I have been told that my development of leasehold flats needs new windows and other works, and that my service charge contribution towards the cost will be more than £14,000, with half of that amount required within a fortnight.
We are asked to make such large payments without being given any prior notice, and we don’t know what the amount is for. EB
Flat owner is asked for £15,000 by their property management company for new windows
MailOnline Property expert Myra Butterworth replies: As is often the case with such disputes, your lease is king. You should carefully read the terms of your lease as it may contain requirements that you, as your freeholder, must comply with.
It seems that this is the case. You have no excuse not to comply with the request you were made.
Keep in touch with your freeholder to discuss the terms of the lease and to present alternative quotations that show it’s possible to complete the work for a lesser cost.
Stephen Gold (ex-judge and author) explains: You have been sent a service charge demand – euphemistically called an application for payment – for £8,005.17 to be paid within 14 days and so time was up on November 5 this year.
That is roughly one half of the amount you are being required to pay for the current service charge year, which is £16,059 and not £14,600 as you had thought.
Does the payment request have to be valid
Your landlord must, via the managing agent or other representative, have adhered to your lease’s terms during the period leading up to the demand. The demand may be invalidated if the landlord fails to comply.
This principle is not affected by the fact that management functions may be exercised in Right to Manage corporations. After recovering from shock, the person who is requesting a lease must always call the leasing company first.
The landlord must calculate the service fee at the “beginning of June” before the year begins. In your instance, the landlord should have calculated the service charge at least five months prior to notifying you.
Even though the lease doesn’t specifically state so, it is implied that the calculation would be done and it would be sent to you within a reasonable time.
To determine if the figure quoted by the agent is unreasonable or too high, you can get alternative quotes for windows
This exercise is designed to give you as much time and flexibility as possible to organize your finances so you can settle any demand.
Your demand came almost five months after lease calculation deadline. It also occurred nearly two months before the first service charge year.
The demand is void if you fail to comply with the calculations as required by the lease.
Do the reasonableness and other tests pass?
All expenses that are not covered by the request must be paid.
Stephen Gold, a former judge and author is now retired
All works or services should have been completed to an acceptable standard.
These charges must not exceed reasonable amounts. If the landlord fails to meet these conditions, the demand may be challenged solely on this ground, and not the validity.
The unreasonableness of the demand would not cause it to cease in all its entirety, but it would decrease it enough that it reflects the full extent of it.
For example, you say that windows don’t need to be replaced, but that they can be fixed. The agents claim that smaller businesses, which may have been more affordable, declined the contract as it was too expensive for them.
It is a good idea to join forces with your co-tenants and get quotes from others. If the estimates are lower than the budgeted by agents, you can use that information to prove the agent’s estimate unreasonable and excessive. You can ask a building inspector to evaluate the figure of an agent if other companies won’t cooperate. However, before you grant permission to the surveyor for any work, get a quote.
Next, contact agents to request that they withdraw the demand for non-compliance with lease. They will calculate the service fee and notify you of it by June 2021.
You inform them, but not to the exclusion of your claim that their demand is null, that you need (1) copies all of their requests for quotations and (where requests were made verbally), the names and addresses the contractors contacted and (2) copies all received quotes.
What if they persist?
The demand can be challenged by you applying to the First-Tier Tribunal. Once the agents have received your correspondence and have provided comparable quotes, you will have a better chance of succeeding.
You and your cotenants should then take the most up-to date paperwork to a solicitor. They will be able to give you advice regarding the strength and weakness of your arguments.
Sometimes, solicitors are willing to help with a specific aspect of a dispute but not the whole thing. This is called “unbundling”.
You can also ask your barrister, who works directly with the client and has no solicitor involved – many do. They will advise you on the same basis.
One can be found online by doing a search for “direct access landlord/tenant barrister”.
Although this advice is not expensive from a barrister or solicitor, it’s worth getting a quote.
If the cost is beyond the reach of the group, Citizens Advice should offer free advice.
It would be more convenient to file your tribunal application to challenge the landlord than to have him sue you at the county court. This is because the lease contains a provision that the landlord can charge you for the cost of collecting the service fee.
But, it is possible that the terms of the lease could allow the landlord (win or lose) to include its costs in opposing the tribunal case into its service charges. All tenants must contribute to these fees. To prevent the landlord’s conduct, you can petition the tribunal for yourself or your co-tenants.
If the agents threaten you with telling your mortgage lender you owe the amount demanded, and then add your bill to your account, you should tell them not to.
Stephen Gold is an ex judge and the author of “The Return of Breaking Law,” published by Bath Publishing. You can find more details about the service charges at breakinglaw.co.uk
