Our freehold home ownership costs have hit £16,000 – can we challenge it?
We own a freehold home, but we have to pay fees for the estate that we disagree with.
They’ve risen sharply from £6,000 a year in 2018 to a bill of £16,068 a year now.
We seem to be charged for maintenance visits to common areas that we don’t get, for electricity to patio lights that don’t work, and for maintenance of a playground that is open to the public.
Our house is on a fairly standard estate and is not a high priced property. Can we challenge them and if so, what is the best way to do it?
Freehold property owners can sometimes find that they have to pay significant probate costs
MailOnline property expert Myra Butterworth replies: The high service charges that some tenants have to pay are well documented.
But here is a case of someone who owns a freehold property with a demand for rising maintenance costs and charges.
These include the management company’s own charges which have increased by more than 165 per cent in four years, from £6,000 to just over £16,000.
We talked to a legal expert about a homeowner’s options and how best to defy rising costs.
Stephen Gold, former judge and author, explains: You thought you were difficult, didn’t you? That is, those of you who have long-term leases and are doomed to pay an arm and a leg for service charges.
Think of the owners of houses and flats on farms who own their property and who are legally obliged by their deeds to contribute to elements such as the maintenance of communal gardens, playgrounds and paths that have not yet been approved by the authority. local and premiums for civil liability insurance.
Stephen Gold is a retired judge and author
You, as a tenant, can challenge your service charge claims in court.
No such luck for free owners who are faced with what they consider to be an outrageous maintenance demand that usually comes speeding through their mailbox from the developer’s administrative agent.
They have no mechanism for legal challenge and it is often a question of paying what is asked, with a very sick smile on their face.
The Government has promised to introduce new laws that would put landlords in England on a par with renters to challenge these charges, including challenging that the services charged are not reasonable, were not reasonably necessary in the first place or were not were carried out to a reasonable standard.
Morning? No, ‘when parliamentary time permits’. The recent Queen’s Speech was silent on the subject. In Wales, the same could happen.
This helps our questioner, who along with most, if not all, of her property owners disagrees with the demands for maintenance charges that have been presented to her.
Individually, the charges are modest but there are what appear to be legitimate complaints on a number of issues.
Typically, the deeds state what can be charged and how the management company can collect it.
If the management company does not follow this scheme, it will fail in any attempt to enforce payment. Here are the lines of attack that our interrogator and her neighbors can mount.
The demand for payment
As soon as possible after each calendar year, the management company must notify the absolute owners of the actual costs incurred for that year and the estimated costs for the new year.
In my judgment, until they have done both, any claim for payment based on both years is invalid.
Here, details of the estimated costs for 2022 have been provided to our questioner, but not the actual costs for 2021. All that can be inferred for 2021 is our questioner’s alleged personal liability for 2021 and not the details of the expenses. actual totals incurred for the 250 affected households.
The management company should be instructed to send each individual actual total costs in a format similar to the 2022 estimated cost statement before following up on unmet claims.
The charges of the management company
Any challenge to the reasonableness of the expense items is problematic.
However, the sums claimed as paid must have been paid and the services of the management company charged must have been performed. This brings me to the management company’s own expenses.
At first sight, they are now excessive, taken in the context of the general budget.
In 2018 it was £6,000. Now, they are claimed at £16,068, an increase of 167.8 per cent in four years.
For that £16,068, the management company estimates it will control spending just £9,598 for others. How can such a charge be justified? Is the company hiring ex-government ministers to make tea and lick the stamps with the central heating and electric lights blaring during all working hours?
An explanation of the basis on which your charges have been established should be requested from the company.
Off-farm land management
There is a dispute as to whether the management company has been spending money on land for which it has no responsibility and which is owned by a third party.
The dispute must be resolved with reference to the plans and the text of the deed.
If the management is not the company’s obligation according to them, the company cannot charge for doing what it has chosen to do.
Any dispute over the calculation of the maintenance charge must be arbitrated by a collegiate expert. The scriptures say so. This rules out a small claim in county court unless both parties agree to it instead of arbitration, although a county court claim as to whether the management company has been doing all it should in terms of maintenance, and the owners have a number of complaints in this regard, does not. does not appear to be trapped by the arbitration requirement.
But the deeds also say that the management company can add to the food fee the expenses incurred in the initiation or defense of proceedings and in the steps taken to collect a food fee.
This kind of wording is not uncommon with freeholders, but it is harsh and makes all but the simplest legal proceedings quite unappealing to freeholders because, win or lose, everyone may end up indirectly paying the costs of the business through an addition to next year’s maintenance charge.
For tenant disputes, the courts have the power to disallow this type of wording from going into effect.
Subject to how the management company responds to additional representations coupled with each individual’s threat to take the matter further, a trial case, through arbitration or small claims, may be considered by our questioner or another owner in the growth.
After all, the company’s own charges show no signs of abating in the coming years and the action should clear up the details and documentation showing what was behind that massive increase in those charges.
The least risky course would be to exhaust the company’s internal grievance procedure and, if you are still not satisfied, file a complaint with the Property Compensation Scheme that the company appears to adhere to. This is free of charge and does not preclude further action, such as a small claim if the claim fails.
Stephen Gold is a former judge and the author of ‘The Return of Breaking Law’ published by Bath Publishing. For more information about service charges, go to breaking the law.co.uk