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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10176
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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Good Morning, I own a flat that has an annual service charge.

Customer Question

Good Morning,
I own a flat that has an annual service charge. The facilities company that maintains the flats has changed many times and despite asking some of these companies for a breakdown of the payments they are requesting they have never provided this and then the my "debt" has been moved to the next company. Now the latest company has instructed a solicitor for to recover a the "debt" plus legal costs but still there is no details of the breakdown of the charges. I have funds to pay this debt in full but I am extremely frustrated that I am being requested to pay large sums of money without any information on what this money covers. Advice would be very much appreciated.
Submitted: 7 months ago.
Category: Law
Expert:  Aston Lawyer replied 7 months ago.
Hi,Thanks for your enquiry.If the Lease covers what items the Landlord can claim service charge which there will be),there is only one legal circumstance under which a leaseholder can withhold a service charge payment and that is where a summary of rights and obligations has not been provided along with the demand. If a summary of rights and obligations has been provided and a leaseholder then decides to withhold payment, the landlord could take court action. A court can determine whether a charge has been reasonably incurred or not and could transfer the case to the Leasehold Valuation Tribunal for a decision.If a leaseholder withholds a service charge payment they could be threatened with forfeiture by the landlord. Effectively, this means the landlord could obtain a court order taking the property back from the leaseholder. A landlord could only contemplate this action if the amount of service charge owing is more than £350 or for any amount if it has been outstanding for more than 3 years. In a situation where the amount of the service charge has not been agreed by the leaseholder, the LVT or a court must determine the amount.A landlord might waive the right to forfeiture if, in the case of a leaseholder breaching the lease by not paying the service charge, they otherwise treat the lease as valid by, eg, demanding ground rent or other service charges. You should seek specialist advice in such a situation.Therefore, the service charge demand does NOT have to include a breakdown on what costs have been incurred. However, Leaseholders have a right to request a summary of service charge costs incurred in relation to the last 12 month accounting period, which is usually specified in the lease. If there is no accounting period specified in the lease then it will be in relation to the preceding 12 months from the date of the request. Leaseholders also have a right to request inspection of relevant documents relating to that summary. Leaseholders have a right to obtain a management audit or appoint a surveyor to consider the accounts relating to the management of their building. All requests must be in writing.There is no right to audited accounts unless the lease contains a provision for this.I hope this assists and sets out the legal position to you.Kind RegardsAl
Customer: replied 7 months ago.
Thanks. Do I understand this correctly?The fact the maintenance company has changed numerous times and none of these companies have provided details of what the annual maintenance charge consists of is not relevant. Each company can just request I pay a total sum without any details and pass any unpaid debt to the next company?The solicitors letter is the first contact I have had in nearly two years as I had no notification that the maintenance company had changed again. I contacted the last company I request details of my account and they replied saying they no longer managed the building without passing any further details. I have never received details of right and obligations from the current company so I can legally withhold payment?I do not agree with the sum being requested from me so I can reply to the solicitor stating this fact and that this is another reason why I will withhold payment?I can request to see a summary of service charge costs for the last 12 months and inspect relevant documents?Thanks
Paul
Expert:  Aston Lawyer replied 7 months ago.
Hi Paul,Thanks for your reply.I appreciate it sounds as if the running of the Building has been a shambles, with different Companies taking over at various stages, and it would have been good practice for them to notify you accordingly. Likewise, it is good practice for each resident to be provided with a copy of the Accounts each year, showing what sums have been spent where.From a legal point of view, the mismanagement alone would not be a valid reason for you withholding payment. However, as you have never received the summary of rights and obligations, you are perfectly entitled to withhold payment.Likewise, if I were you, I would be writing to request a summary of the service charges, which they are legally obliged to provide to you, upon receipt of such a request.I hope this clarifies the position.Good luck!Kind RegardsAl

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