.

 

The clauses you mention are standard, the S146 is in nearly all leases, now it is rarely used, but it can be used to forfeit or take your property in extreme circumstances, in that case it allows legal costs to be recovered..although reading the first bit "EXPENSES

to pay all expenses (including solicitors costs and surveyors fees) incurred by the comany or the management company in the recovery of any arrears of Maint Charge", it does sound like that can charge you for other stuff such as debt collectors and other legal fees and not just S146 stuff.

 

The other clause means if you are late paying they CAN charge interest (Note: this isnt in every lease, mine has no such clause so my freeholder TRIED to charge interest but I had this overturned at an LVT).

 

As for regulation..forget it..they dont have to be regulated by anyone Im afraid, Ive already mentioned (ARMA - If they are a member) and generally they shoulkd follow the RICS Code (but even this isnt actually required by law).

 

So what are the extra charges in your bill ? Does your demand for payment comply with law (i.e does it have Service Charges - Summary of Rights attached ?).

 

I could help more if you could scan (to PDF) your lease and demands for payment.

 

Andy

[mariner51]

One way to avoid interest and surcharges is to pay full amount within timescale when demanded.

HMG charge extra for road tax, TV licence fee etc if paid by instalments, as do many Ins Co's.The Law also allows additional reasonable surcharges for payment by CC or debit card. 'Late' payment fee costs are guided by OFT advice, your only option may be LVT adjudication.

[andydd]

One way to avoid interest and surcharges is to pay full amount within timescale when demanded.

HMG charge extra for road tax, TV licence fee etc if paid by instalments, as do many Ins Co's.The Law also allows additional reasonable surcharges for payment by CC or debit card. 'Late' payment fee costs are guided by OFT advice, your only option may be LVT adjudication.

 

Yes..true...if payment is late is does appear that extra charges & interest CAN be added on.

 

As for instalments, unless the lease mentions them then any installment arrangment would be a personal one between you and freeholder/management agent.

 

A few things to check;-

 

Did demand have landlords address on it ?

 

Did demand come with Service Charge - Summary of Rights attached.

 

Did demand for extra admin charges come with Administration Charges - Summary of Rights attached ?

 

If no, then nothing maybe payable.

 

Also any amount of service charge or admin charge can be reduced at an LVT (I had amounts of £130 reduced to £25).

 

Andy

[sick.as.a.chip]

Thank you all. My house is freehold however we have a garage that is under an apartment and it is lease hold. All houses on the development have to pay an estate charge and depending on what sort of garage/parking space you have you have to pay more.

I recieved this from the debt management company today in reply to a request as to who they are regulated by:

We write further to the email below.

 

We can confirm that ROBBING GITS are not regulated by anyone however we work within the guidelines of the OFT.

 

As BIGGER ROBBING GITS Limited are Managing Agents they do not have a Governing Body. *** voluntarily register with ARMA. They ARMA will independently look at a residents complaint and ask *** as the Agents to respond accordingly.

 

We ask again that you contact our offices by 6pm on Monday 11 June 2012 to arrange payment.

 

Please note this is our final request for payment before initiating proceedings.

I will look at all the stuff they have sent me but I'm fairly sure they have included everything that they need to

[sick.as.a.chip]

Just found the invoice dated nov 2011. It includes:

Address for payment, Notice Pursuant to landlord and tenant act 1987 sections 47 & 48, a letter stating that if payment is not made on time the following charges apply: Reminder £15, Land registry fee £15, Admin debt collection fee £42, Initial external deby collection fee up to £250. "Further legal fees will be incurred on top of these charges if court action is required"

Service charge - summary of tenants rights and obligations also a break down of how the management charge is calculated and where it is allocated.

[andydd]

Well.. I wouldnt bother chasing up who regulates who, its pretty irrelevant, The RICS code has certain obligations and regulation as does the ARMA Code (IF they are a member, my freeholder isnt even a member), both organasiations have no legal clout so I wouldnt bother.

 

It does appear that your freegolder/management company is doing everything correct (i.e S47/S48 address, summary, etc).

 

The only real way to stop the extra charges is to pay on time or maybe make an LVT application, while they may agree that fees are payable they have the power to reduce them, I was succesful in this aspect, having sums of £130 reduced to just £25.

 

Im not sure what further advice I can give.

 

Andy

[andydd]

EXPENSES

to pay all expenses (including solicitors costs and surveyors fees) incurred by the comany or the management company in the recovery of any arrears of Maint Charge or incidental to the preperation and serve notice under section 146 of the law of property act 1925 (or any statutory modification re-enactment or replacement thereof) notwithstanding that forfeiture is avoided (other than relief granted by the court)

 

Is this EXACTLY what it says ?. It may be worth visiting LandlordZone > http://www.landlordzone.co.uk/forums/forumdisplay.php?11-Long-Leasehold-Questions and posted the above, its not 100% clear if it would cover all the extra fees.

 

In my case my lease DIDNT and therefore the landlord was NOt entitled to add on extra fees.

 

Andy

[sick.as.a.chip]

Hi Andy,question for you? Once a service charge has been through the courts you cant then ask an LVT to look at the charges can you?Basically We have recieved a default judgement for the service charge I was talking about as the part addmitance and defence was recieved the same daya s the judgemnt was entered. I now have the problem of do i go to get the judgement set aside and then proceed to offer a reduced amount as as far as I am aware they did not send me the summary of rights with the service charge demand or at any other point. Or do I pay the judgement (including something like £500 fee's and costs) and just get on with it. Subject obviously to them agreeing to the set aside!

[andydd]

Hi.

 

Yes..an LVT cant judicate on maters already decided upon in court (or even matters that have been agreed or admitted),

 

Why did they get default judgment ?. Defence same day as judgment doesnt quite make sense, but would sound you should ask for it to be set aside, if succesful then yes I assume it could then be the subject of further legal action at either CC or LVT.

 

If no valdisummary why would you want to ofer anything ?. As it stands if no summary then you will owe £0, although reserving a valid demand and summery may be quite simple.

 

Dont understand the bit about paying judgment AND getting set aside, are there two seperate cases ?. Personally I'd go for set aside assuming you have good reason as to why you didnt defend.

 

Andy

[sick.as.a.chip]

Sorry. Wrote it in a rush. Got to the point with it now that I'm not even sure what they sent me add's up! Only one case but was saying I'm not sure if I should try to get it set aside or if I should just give up and pay the full lot even though it would kill me!

Thinking going for the set aside and even if they won't do it then it buy's me some time to find the money as they have now written to my mortgage company asking them to pay it with an additional 650quid added on!

Just fed up with the whole lot to be honest but appreciate all your help!

[andydd]

You will need to show a good reason for your set aside and as to why you didnt properally defend it...obviously this is worth doing if you believe you have a valid defence (or at least you could argue service charges are too high or unreasonable).

 

Approaching your mortgage company is a bit of a grey and abused area although in your case as judgment has been given it would appear appropiate for them to do say, make sure that your mortagage company approaches you for your views and doesnt simply just pay up.

 

What do the £650 fees relate to ?. Legal/admin/interest costs ?. These are only payable IF the lease allows (many do not) and admin fees are only payable if a demand has been sent for them AND accompanied by the Admin Charges - Summary of Rights (many FH's forget this), in addition admin charges and legal charges collected under the service charge regime can also be challenged in an LVT both on the grounds of 'are thay payable at all ?' and ' are they reasonable in amount ?'.

 

Andy

[sick.as.a.chip]

Thanks Andy. I've sent the set aside request off so just need to keep my fingers crossed. Told the mortgage company what I've done so they don't just pay it and load it onto my mortgage. The 650quid is apparently legal costs for preparing the notice for the mortgage company. I was shocked they could do thatas they had not notified us or even asked if we were going to pay. I'm not sure how they can ask for an additional 650 either as that was not included in the judgement.

Its drove me crazy but at last had a break through with the statement they sent with the particulars of claim to the court and have worked out why its so high. They have not taken into account any payments we have made to them at all! They are claiming almost 700 and we have paid over 400 which covers the management charges but not the 275quid of additional fee's they are asking for.

Thanks for the pointer about the administration charge I've looked into it and really think it could help if the set aside works!