Managing Agents Refusing Serving Charge Accounts


C

CJB

We live in a purpose built block of 36 flats near Heathrow. The lease
states that all leaseholders should pay the service charge within 6
months of the end of the previous financial year - that is by
September. The lease also states that the formally audited service
charge accounts should also be sent to all leaseholders by then.

The managing agents are estate agents. The owner of the managing
agents is also the freeholder of the block. This is a very incestuous
arrangement making it impossible to get things done.

The managing agents have no complaints procedures and our concerns are
always ignored.

NOW THE MANAGING AGENTS ARE REFUSING TO SEND US THE SERVICE CHARGE
ACCOUNTS FOR LAST YEAR AND ARE ADVISING THAT IT IS 18 MONTHS NOT SIX
MONTHS WITHIN WHICH THEY HAVE TO DO SO. This is cr*p - the accounts
have normally been sent to us within 3 to 4 months well within the
interval stated in the lease.

We usually each pay £750 a year - this has been the same for years.
Then the property manager left and was not replaced. So the accounts
do not now have to pay a salary. So the leaseholder's account is very
flush with cash. And now things never get done, because it is a
secretary running the block.

But over the last two years we have had CCTV installed - apparently
the leaseholder funds have been flush enough to pay for this about the
tune of £25,000. But no notice or works was issued and leaseholders
were not given the opportunity to voice any concerns. The money was
simply taken out of our account and spent.

Then we have had the whole block rewired for Sky and digital t.v.
Again this was carried out using our funds, without any notice of
works being sent to leaseholders.

The managing agents extract a fee of 12.5% on all such works. Nice
little earner for them at our expense.

The managing agents only belong to the National Association of Estate
Agents. So they do not belong to any organisation to do with managing
a block of flats.

So what can we leaseholders do? Incidentally there is not a residents
association because the majority of the flats are owned and sub-let by
absentee owners and the tenants living there (some put in by Social
Services) don't give a damn either way.

Thank you - C.J.Brady
 
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T

tim....

..
So what can we leaseholders do? Incidentally there is not a residents
association because the majority of the flats are owned and sub-let by
absentee owners and the tenants living there (some put in by Social
Services) don't give a damn either way.
Basically all work must have been "necessary" and for works over a certain
amount per flat (250 IIRC) competitive quotes must be obtained and usually
the tenants allowed to comment.

To enforce this you make you complaint at an LVT.

http://www.lease-advice.org/

will help you.

(and yes you can complain retrospectively and if the expense has been found
to have been unreasonably/unnecessarily incurred you don't have to pay for
it)

tim
 
S

SB

.


Basically all work must have been "necessary" and for works over a certain
amount per flat (250 IIRC) competitive quotes must be obtained and usually
the tenants allowed to comment.

To enforce this you make you complaint at an LVT.

http://www.lease-advice.org/

will help you.

(and yes you can complain retrospectively and if the expense has been found
to have been unreasonably/unnecessarily incurred you don't have to pay for
it)

tim
Thank you folks. We'll certainly try the Lease Advice org.

Chris B.
 
D

David Woolley

CJB said:
NOW THE MANAGING AGENTS ARE REFUSING TO SEND US THE SERVICE CHARGE
ACCOUNTS FOR LAST YEAR AND ARE ADVISING THAT IT IS 18 MONTHS NOT SIX
If you ask for them within five months of the end of the accounting
year, they must provide accountant certified, but not necessarily
audited, accounts by the six months. If you ask for them after that,
they have one month to comply. If you are not satisfied when you
receive them, you have a right to see the original invoices, etc.,
within another month.
We usually each pay £750 a year - this has been the same for years.
If the lease does not make this figure variable:

1) you lose the legal protection, including the above.
2) you will have a real problem with inflation!

If it does make them variable, there should be justification for letting
the fund accumulate.
Then the property manager left and was not replaced. So the accounts
do not now have to pay a salary. So the leaseholder's account is very
flush with cash. And now things never get done, because it is a
secretary running the block.

But over the last two years we have had CCTV installed - apparently
That sounds like an improvement. Most private leases don't allow for
those, and they can only use the service charge for things allowed in
the lease. However, in my view, it is better to have a lease that does
allow for improvements.
the leaseholder funds have been flush enough to pay for this about the
tune of £25,000. But no notice or works was issued and leaseholders
Are there more than 100 flats? See other replies.
were not given the opportunity to voice any concerns. The money was
simply taken out of our account and spent.
If it is covered by L&T Act 1987(?) section 20, you only need to pay
£250 per flat.
Then we have had the whole block rewired for Sky and digital t.v.
Again this was carried out using our funds, without any notice of
works being sent to leaseholders.
Again sounds like an improvement. Does the lease allow them?
The managing agents extract a fee of 12.5% on all such works. Nice
little earner for them at our expense.

The managing agents only belong to the National Association of Estate
Agents. So they do not belong to any organisation to do with managing
a block of flats.
If the L&T Act applies, you can find an alternative managing agent and
potentially bring a case for mismanagement, resulting in your agent
replacing the current one. That agent will generally have to be an RICS
member to have credibility with the LVT.
So what can we leaseholders do? Incidentally there is not a residents
association because the majority of the flats are owned and sub-let by
absentee owners and the tenants living there (some put in by Social
Services) don't give a damn either way.
From the L&T Act point of view, residents in an RA don't have to be
resident!

I agree with the references to the Leasehold Advisory Service.
 
D

David Woolley

CJB said:
So what can we leaseholders do? Incidentally there is not a residents
I should add that there are three statutory notices that should
accompany three sorts of payment request: ground rent, service charges,
and administrative charges, and outline your legal rights. From your
description, you should have received at least the service charge one.
You can ignore any request that is not accompanied by the appropriate
notice and you cannot be charged late payment penalties as a result,
when the notice is properly served.

Note, I believe the ground rent one has been mis-drafted in a way that
allows small arrears to persist indefinitely, whereas the underlying Act
imposes a time limit. Communities and Local Government didn't even
reply when I tried to point this one out.

Obviously satisfy yourself that you understand the legislation and that
it applies to you, before withholding any payment, but do note that the
rationale for the legislation allowing charges to be withheld for
default of the notices is based on the presumption that that is cheaper
for everyone than a criminal prosecution, which is also possible. It
provides a sanction that can be applied directly by the tenant.
 
T

tim....

CJB said:
NOW THE MANAGING AGENTS ARE REFUSING TO SEND US THE SERVICE CHARGE
ACCOUNTS FOR LAST YEAR AND ARE ADVISING THAT IT IS 18 MONTHS NOT SIX
If you ask for them within five months of the end of the accounting
year, they must provide accountant certified, but not necessarily
audited, accounts by the six months. If you ask for them after that,
they have one month to comply. If you are not satisfied when you
receive them, you have a right to see the original invoices, etc.,
within another month.
We usually each pay £750 a year - this has been the same for years.
If the lease does not make this figure variable:

------------------------------------------------------------------------

No modern lease is going to do otherwise. It would be impossible to
maintain a building if costs weren't collectable on an "as incurred" basis.

tim
 
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D

David Woolley

tim.... said:
If the lease does not make this figure variable:
Probably true of long leases, but the legislation is not restricted to
them. Most short leases only have rent, from which the maintenance
costs must be taken, but could have variable service charges as well. I
suspect a fixed charge would be treated as rent by another name.

Long leases can also have high rents, but the only case I know of in any
detail (having researched it in relation to another tenant) are part
"ownership" schemes, for flats, which seem to pass on the service
charges of the head lease.

One of the problems of shorthold leases not having variable service
charges is that there is no incentive on the tenants to minimise costs.

In the OP's context, the fact that the service charge hasn't been
modified to reflect reduced costs is an indication that it is being
mis-managed.
 

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