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Service Charges Dispute

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  • Service Charges Dispute

    Eighteen months ago nine of our fellow leaseholders purchased the Freehold of the estate under Right of First Refusal. They retained the services of a managing agent which the previous landlord had used.
    In 2022 service charge for Building & Parking Spaces the forecast has increased from about £22,500 in 2021, to approx. £60,000. Half of the new demand is described as Major Project Works (MPW).
    There are 17 leasehold units; 16 owners (one owns two) - 9 are 'members' of the FH company, leaving 7 non-Freehold sharing leaseholders, like me.
    The Managing Agents have served ONE Section 20 Notice in relation to MPW for redecoration to one of three communal entrance hallways - likely cost of £3,500 max. They have been extremely vague about what the rest of the MPW demand is for; bearing in mind that the basic service charge for the year has already been upped by 30% over last year.
    We - that is the Non-Freehold Sharing Tenants, have formed an informal TENANTS ASSOCIATION. Lease Advice have said we cannot (yet) apply to First Tier Tribunal but we are obliged to pay these disproportionate demands for works which have not been made clear - the billing arrived on 31 January and FOUR MONTHS later we still have no idea what we have paid 'on account' for.
    The leasehold ' estate' comprises two Listed Grade II buildings, converted/restored into the 17 units, by a reputable, major quality house builder in 2013. They won THREE National construction industry awards for their development of the Victorian building, a former community hospital.
    My question is, do we ( the Tenants Association) have any legal options - in terms of taking legal proceedings in order to get our money returned/reimbursed - if we believe the money they have demanded ( which according to the Lease we have to pay) a) cannot be justified because some of the 'work is unnecessary'; b) they have been given £17,500 by the previous Landlord to cover some outstanding works
    that they have not yet completed!; c) we tenants have been paying into reserve funds since 2014 which should cover any works that they now claim needs doing.
    The other factor is that 3/4 of the Non-Freehold Sharing Leaseholders will struggle to meet the scale of the new Buildings service charges ( there are two other service charges).
    Any thoughts? We'll be very appreciative of any inputs as this is a stressful and worrying predicament for the Tenants Association members. Many thanks in anticipation! Norfenian007....
    Tags: None

  • #2
    Sorry about your problems.
    I can give some help about people with difficulty paying we have had a similar problem.
    Look up Garside v R.Y.A. This case was decided on appeal so has particular strength. It found that if work can be staged without detriment then leaseholders financial situation should be taken into account. However, simply being unable to pay by itself does not justify not paying.
    I suggest making your unofficial group more formal. Perhaps a WhatsApp group for communication. This would hopefully avoid misunderstandings.
    Good to use services of Lease. I would ask by email. I always found it more useful.
    Finally have a look at LandlordZone forum. Not just for landlords and there is a longleasehold forum. There are some very knowledgeable people on it and obviously is specia

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    • #3
      Were you referring to Garside v RFYC? (https://www.bailii.org/cgi-bin/forma...query=(Garside))

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      • #4
        Thanks. Apologies. In my younger days did a bit of sailing so the R and Y blurred ! Giving the link very helpful. I don't know how.

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