Overpayment of Service Charge on previous house

[mrsd1]

Hi there,

Just wondering if anyone can help.

We moved into our previous house in 2011. We paid a management company each year for the communal service charge as instructed. Not an issue. However, when we were in the process of selling in 2015, our solicitor found that the accounts for the previous four years had not been completed and filed by the management company. We were advised that our buyers wanted to hold a retainer of £200 in case of an underpayment, which we agreed to. Just before we exchanged contracts, the management company emailed to advise that for the first year (2011-2012), we had actually OVERPAID them by £144.45. Following this, we emailed them the following:

 

-----------------------------------------------

From: *****

Sent: 08 June 2015 18:08

To: *****

Subject: Ref ******

 

Good afternoon ****,

 

I have received communication from you regarding a credit to my account for the period 06/07/2011 - 30/06/2012 to the value of £144.45.

 

As the charges for each year are paid in advance, I would not like this credit applied to any future bill, instead I would like to receive the amount direct to myself in form of a cheque or bank transfer, due to the fact that I have sold the above property and will be moving at the end of this month.

 

Please can you confirm that this will be actioned as per my request, and the same applied to any further credits that may be due for any charges up until 30th June 2015.

 

I look forward to hearing from you. I can be contacted via this email or on the mobile number below.

 

Regards

******

 

------------------------------------------------------

 

The management company then replied with the following stating that once ALL years accounts were finalised, they would return any overpayments to us:

 

On Tuesday, 16 June 2015, *********** wrote:

Good Morning

 

Thank you for your email

 

I note your below instruction however at this stage the credit it unable to be returned to yourself. Any overall credits can of course be returned to yourself following the production of all outstanding accounts.

 

Kind regards

 

 

**********- MIRPM AssocRICS

Acting Branch Manager, Estate Management

 

-------------------------------------------------

 

We have since been advised by our solicitor that the overpayments are for the following amounts:

 

2011-2012 - £144.45

2012-2013 - £185.41

2013-2014 - £110.83

2014-2015 - £83.80

 

Total overpaid - £524.49

 

However, the management company have gone against what they have agreed to and credited the accounts, meaning the buyers have now had this money and they are refusing to refund us.

Our solicitor has not been overly helpful and the management company have now said they won't speak to us as we are no longer the owners of the house.

 

What rights do we have? Are we able to fight this in small claims?

 

Any know how would be good.

Thanks in advance.

[martin2006]

Not an area im clued up in but i will flag it

[mikeymack2002]

Any monies owed to you should be paid to you, other options are the legal route to recover the amount owed plus interest...

[ericsbrother]

when did you/they realise the error, before you sold or afterwards? Put simply, if before it is your money, if afterwards it goes with the property. This is not absolute but generally the conveyancing has wording that say the property is sold with all rights and encumbrances so if it was the other way round and you owed the management co then the buyers pick up the tab.

[mrsd1]

when did you/they realise the error, before you sold or afterwards? Put simply, if before it is your money, if afterwards it goes with the property. This is not absolute but generally the conveyancing has wording that say the property is sold with all rights and encumbrances so if it was the other way round and you owed the management co then the buyers pick up the tab.

 

They informed us before we sold of the first overpayment from the first year's accounts. We then advised them that we would be moving and that that and any further overpayments should be sent to us via cheque or bank transfer and NOT to be credited to the account, and they replied saying they noted our instruction. They then just credited the account once they had completed their accounts (two years worth in November, which is when we started trying to fight for the money but have hit a brick wall).

The buyer had specifically asked for a retainer of £200 to be held in the event of an underpayment, which we agreed to (and which we are still waiting to be returned to us), as we were all well aware that the management company had not completed any accounts since 2011 before the sale completed.

[mrsd1]

Can I bump this to see if anyone knows?

[martin2006]

Letter before action giving them 14 days to cough up, if they dont, issue a claim via mcol

[andydd]

I agree with Martin, issue a court claim for overpaid amounts plus 8% interest.

 

I did this against my freeholder and got it all back for overpaid amounts.

 

There is a special court for dealing with service charge issues (First Tier Tribunal - FTT previously LVT) however Id avoid this if I were you and start a claim at count court, it may possibly be transferred to FTT and you cant do anything about that.

 

There may possibly be added complexity here in that the service charge account is a single account that just gets assigned to different freeholders and leaseholders over the years, its possible for example to buy a LH property and find yourself liable for previous owners debts, your situation is reverse and it may be tyat as you are no longer leaseholder you have no right to this overpaid amount ??

[mrsd1]

I agree with Martin, issue a court claim for overpaid amounts plus 8% interest.

 

I did this against my freeholder and got it all back for overpaid amounts.

 

There is a special court for dealing with service charge issues (First Tier Tribunal - FTT previously LVT) however Id avoid this if I were you and start a claim at count court, it may possibly be transferred to FTT and you cant do anything about that.

 

There may possibly be added complexity here in that the service charge account is a single account that just gets assigned to different freeholders and leaseholders over the years, its possible for example to buy a LH property and find yourself liable for previous owners debts, your situation is reverse and it may be tyat as you are no longer leaseholder you have no right to this overpaid amount ??

 

That's what we are wondering, but as the buyers knew the fees paid were an estimate, and they had asked for a retainer in case of an underpayment, and that we had asked the management company before we moved to pay us directly and not credit the account, and they agreed to it, would this go in our favour?

 

With small claims, if we did not successfully claim, would we have to pay any court costs for the management company? Just wondering whether it is worth pursuing really.

[martin2006]

In small claims you can recover court costs.

 

Dud they agree in writing to refund the overpayment or over the phone?

[andydd]

There are no costs in small claims so if you lost you'd only be liable for court fees of other side.

 

It's gets confusing in that some leases allow freeholder of management to recover costs as lease term BUT you are no longer party to the lease.

 

I think if you can show written agreement to repay you when you were leaseholder would be good evidence. You may want to do a bit of research.

 

Have you written to manage company ? What did they say ?

[ericsbrother]

If you have evidence of requesting the refund then you are home and dry regarding a claim. With regard to the retainer, your solicitor should have made sure that this was sorted out before they sent you a final bill so ask them what they are playing at and again use their response to make a decision on whether to add this amount to your claim from management co.

Agree with looking at terms of lease though, best be sure before you put pen to paper. The management co may have no rights whatsoever and that will be determined by the lease conditions.

[andydd]

Yes if you can show an agreement to refund then thats the evidence to use. They said they would, they havnt, hey presto you should win

[mrsd1]

Hi there,

 

Just checking, I am about to send my letter of action to them prior to taking to small claims. Can I send an email or does it need to be an actual letter?

[andydd]

Use both, extra proof if they should claim they didnt receive it.

[mrsd1]

Just to provide an update - the letter before action worked. The management company had been taken over by another management company who reviewed all our files and the emails we had from the previous mgmt. company saying they would credit us, and they agreed to refund us. Just waiting on the money to be paid into our account now.

 

Success!!

 

Thanks for all the advice.

[andydd]

Grest news

[ericsbrother]

well, that will save them a few quid in legal fees and I dont dobt they would have just ignored you without the lba