Problem with leasehold charges!

[johnny131070]

Hi, i have owned my flat since feb 2002. The owner of the management company is notorious for charging a fortune for various charges on the property. For example i have looked at previous years statements and have been charged for "terrorism insurance" and various other strange charges. My annual ground rent was around £1000 a year when i first moved in but some years it has been nearer £1500 and then we will get a huge bill for outside decoration when hardly anything ever has been done. To cut a long story short i now owe around £7000 as i stopped paying when i got a charge for £700 for the terrorism insurance. Well i have now received a letter stating that unless i come up with an acceptable proposal to clear the debt he will put me on "Notice" with my mortgage company. What does this mean and what does anyone suggest i do. I have a young son and a second child due any day now so i do not want to have a problem with the mortgage company if i can help it. Thanks in advance for any replies.

Edited November 16, 2009 by johnny131070

[90DC]

Would you be able to PM me details, breaking down the items on the previous statements and i will see if i can help you out. Otherwise i will consult a solicitor, but remember this is very costly. I will try and help you as much as possible, but i do believe this is dodgy.

[johnny131070]

Thank you 90DC. I have requested copy statements giving a full breakdown of charges because i also dont believe that he has supplied them as and when they became due.

[raydetinu]

The charges will be listed in your leasehold agreement, they cannot add any extras without explaining what they are for; also all charges must be reasonable and if you thought they were not you shoild challenge them at the time and ask for a breakdown. Insurance is one of them they cannot impose insurance on you, you jusy have to prove to them that you have adequate cover.

Have you thought of managing the property yourself together with other tennants; see leasehold reform act. LL cannot stop you doing that.

[johnny131070]

Thanks for the reply raydetinu, i am going to request a copy of the agreement and i will keep you posted. I have read about the leasehold reform act and i think i will investigate this further.

[NewSAHD]

You should be able to find assistance and support from the CAG forums and elsewhere. As 90DC has said, please feel free to send me a PM, or copy me in, as I should be able to assist too

[90DC]

Do you live in a building containing flats only? If the estate/building comprises of flats and houses the tenants cannot apply for rights to manage, that's all.

 

That's a good point raydetinu, i was also of the assumption that they cannot impose insurance on you. On the same point, did you arrange to pay the buildings insurance yourself or are they trying to cover this? If all the insurance costs are high with them, scout around a little, get buildings insurance and remember to serve a prescribed Notice of Cover to the management company within 14 days.

 

Hope this all makes sense, what are the terms in your lease. Have you read it top to bottom? Smallprint? If there's anything you don't understand i will do my best to help out.

 

Good luck with the second child!

[NewSAHD]

Been re-reading the various posts, hope the following is helpful.

 

Firstly, with regards Insurance, what happens next is decided by your lease.

 

They can only charge what the lease allows, but please be under no illusion, as they can impose charges on you if the lease allows. If the responsibility for Insurance rests with them then you need to consider what has been set out in the earlier links provided.

 

If you are unhappy with the insurance premiums then the LVT is open to you too.

 

If you are uncertain about this please post.

 

It would be helpful if you could clarify who "them" is for us too i.e. is it an Agent, a Freeholder, someone who lives at the block etc? Might be wise to keep that one to a PM

 

Your original message raises more questions than answers at present so hope the following helps too.

 

Hi, i have owned my flat since feb 2002. The owner of the management company is notorious for charging a fortune for various charges on the property. For example i have looked at previous years statements and have been charged for "terrorism insurance" and various other strange charges.

 

I'm sure the answer may be self-evident, but please can you confirm what makes you say "The owner of the management company is notorious for charging a fortune for various charges on the property." Might be wise to keep that one to a PM though!

 

How many flats in the block/building in which you live?

 

Is it purpose built, a conversion, part of mixed use site (residential and commercial)?

 

The landlord is required to provide summary accounts within certain timescales, detail is dependant on the number of flats. Please PM those who are posting here a copy of the most recent accounts that you have (or, at least, PM those who are willing to review!) although if we are to help we will need to go through each of the previous years too.

 

Hold off requesting these from the landlord until we have the facts from you though. There are reasons for not doing so, which can cover later.

 

My annual ground rent was around £1000 a year when i first moved in but some years it has been nearer £1500

 

Take it you mean Service Charge, of course, but do you pay a Ground Rent too?

 

If so, there are requirements that landlords have to follow before they are legally entitled to Ground Rent as well.

 

and then we will get a huge bill for outside decoration when hardly anything ever has been done.

 

Again, landlords are legally obliged to follow certain procedures ("s20 notices") before they are entitled to collect some or all of the monies demanded for decoration and works generally.

 

That's before questioning what is actually allowed under the terms of the lease, and before considering 'repairs v. improvements' i.e one is allowed, the other often not.

 

To cut a long story short i now owe around £7000 as i stopped paying when i got a charge for £700 for the terrorism insurance.

 

That's a LOT of money by anyone's standards, please can you set out (by way of a PM if you prefer) what is being demanded of you and the periods to which it relates.

 

Well i have now received a letter stating that unless i come up with an acceptable proposal to clear the debt he will put me on "Notice" with my mortgage company. What does this mean and what does anyone suggest i do.

 

Sounds like he may not know what's he doing, especially due to the large sum owing. Could be looking to bully you in to payment. We won't be clear on this until we know more from you.

 

Give us the facts (by PM if you prefer) and doubtless we will have more questions for you.

 

Let us know in advance the deadlines you are having to work to too and we can then comment further.

 

Also, in respect of the Mortgage Company, once we have heard from you and seen what needs to happen next then I would tend to drop a letter to the Mortgage Company. Let them know that you are in dispute with the Landlord, that you hope that it can be resolved amicably, but until they hear further from you they are not settle any demands made of them by the landlord without your prior written authority.

 

They should play ball with you and will then tend to refer the landlord to the LVT to determine if his/her costs are reasonable. You (and by that I mean us lot) need to quickly check your circumstances, to see what can be done for you, and whether you will need for more formal advice.

 

Get what information you can to us all here as soon as you can as the landlord may already be writing to the mortgage company anyway !

 

I have a young son and a second child due any day now so i do not want to have a problem with the mortgage company if i can help it. Thanks in advance for any replies.

 

All may not be lost

 

If the money is properly due then you need to take steps to settle. The building can only be properly run with your contributions being kept up to date. There are ways to help take the sting out of it too, but if the monies are not properly due then there are certainly steps you can take to protect yourself!

 

If all this sounds like a lot to take on board now please advise as to when the landlord's letter/demand expires, so we are clear as to the timescale we have to work within for you.

 

Look forward to hearing more from you - and good luck

Edited November 17, 2009 by NewSAHD