Service charge account statements

[laracroft]

Can anyone tell me if made up accounts for the annual service charges should be provided to the leaseholders within any given time period?

My managing agents are friendly but just keep telling me they are "about to be sent out". It took almost a year of asking to obtain last year's set, and it seems to be going that way again this year too (year end is December). Is there anything else I can do?

[frosty]

I've had this problem: it should typically be within 6 months of the financial year end, a time limit which ARMA registered agents are supposed to comply with, although ours most certainly doesn't.

This year I served formal notice on the managing agent requesting the summary accounts. They are now 10 months overdue, so I've written to ARMA instead...

Frosty

[laracroft]

My managing agent don't seem to be ARMA registered...
No surprise there :)

[laracroft]

That should have been "doesn't"!

[laracroft]

OK - have just found this on Lease. Should have looked there first.
My agent has never complied within 6 months of the end of period date so far. Still unsure how I can enforce this?

"You have the right to write to your landlord to request a written summary of the costs which make up the service charges. The summary must-

* cover the last 12 month period used for making up the accounts relating to the service charge ending no later than the date of your request, where the accounts are made up for 12 month periods; or

* cover the 12 month period ending with the date of your request, where the accounts are not made up for 12 month periods.

The summary must be given to you within 1 month of your request or 6 months of the end of the period to which the summary relates whichever is the later."

[jeffrey]

Look at last few words: "whichever is the later".
Yes, it's > 6 months after summary peiod ended, but you can still request summary of costs which must be given within 1 month of request.

[frosty]

Jeffrey

Are you by any chance able to advise what is the penalty for non-compliance.? My understanding is that it is potentially a fineable offence (?) but how would a leaseholder instigate such action.?

Frosty

[jeffrey]

Jeffrey

Are you by any chance able to advise what is the penalty for non-compliance.? My understanding is that it is potentially a fineable offence (?) but how would a leaseholder instigate such action.?

Frosty

See s.25 of LTA 1985. Failure to comply with s.21/22/23 is a criminal offence.
Maximum penalty is a fine up to 'level 4 on standard scale'. As at 2004, that meant £2500, but it might have been increased subsequently.

[tenant29]

You should wait until 6 months after the end of the reporting period and then send a written request ( by recorded delivery) for a summary of the audited service charge accounts.
If after 30 days and no reply, you make a report ( c/w copy of your written request and proof of recorded delivery ) at the local Magistrates Court. Then wait for the Court to advise a hearing date.
Before that date, you may get letters from the L's solicitor threatening to employ a barrister and have the complaint disqualified and make you responsible for all of their legal costs

But instead of going to court, you should be organising the other leaseholders to replace the managing agent.

[laracroft]

Maybe that would be the wisest course of action. I'm keen to avoid court action unless absolutely necessary - mainly for my own sanity. I don't suppose anyone can recommend a fair and efficient managing agent in the Hampshire area can they :)

We have three flats in the house, the top one is almost always empty (it's a tiny box bedsit with sloping walls in all rooms - in fact we had to involve environment health about the number of people sleeping up there and the rubbish and mice that were working their way downstairs, but that's another story!).

The flat above me is rented to short let tenants by the leasehold owners. I am the only long-leasehold occupier. How would I go about changing the management company? Do I need agreement from both other flats? How on earth can I track down the top flat owner, or can I ask the management co. for this info?

[frosty]

You should wait until 6 months after the end of the reporting period and then send a written request ( by recorded delivery) for a summary of the audited service charge accounts.
If after 30 days and no reply, you make a report ( c/w copy of your written request and proof of recorded delivery ) at the local Magistrates Court. Then wait for the Court to advise a hearing date.
Before that date, you may get letters from the L's solicitor threatening to employ a barrister and have the complaint disqualified and make you responsible for all of their legal costs

But instead of going to court, you should be organising the other leaseholders to replace the managing agent.

Firstly, thanks to all for the responses. With regard to my own particular case, I have - as mentioned earlier - referred the late accounts issue to ARMA, as the agent in question has never once provided them on time. I intend giving ARMA the benefit of the doubt for the moment. That said, I contacted our auditors last week, and they confirmed that they have so far received no paperwork from the managing agent, which nails the lie about accounts being "imminent"...

I agree with the comment about organising other leaseholders, but we have yet to be handed control of the Residents Management Company and as such we do not have access to leaseholders addresses, most being non-resident investors...

Tenant29's comments are of interest. I have never resorted to the courts before, so excuse my ignorance. Can you instigate an action simply by approaching the magistrates court yourself.?

[tenant29]

Lara,

You have the right to make an appointment to inspect all the documents relating to the service charge account and get access to inspect within 30 days from receipt of request. You are also allowed to take a copy of any document by payment of a small charge.

So you can use the oportunity to get the addresses of the other leaseholders for billing of service charge payments and take a look at the bills & bank statements etc.

Also look for a copy of the managing agents service agreement asit will give the notice period for ending their service.

I would suggest that you buy a copy of the RICs Residential Management Code ( price about 12 pds ). This manual sets the standards by which RICS members are required to work in managing service charge accounts.

[tenant29]

Frosty,

1. You can make a written request for the addresses of the other leaseholders " in order to take a poll of the interest in collective purchase of the freehold".

But you should go round the site and speak to all the owner occupied flats to get support for buying the freehold ( and change of managing agent ).

2. Before you approach the Magistrates Court, you should get a copy of the section of law quoted by Jeffrey from the Public Library and check if your own documents are adequate proof of a criminal offence. Then you go to he local council Housing Officer and ask if they will take this matter to Court on your behalf. Some council's may not co-operate and tell you there is no such service.

If you are 100% sure of winning at Court and have full documentary proof , then you go to the local Magistrates Court and ask the Office Manager to explain how to report this criminal offence to the Court. Its actually a lot of work and you may have to engage in correspondence work with other side's solicitor before the hearing date .

So before you proceed , you should decide what is your objective ? if it is just to remove the existing managing agent , it could be a lot of work for nothing if the replacement agent is just as bad.

[laracroft]

Thanks for your help everyone. I'll have a think about where to go from here.

[jeffrey]

2. Before you approach the Magistrates Court, you should get a copy of the section of law quoted by Jeffrey from the Public Library

For all Acts of Parliament, downloads are available free at http//:www.statutelaw.gov.uk/Home.aspx.