Please advise on RMG and P. D. Collection

[LLedell]

Hello All,

I've looked at various posts here but can't find a similar case, hence my question.

I'm a freehold owner of a property managed by RMGLiving, unfortunately.

The yearly payment had a due date at the end of Aug 2022. On the due date, they added a reminder fee and a month+ later administration fee.
I hardly ever log in to the RMGL portal, emails went straight to the archive folder and I missed them.

RMG has instructed PropertyDebtCollection ltd in relation to outstanding arrears.
PDC has topped the amount by 250+ and they say that the account has been passed to them and all communication must be with PDS and not Mgmt Company.
This charge seems to me way too high, not something that I can easily afford.

I have paid the service charge and mentioned fees to RMG and the balance on their website is now cleared.


This is very worrying to me, could you please advise on what should I do next to resolve the situation?

[R0b]

It's likely there will be something in your agreement on service charges that if you fail to pay they will pass to a debt collection agency and you agree to pay any fees incurred by the management company for chasing the debt.

If you paid the fees before they were instructed, I don't see how you can be responsible. If you paid after, then query the costs as I'm assuming they've only just sent a letter which is a template letter they send out to everyone. They may say the costs are attributed to setting up the account, reviewing the file, sending the letter etc. but I would agree the £250 fee would seem to be high for one routine letter.

They may take you to court for those fees, but up to you if you defend them and challenge it and depending on the wording of the terms, RMGL/PDC may need to provide evidence of what the contract says on fees and whether they are reasonable. I have seen a fair few contracts that stipulate the cost of sending recovery letters at like £10 or £20 and then further action incurs further sums as time goes on.

[LLedell]

Thanks, Rob!
I paid before I received the letter from PDC but after it was printed based on the date on the letter.
I was looking at the limited paperwork I have from RMG, anything specific I should be looking at?

[R0b]

There has to be something on the paperwork but I am not sure it would come from RMG. You would or should have been made aware of these service charges as part of the freehold purchase so check your title deeds, the report on title from your conveyancer or some other documentation that will make a reference to service charges or sometimes called estate charges if you own a freehold on a housing estate.

Somewhere in the paperwork it will say you agree to pay charges on demand and on an annual or whatever basis the payments are agreed and then there might be something around non-payment. If it is silent then there is no absolute obligation to pay the charges from PDC but make sure you are absolutely certain before responding back otherwise you will look silly if they point out it is in your title deeds.

Anyway, you don't have a contractual relationship with PDC so I wouldn't be paying them directly, rather any costs or losses suffered should be payable to RMG, assuming they have suffered a loss at all since most of these debt collection agencies operate on a no-win no-fee scheme.

Check your paperwork first then let us know what you found and we can work out what options you have

[LLedell]

Rob, much appreciated.
So far I have read Transfer Titles - deed of covenant. Still going through the paper work looking for Estate Charges or other similar documents

Below are some bits that I found relevant. I hope someone will find time to read and advice.


Land Registry, Transfer of part of registered titles

Other Definitions:

• Management Company: xxx

The Transferee also covenants with the Transferor and as a separate covenant with the Management Company that the Transferee will pay in each relevant year the Management Charge in accordance with and as defined in the Schedule and will observe and perform the covenants on the part of the Transferee set out in the Schedule

The M.C. covenants with the Transferor and as a separate covenant with the Transferee for the benefit of Estate Common Parts (defined in the Schedule) and every part of it (subject to payment by the Transferee of the Management Charge) to perform the part of the M.C. set out in the schedule by its employees servants agents or other delegated independent contractors.

Declarations

• Other than matters dealt with through the Management Charge which are regulated by the provisions of the Schedule hereto the use of all Services party walls footpaths and any other things now or to be constructed by the Transferor intended for shared use by the Transferee and the owners of any other parts of the Estate is conditional on the Transferee paying a reasonable proportion of the costs incurred in their inspection maintenance and renewal by the Transferor or any person sharing their use and/or enjoyment and any dispute about the amount to be paid will be settled by the written certificate of an independent surveyor chosen by the Transferor and acting as an expert not as an arbitrator.

The Schedule
(the provisions in respect of the estate common parts, management and charge)

• "Management Charge" means the annual contribution payable by the Transferee under the provisions of this Schedule which shall be such proportion of the Management Expenditure as shall be certified (such certificate to be final and binding) annually by the Transferor or the Management Company or its managing agents as soon as reasonably practical after the end of the relevant Management Expenditure Year to which such certificate relates.
• "Management Expenditure" means all costs and expenses including the costs of calculation certification and Collection and if appropriate any professional and managing agents fees including all such reasonable amount by way of reserve for future expenditure as the Management Company shall consider reasonable for future expenditure incurred or (in relation to any such amounts by way of reserve) proposed to be incurred within any relevant Management Expenditure Year by the Transferor or the Management Company in relation to any of the matters mentioned in this Schedule and in particular clause 2
• "Management Expenditure Year" (MEY) means each calendar year to xxx or such other period as the M.C. specify in advance
• Mgmt Expenditure shall include (in addition to the matters previously mentioned in this Schedule) all costs and expense properly incurred (in relation to any amount paid by way of reserve) proposed to be incurred in any MEY in respect of the administration management use running supervision control and maintenance repair renewal and replacement of the estate common parts or any part thereof or in relation to or to facilitate the full proper enjoyment and use of the Estate Common Parts by the owners and includes (but is not limited to) the costs and expenses of the following items or such of them as may be applicable from time to time:
  • Maintenance, repairs, etc
  • Paying all rates taxes or other outgoings whatsoever payable in respect of M.C.

Transferee Covenants

• to pay the MC on xxx or such other dates as the Management Company shall specify a sum reasonably specified by the MC in advance and on account of the Management Charge for the then current MEY
• To comply with the MC's Memorandum and Articles of Association at all times

M.C. Covenants

• The Management Company shall certify annually as soon as reasonably practical after the end of each MEY to which such certificate relates (such certificate to be conclusive as between the relevant parties in respect of matters so certified) the total management expenditure incurred and shall also make available for inspection or by public notice a fair summary of the expenditure to which it relates
• When such certification referred to in clause xx above shall be issued the MC shall provide an account for the Management Charge payable by the Transferee for that year credit being given for any advance payments made and the Transferee shall pay to the MC upon demand any balance payable or the MC shall allow (on account of further payments due) to the Transferee that amount by which the Transferee has overpaid as the case may require
• Subject to the payment of the Mgmt charge by the Transferee the MC shall permit access to those parts of the Estate Common Parts which serve or are otherwise used as appropriate for the enjoyment of the Property by the Transferee and his licensees and visitors and occupiers from time to time of the Property provided that the Transferor or the MC shall be entitled to restrict such access as is appropriate at its sole discretion during the progress of building works or development on the Estate Common Parts or any part thereof
• To promptly on demand give the certificate required by the restriction at clause xxx if the transferee, lessee or other disponee shall first have complied with the provisions of this Schedule to this Transfer
• To manage the Estate Common Parts in accordance with the scheme of management set out in this Schedule and collect or enforce collection of the management charges from the Owners

[R0b]

Nothing in what you have posted suggests anything around the recovery of legal or debt collection fees.

I would be inclined to politely write to them and tell them that the management charge was already paid to the management company before you received the letter from PDC so as far as you are concerned, there are no monies outstanding. Furthermore, you are not legally required to pay PDC any additional sum of money since your obligation and only liability is limited to the payment of the management charge per your title deeds. In any event, you have no legal relationship with PDC and so their demand for an additional £250 is irrecoverable.

It's possible PDC may try and take legal action against you to recover their fees but the problem with that is you have no relationship with them contractual or otherwise. Any action would have to be taken by the MC against for losses suffered and incurred for this alleged £250 but they will need to justify the expense and how they arrived at £250 which appears to be an arbitrary figure considering they have only sent out 1 template letter to you.

Up to you how you want to approach it but I think you have decent grounds to dispute PDC charges. Once you respond, the ball is back in their court and if they continue to send you letters or demands, you may want to threaten them with harassment should they continue and that might but a blocker on them contacting you further.