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Ash
Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I purchased a buy let apartment in a block of 20 other apartments

Resolved Question:

I purchased a buy let apartment in a block of 20 other apartments in December 2009.The maintenance of the block is carried out by a Management Company.The lease we signed contained the following clause "The tenants proportion means 4.59% of the service charge or such other percentage as the Management Company or Landlord (acting reasonably) shall consider to be fair and reasonable"
However what we didn't realise until now was that we have never been charged 4.59% but 6.54% and this was applied from the very first service charge request.
The Management claim that the 6.54% is our correct contribution as it is based on the square footage of the flat and this calculation applies to all the other flats in the block.We have never had any written or verbal notification that the service charge was being charged on a different percentage basis and assumed that the charge we were paying was 4.59% although we unfortunately never did the actual sums.The Management Company are now relying on the above clause saying they are acting reasonably.
Do we have any comeback.The difference over the period is £1650.
Terry McGuire
Submitted: 2 years ago.
Category: Property Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello Terry my name is ***** ***** I will help you with this.

Alex Watts :

I guess the question is, for their expenditure, has it been reasomable?

Alex Watts :

* reasonable *

Customer:

It is not really about their expenditure its about the amount we are being asked to contribute.Please see question.I want your opinion on whether despite the management Company signing the lease with a service charge contribution figure of 4.59% they have charged 6.29% from the beginning

Alex Watts :

Indeed. Have they said why 6.29% is being charged?

Alex Watts :

Or why that higher fee is reasonable?

Customer:

They are saying that the 6.29% is based on the square footage of the apartment which equates to 6.29% of the overall service charge payable.each flat makes a percentage contribution in accordance with the square footage of each.Our lease just says 4.54%.We were not informed on how the calculation was arrived at nor have we ever received any notification that the charge was in fact 6.29% not 4.54%

Alex Watts :

So there is no mention of the calculation anywhere in your lease?

Alex Watts :

Have they said it has always been like this?

Customer:

No the only reference is in the clause I highlighted in my main query.My flat was the last to be sold and they say that the 4.54% figure was a mistake and it should have been 6.29%.They are arguing that under this clause they are acting reasonably and can charge the 6.29%

Alex Watts :

Did your Solicitor not ask?

Customer:

No I assume because clause gave a specific figure

Alex Watts :

But then it also said as other % as may be reasonable. Did your Solicitor say why he/she did not ask?

Customer:

No and it was nearly five years ago its a bit difficult to check now.I think at the time we took the 4.59% at face value and any increase on that would have to be justified by the Management Company so I we weren't too concerned.

Alex Watts :

Ok. So its been like this since day 1?

Customer:

Yes the have charged the 6.29% from day one and as I say without any form of notification that they were actually charging 6.29%

Alex Watts :

OK. My view is that the contract allows for the higher charge, they seem to have a formula based on size and therefore the contract allows them to charge this.

Alex Watts :

However I think your Solicitor should have checked on this beforehand.

Alex Watts :

If your Solicitor did not potentially they are negligent. The clause is quite clear, 4.59% or such other charge as is reasonable.

Alex Watts :

Therefore your Solicitor could and should have written, asked what was being charged and what formula.

Alex Watts :

If the Solicitor did not potentially they are negligent.

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

Ok thanks.Its a bit disappointing on the basis i think we were misled on the actual 4.59% but understand your point.I will take this up with the firm of solicitors who acted on my behalf at the time.

Customer:

Thanks for your assistance anyway

Alex Watts :

What you can do is write a formal complain to the Solicitors managing partner.

Alex Watts :

They can investigate the complaint and come back to you. If you are still not happy you can then complain to the regulator www.sra.org.uk

Customer:

Yes I think I will do this Thanks again.

Alex Watts :

But it seems to me that the figure was not fixed and your Solicitor should have questioned it

Alex Watts :

Can I clarify anything else for you?

Customer:

No you have been very helpful thank you

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