Leasehold service charge issue
Discussion
April 2015 I bought a flat, and knew there was a service charge to pay. My solicitor withheld an amount from the purchase price to cover any deficit in the service charge for the immediately preceeding financial year (i.e. 2014/15).
Sept 2015 freeholder (self manages, ex local authority / Housing Association block) writes with the final, independently audited, accounts for 14/15, together with notification that they will no longer be running a rolling surplus / deficit but that they will either collect a balancing payment or return the net surplus. Their letter states they are returning a net surplus to leaseholders & payment follows. On the basis of the letter and the returned cash I instructed my solicitor to return the retained sum, as it was equal to the surplus paid back from the freeholder
Their accounts show a net deficit & the amount of the deficit is exactly equal to the surplus returned. At the time I did not pick up on this although due to becoming involved in a group action over elements of the service charge I am now aware that their accounts dept are crap to say the least.
Sept 2016 freeholder writes with the final accounts for 2015/16. In this letter they state that although the "in year accounts" show a surplus to be returned they now recognise that there was no surplus to return the previous year and they should have charged the balancing payment last year. To correct this they are now charging a balancing payment net of the impact of the service.
If I paid the balancing payment demanded I would be out of pocket as I suspect my prospects for recovery from the previous occupant are nil. In my view the leasehold organisation should be pursuing the previous occupant of the flat as they had the benefit of the previous year's error and it was the leaseholder's error. The freeholder doesn't see it that way, but their latest response is to suggest my solicitor should have checked their accounts before issuing the rebate onwards to the vendor - although why I should bear the cost of checking the work of a professional I am already paying a management charge to I don't know . The sum demanded is small (a couple of tanks of petrol) so not really worth taking legal advice on, but this is not the first error on the part of the freehold organisation and & I'll be buggered if I end up worse off for their error.
Any expeirence or thoughts?
Sept 2015 freeholder (self manages, ex local authority / Housing Association block) writes with the final, independently audited, accounts for 14/15, together with notification that they will no longer be running a rolling surplus / deficit but that they will either collect a balancing payment or return the net surplus. Their letter states they are returning a net surplus to leaseholders & payment follows. On the basis of the letter and the returned cash I instructed my solicitor to return the retained sum, as it was equal to the surplus paid back from the freeholder
Their accounts show a net deficit & the amount of the deficit is exactly equal to the surplus returned. At the time I did not pick up on this although due to becoming involved in a group action over elements of the service charge I am now aware that their accounts dept are crap to say the least.
Sept 2016 freeholder writes with the final accounts for 2015/16. In this letter they state that although the "in year accounts" show a surplus to be returned they now recognise that there was no surplus to return the previous year and they should have charged the balancing payment last year. To correct this they are now charging a balancing payment net of the impact of the service.
If I paid the balancing payment demanded I would be out of pocket as I suspect my prospects for recovery from the previous occupant are nil. In my view the leasehold organisation should be pursuing the previous occupant of the flat as they had the benefit of the previous year's error and it was the leaseholder's error. The freeholder doesn't see it that way, but their latest response is to suggest my solicitor should have checked their accounts before issuing the rebate onwards to the vendor - although why I should bear the cost of checking the work of a professional I am already paying a management charge to I don't know . The sum demanded is small (a couple of tanks of petrol) so not really worth taking legal advice on, but this is not the first error on the part of the freehold organisation and & I'll be buggered if I end up worse off for their error.
Any expeirence or thoughts?
Mistakes happen, if the monies involved are of small value, then either move on, or mention the matter to the solicitor who acted for you when purchasing the leasehold property.
For future reference, the web link below offers online and free telephone legal advice on Leasehold issues.
http://www.lease-advice.org/
For future reference, the web link below offers online and free telephone legal advice on Leasehold issues.
http://www.lease-advice.org/
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