LandlordZONE

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Apr, 2014

Friday

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  1. #11

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    Hi Andy,

    My lease requires payments in advance - it says I should make two equal half-yearly payments in advance. It also says the landlord is required to provide an estimate of the likely costs of repairs to be carried out in the forthcoming year and that at the end of each year, the landlord is required to provide an account and certificate indicating the actual expenditure (he hasn't done either of these since 2010).

    Thanks for your help with this - it is a total minefield to me!

  2. #12
    Join Date
    May 2010
    Posts
    738

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    Often the best policy, if you dispute service charges, is to pay them and then bring a case at the LVT asking them what is payable. This will most likely take away the risk of the landlord being able to recover their legal costs. However if you suspect the LL may not be in the position to repay any over-payment from the LL then you may be best withholding the amount you are confident has been overcharged.

    If the LL starts or threatens legal action before you pay then they may be able to recover their legal costs.
    I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

  3. #13
    Join Date
    Nov 2008
    Posts
    2,122

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    Well..if the lease requires certification and it isnt done then the service charge(s) (since 2010) are not payable at all, there are plenty of LVT's about this scenario. It would appear then you could legitimately withold service charges, perhaps further costs will then fall foul of the 18 month rule ? (depending on whether you were actually informed of costs incurred even if they were not payable due to technicalities).

    Andy
    Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

    I do not accept any liability to you in relation to the advice given.

    It is always recommended you seek further advice from a solicitor or legal expert.

    Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

  4. #14
    Join Date
    May 2010
    Posts
    738

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    Quote Originally Posted by andydd View Post
    Well..if the lease requires certification and it isnt done then the service charge(s) (since 2010) are not payable at all, there are plenty of LVT's about this scenario.
    Yes, you are right, but I still feel payment and then reclaiming is generally the best policy. Litigation is never straightforward and you might end up in front of a Judge who takes a dim view of withholding payment, especially if you haven't given your reason. The lease may allow recovery of costs or the Judge may decide it is unreasonable behaviour.

    Also, if the lease allows recovery of costs you have to go to another trial to dispute the demand for costs from the LL.
    I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

  5. #15
    Join Date
    Jun 2010
    Location
    Foundation trench for New Shed@ Ham on Rye
    Posts
    13,722

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    I must clarify what has been posted "that without a certificate no charges are due"

    If as in #11 a interim payment is made, the relationship between the end of period certification (under the lease) varies between leases.

    In general terms, as leases are infinitely variable;

    -It is therefore conceivable, and relatively common, that the interims stand alone in the calculation of the estimated charges whehter or not a certificate in produced. The only remedy in that case is not simply the LVT, but the County Court to order the landlord meet the terms of the contract-the lease- and certify. While the LVT might determine what is due for a period the landlord can still insist on his interims and the court would be require him to reconcile them as the lease dictates.

    -In the case where any surplus is rolled into reserves, the interims would still be due as demanded, unless the the LH challenged them ( and the RF) as being fair and reasonable at the LVT.

    -It is only where the service charge is expressed as calculated as a final charge, in arrear, less any on account amount, that the LVT might then determine"the" service charge.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers. More ramblings atleaseholdpropertymanager.blogspot.com

  6. #16
    Join Date
    Jun 2010
    Location
    Foundation trench for New Shed@ Ham on Rye
    Posts
    13,722

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    Quote Originally Posted by mrsb2b View Post
    Hi Andy,

    My lease requires payments in advance - it says I should make two equal half-yearly payments in advance. It also says the landlord is required to provide an estimate of the likely costs of repairs to be carried out in the forthcoming year and that at the end of each year, the landlord is required to provide an account and certificate indicating the actual expenditure (he hasn't done either of these since 2010).
    Then you write

    Dear Mr Landlord

    Under clause XX you are required to certify the expenditure for the period ending YY and ZZ.

    Under clause AA you are required to refund the surplus/invoice the deficit/apply either S or D into the next estimate/credit the reserves ( what does your lease say?).

    Would you therefore confirm in writing within 5 working days that you will undertake to do so within 21 working days. If you fail to do so within 5 days this letter is a formal demand to certify those periods YY and ZZ under section 21 of the LTA 1985. Failure to do so within one month* and five days of this letter will result in my asking the local Authority to prosecute you and/or seek your prosecution in the local magistrates Curt as failure to comply is a criminal offence. I will then apply to the County Court to require that (clause A) is complied with.

    With regard to the insurance invoices as you will know my lease requires that service charge are estimated in advance and billed accordingly and therefore the lease does not allow the "one off billing" of insurance premiums. I am therefore not obligated to pay these. As the first notification or demand for these amounts was on the (date) I am only responsible for amounts incurred in the last 18 months, under section 20B of the above Act and I am sure will take that into account when preparing the certificates above.

    I am making a payment of £X on account without admitting or agreeing that the amounts demanded to date are recoverable, due, or fair and reasonable.




    * If the last accounting period was less than 6 months ago then they have up to 6 months from when it ended.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers. More ramblings atleaseholdpropertymanager.blogspot.com

  7. #17
    Join Date
    May 2010
    Posts
    738

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    I forgot to add the other reason that makes me believe, that in in general, it's best to pay and then dispute rather than withhold and it's the s146 covenant.

    If the lease states that the LL can recover their costs 'in contemplation of proceedings under s146 or 147' then there is a greater risk of them being able to recover their costs if you haven't paid the demand.
    I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

  8. #18
    Join Date
    Jun 2010
    Location
    Foundation trench for New Shed@ Ham on Rye
    Posts
    13,722

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    You can only withhold where there is a statutory right, but as said at the risk of costs, any attendant right to say, the right to withhold a SC, should be exercised, such as challenging the amount/cost at the LVT.

    If you do intend to withhold where there is no right to do so, immediately raise your queries and then depending on the asnwer, get your retaliation in first - as above - make an application to the LVT - don't posture.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers. More ramblings atleaseholdpropertymanager.blogspot.com

  9. #19

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    Thank you - this was most helpful indeed.

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