More than 120% penalty after late payment for building service charge

[jc114]

Hello all,

I have unfortunately needed to pay for my building service charge amounting to £814 seven weeks late after due date due to cashflow problem the month before, and my building management has passed my case onto their appointed DCA.

I have received a letter by post, the full outstanding has already been settled prior to the letter reached my letter box. However, in the letter received from the DCA, my bill has now increased to more than doubled from £814 to over £1813.

The invoice was broke down into a few extras, including interest of £19, admin charge of £300, breach of lease fee of £162 and a DCA prelegal cost of £518.

I have emailed both building management and DCA to explain the situation and to negotiate to waive the additional charges, but was given the same invoice again without going anywhere, and they now demand me for an additional £999 within next 7days or else they will continue with the action.


May I please ask a few questions with regards to my right on this matter?

• Am I entitled to any rights at all in negotiating for these additional charges as these sound disproportionately excessive to me.

• As the amount has already been fully settled to the building management account before the date on the letter, who should I be negotiating with now? the DCA or the building management? I get the impression that the building management does not reply on purpose and have passed on all the correspondence to the DCA, in which they have only one job to do, that's to recover the amount on behalf of building management. How could the negotiations can be done more effectively?

In all honesty Im happy to pay a portion of the charges that could justify the amount/time delayed more reasonably. Therefore may I please seek for some valuable advices before continuing with the negotiations with the building management/DCA?

Many thanks.

[echat11]

Amend / send a dispute letter to the building management company and the DCA. Send it Recorded Delivery.

https://nationaldebtline.org/get-inf...iability-debt/

Also you should make a Subject Access Request to the building management company and the DCA. The letter can go in the same envelope.

https://legalbeagles.org/library/gui...ccess-request/

Go through the Terms and Conditions of your agreement, there should be a mechanism for resolving disputes, mediation etc.

You might want to look at maintenance charges as they need to be 'reasonable'. Ask them for a 'breakdown'.

https://www.lease-advice.org/advice-...-other-issues/

[jc114]

Amend / send a dispute letter to the building management company and the DCA. Send it Recorded Delivery.

https://nationaldebtline.org/get-inf...iability-debt/

Also you should make a Subject Access Request to the building management company and the DCA. The letter can go in the same envelope.

https://legalbeagles.org/library/gui...ccess-request/

Go through the Terms and Conditions of your agreement, there should be a mechanism for resolving disputes, mediation etc.

You might want to look at maintenance charges as they need to be 'reasonable'. Ask them for a 'breakdown'.

https://www.lease-advice.org/advice-...-other-issues/

Thank you very much for all the info.
As they are demanding for payment in 7days from their last email, may I please ask if I am under any rights, or as a general norm, able to demand more time to read thru and prepare any response?
Thanks

[echat11]

The DCA will be a member of an association, it will be on their website. So the DCA has to abide by those guidelines.
The guidelines will state, that were a dispute is raised then the creditor / DCA should give the debtor more time to get
advice and seek information. Look up the DCA's regulator. Then you can put that in your letter.

[jc114]

The DCA will be a member of an association, it will be on their website. So the DCA has to abide by those guidelines.
The guidelines will state, that were a dispute is raised then the creditor / DCA should give the debtor more time to get
advice and seek information. Look up the DCA's regulator. Then you can put that in your letter.

Thank you for the information

I have gone thru the lease guide link above, it stated that:

---------------------------------------------
Administration charge are defined in the 2002 act as ‘an amount payable by a tenant as part of or in addition to rent, which is payable directly or indirectly for:

costs arising from non-payment of a sum due to the landlord;
costs arising in connection with a breach (or alleged breach) of the lease.’

In some cases, your lease may also allow your landlord to recover from you legal costs arising as a result of court action or a tribunal decision. These costs may arise as a result of you:

failing to pay an amount that was due to the landlord; or
breaking (or allegedly breaking) the terms of the lease.
If the costs result from one of the situations listed above, they will be classed as an administration charge
---------------------------------------------

As they are now trying to charge me Administration charge PLUS legal cost and breach of lease fee as separate items. Based on the above, I believed it does form some valid arguments for a dispute in reducing the excessive bill.

However, I now have a dilemma that I wish to seek for some further advice please.

Some suggest that even if I file a dispute, I should be settling the bill first (within the 7days deadline in my case), but do it on the basis that it is pay under protest, because if I do not, I may end up with additional cost being applied to my existing bill. But on the other hand, once full/partial payment is made under protest, it would seem to be nearly impossible to recover it back.

Would it be a sensible choice that I file a dispute, and at the same time pay the part that I feel "reasonable" under protest, this way I can demonstrate that I have observed the deadline with intention to resolve the matter, but at the same time to minimise my risk of not recovering the amount paid?

Thank you again ❤

[echat11]

Thank you for the information

I have gone thru the lease guide link above, it stated that:

---------------------------------------------
Administration charge are defined in the 2002 act as ‘an amount payable by a tenant as part of or in addition to rent, which is payable directly or indirectly for:

costs arising from non-payment of a sum due to the landlord;
costs arising in connection with a breach (or alleged breach) of the lease.’

In some cases, your lease may also allow your landlord to recover from you legal costs arising as a result of court action or a tribunal decision. These costs may arise as a result of you:

failing to pay an amount that was due to the landlord; or
breaking (or allegedly breaking) the terms of the lease.
If the costs result from one of the situations listed above, they will be classed as an administration charge
---------------------------------------------

As they are now trying to charge me Administration charge PLUS legal cost and breach of lease fee as separate items. Based on the above, I believed it does form some valid arguments for a dispute in reducing the excessive bill.

However, I now have a dilemma that I wish to seek for some further advice please.

Some suggest that even if I file a dispute, I should be settling the bill first (within the 7days deadline in my case), but do it on the basis that it is pay under protest, because if I do not, I may end up with additional cost being applied to my existing bill. But on the other hand, once full/partial payment is made under protest, it would seem to be nearly impossible to recover it back.

Would it be a sensible choice that I file a dispute, and at the same time pay the part that I feel "reasonable" under protest, this way I can demonstrate that I have observed the deadline with intention to resolve the matter, but at the same time to minimise my risk of not recovering the amount paid?

Thank you again ❤

'Would it be a sensible choice that I file a dispute, and at the same time pay the part that I feel "reasonable" under protest, this way I can demonstrate that I have observed the deadline with intention to resolve the matter, but at the same time to minimise my risk of not recovering the amount paid?'

That sounds like a plan, but make sure they are fully aware that the payment is made under 'protest', it might get a two way 'dialogue' started.

[jc114]

'Would it be a sensible choice that I file a dispute, and at the same time pay the part that I feel "reasonable" under protest, this way I can demonstrate that I have observed the deadline with intention to resolve the matter, but at the same time to minimise my risk of not recovering the amount paid?'

That sounds like a plan, but make sure they are fully aware that the payment is made under 'protest', it might get a two way 'dialogue' started.

A quick case update

It has been a month since my dispute was submitted together with a Subject access request and a partial payment made under protest.

I have requested in the SAR specifying for a breakdown of the alleged admin charge, however what I have been sent are pretty much just the email correspondences and past invoices that I already have in hand, my request for the breakdown of this particular admin charge was not addressed.
The reason why I was requesting for a breakdown was because the lease has specified that the tenant has to pay to the manager the “cost/expenses” of of collecting arrears/breach of the Tenant's covenants, my view was that the “cost/expenses” cannot be properly justified if a breakdown is not provided and hence unreasonable.

From the SAR package provided, I have also been sent an email conversation history between the estate management and DCA on my dispute case, I could see the DCA showed a tendency to settle (seems normal in order to cash out profit?) by asking if estate management is willing to reduce/waive the admin charge based on my dispute and they will then reduce the legal cost to settle, but estate management is not willing to reduce and deny the charge being unreasonable.

Apart from the SAR package received, I have not heard back on anything else for the past month, not sure if I should lodge a complaint with regards to the SAR not directly addressing the request so to also act as a follow up or I will be at better position to wait till I hear back from them before deciding on the next action?

Thank you.

[echat11]

I would contact the ICO, they haven't fulfilled your SAR request. The ICO may say you need to request it again, before you can lodge a complaint with them.

[jc114]

Hello all, I have a quick case update on this matter and I am hoping to get some valuable advice for my next step forward please.

Here is an event timeline:
Original Sum: £814 service charge arose from estate management year end ac adjustment.
Last payment reminder received 16/4/2025, payment made 20/5/2025.

21/5/2025	FROM DCA: Letter before action	Asking for: Original sum of £814, Admin fee from Estate Mgt £300, Interest £19, Legal cost £398, Ground rent £162, Ground rent legal cost £120, Totalling of £1813
10/06/2025	TO DCA and estate management (via post and email) Dispute Letter, Subject access request Payment under protest	Original Amount £814 has been settled in full direct to estate management Disputed all other costs asked for, paid for (under protest) £82 out of the £300 admin charge asked for Arguments of dispute: No Admin charge invoice served (due to my account being put on breach status) Admin charge is not reasonable Anything other than admin charge asked for by the DCA is outside of the lease Potential incompliance of Pre-Action Protocol by DCA (e.g. not supplying enough documents & asked to pay within 7 days) Lease clause has specified only relevant cost/expense is payable in relation to arrears/breach of lease, hence requesting a breakdown that correspond to the cost/expenses of the £300 admin charge SAR requested specifically: Breakdown of the £300 admin charge Any invoices I might have missed
24/6/2025	FROM DCA: SAR received
10/7/2025	FROM Est Mgt SAR received	An email conversation between Estate Management and DCA has been included in the SAR sent (might be by mistake), the email confirmed apart from the reminder letters, no proper invoice is served for the £300 admin charge, due to my account being put on breach status at the time and so not receiving any correspondence. Same email conversation also shows DCA willing to reduce to settle, but estate management refused. An invoice of the £300 admin charge has been found within the SAR package, but I don’t think it can be regarded as being served as SAR is clearly not for the purpose of requesting for payment
15/7/2025	FROM DCA: Respond to 10/6 dispute	Tried to explain that pre-Action Protocol for Debt Claims does not strictly apply to service charge debts, and they only seek to comply with the spirit of the Practice direction etc. Explained Ground rent of £162 as “landlords admin fee” in order to put account on breach etc. Reduced their legal fee by 30% to £362 Attached the payment reminders (not invoice) that Est Mgt served Totalling reduced to £762 instead of the previous £917
22/7/2025	TO DCA and estate management (via email) 2nd Dispute Letter, 2nd Subject access request	Responded to DCA to reiterate the followings main points in the dispute letter: Pre-Action Protocol applies to all businesses, only the court can decide if this has been/have to be complied Lease specified only cost/expenses but not a flat amount that they can apply arbitrarily, and hence requested again for a corresponding breakdown All other costs apart from the admin charge are not in the lease and hence I am not legally liable SAR resubmitted for the same purpose
29/08/2025	FROM DCA: Respond to 22/7 dispute	Insisted the correspondence sent serve as demands for the outstanding debt and administration charges and are compliant with the Commonhold and Leasehold Reform Act 2002. Nothing addressed to other points previously made “Invited” me to accept the settlement sum of £762 (worth noting that they stopped asking to pay within 7 days)
02/09/2025	TO DCA and estate management (via email) 3rd Dispute Letter	Mainly to reiterate the followings: No further comments as to whether Pre-Action Protocol is complied, but documented for future reference if needed. Without breakdown that correspond to cost/expense, it is not possible to access for reasonableness of the alleged £300 admin charge Quoted directly from the previous attachment that DCA claimed to be served upon me and compare them with the s47 of landlord and tenant act & schedule 11 of common and leasehold reform act 2002, to proof for incompliance Requested again for a proper compliant invoice with landlords details and summary of rights and obligation AND a breakdown of the £300 corresponding to cost/expenses All other costs asked for apart from the admin charge remained outside of the lease and hence not legally liable
14/10/2025	FROM estate management: (NOT DCA)	My property portal account and correspondence at this point, looks to be all unlocked from breach status, and believed to have No DCA involved from this point. Attached a letter explaining that account previously put on breach status, and hence no correspondence received Also attached statements (still not a proper invoice not sure why), asking to pay for remaining £218 (£300 - £82 previously paid on protest)
16/10/2025	TO estate management: (NOT DCA) Payment under protest	Replied to the emailed from Estate management basically on the previous same points, asking for a compliant admin charge invoice to be supplied and a breakdown of the £300 admin charge correspond to the cost/expense as mentioned in the lease At the same time, paid the rest of the £218 under protest (i.e. the £300 admin charge has now been settled, under protest) Requested for acknowledgement of Payment under protest and supply the requested document OR explain why these cannot be provided OR refund the £300 admin charge within reasonable time
29/10/2025	FROM Estate Mgt: (NOT DCA) Service charge Invoice	A new statement attached showing the £218 paid under protest is booked in, and a new invoice has now been raised totalling of £362 Item description as: Recharge DCA Fees This invoice comply with the requirements but the charge is in the form of service charge, but not administration charge. No breakdown has been supplied

Apology for the lengthy timeline to date.

My speculations on the reason why DCA has withdrawn from the case and refer it back to the estate management may either due to some valid points raised from my end which they cannot really provide an answer for, or the cost from them in pursuing this amount is no longer proportionate needing to respond to multiple disputes.

It looks like the situation now is leaving myself and the estate management, in which I do not think the estate management is interested in/be able to provide me with a breakdown to the £300 admin charge. I even think they just apply it as a flat penalty, which I do not find anywhere in the lease that has permitted it (only cost/expenses which were allowed when in relation to arrear).

My position was clear from the dispute letter that I will review the £300 admin charge and consider admitting it when I receive the proper invoice and a breakdown to cost/expenses, but since I now continue to receive new “Recharge” bills even when the £300 Admin charge has been paid (under protest), I think I would rather initiate some actions from my end instead of passively waiting things to happen as they don’t seem to show any tendency in replying anyway and I do not have an idea as to how much more they will still ask for on this same matter.

I am now looking to exercise my right to submit an application to the First-tier Tribunal (and apply for Section 20c to prevent passing of the legal costs). I believe by actioning this, estate management will have no excuses in not replying to the matter and to discuss with me? And from there I believe there are still a lot of options for both parties to settle before proceeding to the actual hearing? Any other suggestions that you can please let me know so I do not miss anything vital that could put myself in a bad position or at a new risk in getting even more charges from there?

Thank you for your time and patience on reading all these and I look forward to hearing your valuable advice