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Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I'll try to be succinct: Shared ownership development. Annual

Resolved Question:

I'll try to be succinct: Shared ownership development. Annual fees - the following figures specifically relate to the 'Service Management' fees (i.e. maintenance, cleaning, sinking funds, insurance etc are aside from this). We have been advised that the estimate for 2013-2014 was wrong and we have to pay 56k, which is an inflation-busting amount. Is it legal for the management agent to increase their fee by nearly 25k from one year to the next? Here are other years charges for context:
2011-2012 £39,255.35
2012-2013 £31,213.43
2013-2014 £55,939.89
2014-2015 £43,171.00 (Estimate)
We have been given no explanation for the increase, we have just been told we have to pay. This is an extra £700 for me, for what I can see as no reason. (We asked them to investigate the increase and 5 months later they send us a letter just to say they investigated and the charge stands.)
It would be super if you could advise whether what they have done is legal or whether we can challenge it.
Many thanks for your time.
Submitted: 1 year ago.
Category: Property Law
Expert:  Joshua replied 1 year ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.

May I ask have you asked for copies of the accounts that provide the reason for the increase please? If so have the agreed to provide them?
Do you know if any of the increased charges relate to major works the association has carries out on the building?
Customer: replied 1 year ago.

Hello there,

The accounts they have sent us just aggregate the management fees as a whole. The fees though are on top of things like maintenance, window cleaning, gardening, electricity etc. which are noted separately. The element we are querying is purely what PL Management are charging to 'manage' the property, so any works (although there have been none) would be noted separately.

I have emailed Genesis to ask them to account for the extra 25k from one year to the next. It seems to me as though it is amount for a salary; are they allowed to charge a whole person's salary to a single development?

Does any of this make things a bit clearer?

All the best,


Expert:  Joshua replied 1 year ago.
Thank you. You have a wide range of rights in this respect. With your permission I will set out these rights below though not all of these will be relevant to this situation though may be useful in the future hence why I include them:

It is unlawful for a landlord to seek to recover service charges for work that was paid for more than 18 months prior to the invoice being issued for the same. The landlord or agent must issue the demand within 18 months of his incurring the cost. If the demand is provided later than this, the landlord cannot recover the costs at all, unless a notice is served during the 18 months stating that costs have been incurred and that the tenant will be required to contribute to them by payment of a service charge.

In addition for any charge that will incur cost of more than £250 per tenant a s20 consultation notice and procedure must be followed by the landlord/agent otherwise they are limited to £250 / tenant in terms of the maximum cost they can recover. Finally any invoice must have the landlords full name and address and a summary of rights an obligations on the reverse or it is invalid and can be ignored until replaced with a correct invoice.

You can also demand the agent provides a summary of service charges paid under the lease to date by serving a s21 notice on the landlord. You then have the right to demand further information backing up the summary you receive by serving a s22 notice. If the agent does not provide the information requested then the landlord can can be liable for prosecution and a fine of up to £2500 though as the freehold is owned by the residents this is not very useful as a deterent here. The local authority can assist in prosecution if necessary however which the agents could be held accountable for financially if they are found to be negligent in dealing with tyour request by the freehold company. Either before or after obtaining such information as you reasonably require you can challenge both the reasonbleness in the circumstances of the service charges already demanded for repairs and the current service charges now demanded for the same by applying to the Leasehold Tribunal using the following form:

There is a requirement that management costs imposed must be reasonable in all the circumstances and you can use your right to obtain the above information from the landlord in order to assess the reasonableness of the management fee demanded. If you are not satisfied with either the information provided and/or the reasonableness of the charge sought, you together with any other tenants that wish to do so can apply to the above tribunal for a decision on the reasonableness of the same. The Tribunal has the power to determine the appropriateness of the charge payable

Does the above answer all your questions or is there anything I can clarify or help you with any further?
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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