SERVICE CHARGE
& ACCOUNT INSPECTION
*
1/2/20: No
further communications has been received from the managing agent or
committee on this matter since the last meeting in
November 2019 when they attempted to obtain a Signed
Non-Disclosure Agreement!
|
Service Charge Witheld at
February
1, 2020
£406.20 |
*
23/1/20 -
Report on The Service Charge Being Witheld
Due to the length of time the issue of the
director and committee refusing to allow
unconditional access to carry out an
Inspection of the 2017/18 Annual Accounts,
there will be a report issued from time to
time to inform residents and visitors alike
as to what the current situation is.
The request for an account inspection arose
out of the lack of co-operation by the
director, committee and previous managing
agent/accountant. Originally a request was
made as far back as 2017 to the parties
concerned for a breakdown/analysis of the
Repairs & Renewals item shown in the annual
account, as there was absolutely no detail
attached to the account and residents wanted
to know how their money had been spent, so
after numerous requests and refusals,only
one other option was left - to request an
account inspection.
The reason for
witholding the Service Charge was, and
remains to gain proper unrestricted access
to the 2017/18 Accounts to ensure that
residents monies have been spent
appropriately and accounted for with
relevant documentation.
As this is the first report, lets recap the
events since the Service Charge Withdrawal
commenced back in May 2019, and reflect on
how this situation has developed into such a
farce, and the lengths the director and
committee have and continue to go to in
order to prevent the account being Inspected
including breaching the lease,
committing an prosecutable offence
under the Landlords and Tenants Act 1985,
and ultimately
the
attempt to obtain a signed
Non-disclosure Agreement prior to an
Inspection taking place,
this latest
event is a red flag and is
practically an admission of major
wrongdoing. A
summary of these events can be viewed
here.
These ongoing avoidance tactics just do not
make any kind of sense if everything is
above board and there is nothing to hide,
however it has led to speculation by a
number of residents as to the reason why the
director and committee continue down this
road.
*
1/1/20:
As the
committee continue to
refuse access without pre-conditions or
requiring a signed Non-disclosure Agreement, the Service
Charge will continue to be witheld until such times as
they comply with their legal obligations and allow the
Account 2017/18 to be Inspected, they continue to breach
the lease and commit an offence under the Landlord's and
Tenant's Act 1985.
|
Service Charge Witheld at
January 1, 2020
£367.90 |
*
1/12/19: The
Service Charge continues to be witheld until such
time as the director and committee fulfill their
legal obligations to the residents and give
unconditional access to the 2017/18 Account
Inspection. Further to this, a request has
been made to Inspect the 2018/19 Account - to date
there has been no response to the email request.
|
Service Charge Witheld at 1/12/19
£329.60 |
*
29/11/19:
Condition 2 - Letter regarding the Account
Inspection
"You
will adhere to, non-disclosure of the
outcome of your visit to our Office,
there are to be NO comments placed
ON YOUR WEBSITE
or discussed VERBALLY
outside of this Office."
Do the director and committee not realise that by
attempting to gain a signed non-disclosure they have
raised a red flag which indicates that they know
there is the possibility of something incriminating
turning up during an Inspection of the
account which they want to keep hidden from the
residents at all costs. They can't even claim
confidentiality because what we are talking about is
the residents funds who are entitled to
inspect the accounts and see where every penny is
spent!
*
OUTCOME
OF THE SCHEDULED ACCOUNT INSPECTION 27/11/19
UNBELIEVEABLE!
On
arrival to carry out the Inspection as
scheduled, I was presented with the following
letter which I was expected to sign prior to
being allowed to make the Inspection. I
refused to sign and would not agree to any of
their conditions consequently the inspection did
not take place, however the meeting continued
with the managing agent when a number of matters were
discussed relating to the accounts in general.
The
director and committee are once again playing
stupid games in order to ensure that this
account is not inspected,
their behaviour is even more suspicious when you read
condition No 2
in their letter below.
Sooner or later they
are going to have to allow an Inspection to take
place so they may as well agree to it - without
conditions - and put this matter to rest once
and for all.
So
the situation has not changed and my withdrawal
of the Service Charge continues until such time
as the director and committee give unconditional
access to an inspection.
*
18/11/19
- Response Accepting this Appointment
Dear Mrs. M.......,
Thanks for your email giving an
alternative date for the Inspection of the
2017/18 Account to take place, 1pm on Wednesday
November 27, 2019 will be fine.
Email with an
alternative Date to Inspect the 2017/18
Mon 18/11/2019
Dear Mrs S.......
Apologises for the
delay in replying. Would the date 27th
November 2019 at 1pm, be convenient for to
attend our Office.
Please advise,
Many Thanks V....
M.......
*
Follow-up email - Inspection of 2017/18 Account
12/11/19
Dear Mrs. M.......
As
you haven't responded to my email below, I'm a
little concerned that perhaps you did not
receive it and may be expecting me to attend the
meeting which you set up for tomorrow afternoon
the 13th Nov. Perhaps you could confirm if you
have in fact received it and what alternative
arrangements you can make in order for the
Inspection to take place.
I
look forward to hearing back from you.
*
Inspection of 2017/18 Account - A Development
On
November 8, 2019 I received the following email from
the managing agent. From it's contents it
would
appear that the
director and committee have decided to comply with
their Legal Obligations contained within the Lease
and abide by the Landlord's & Tenants Act 1985, and
agree to allow the Inspection of the 2017/18 Account
to take place without conditions attached.
Hi Mrs
S.......
I would
like to Invite into our Office to inspect the year
17/18 Accounts, I have a free Afternoon on 13th
November 2019, 1pm. Would that be a suitable time
and day for you.
Please
advise. Many Thanks
V....
M.......
There follows my response:
Dear Mrs. M.......
Many thanks for your
message and invitation to Inspect the 2017/18
Account which is appreciated, unfortunately I have
an appointment on Wednesday afternoon which I can't
put off. Would it be possible to move the
Inspection to another day of your choosing - I am
available any other day next week or when ever would
be convenient to you.
Thanking you in advance
and look forward to hearing back from you.
*
Update -
Service Charge witheld at
November 1, 2019
Inspection of 2017/18 Accounts
Further to the
meeting with the managing agent on
3/10/19, this was followed by a
number of phone calls from
their solicitor. The purpose of these
communications were to discuss the options they were
willing to consider with a view to resolving the
issue, these options were:
(1) paying all monies owed before an Inspection
takes place
(2) pay a deposit on monies owed before an
Inspection
Neither of these are acceptable and the parties
concerned were informed again that as soon as the
Inspection of the 2017/18 Account takes place
without conditions, reimbursement would be made.
The
Service Charge will continue to be witheld until
such time as the director and committee fulfill their
Legal Obligations and allow the
Inspection to take place.
The
resolution to this ongoing issue is simple and it's
time that the director and committee took their
legal obligations seriously and ALLOWED THE
INSPECTION TO TAKE PLACE WITHOUT CONDITIONS
and bring these
shenanigans
to a close!
|
Service Charge witheld at 1/11/19
£291.30 |
*
21/10/19 - Letter received requesting a Meeting
A
further meeting requested to discuss 'issues' -
see here
for full details and the
response
to the request.
*
A
Meeting with the Managing Agent 3/10/19
(Abridged)
The
Managing Agent requested a meeting with with me
to discuss the Service Charge Issue relating to
the Inspection of the 2017/18 Account.
After
some discussion on various aspects of the issue,
I was asked if I would agree to the removal of
the sign in my window and to paying the monies owed
- I stated that I would concur with this request
as soon as the Inspection had taken place and
not before. The managing agent then
requested that I put in writing my commitment to
reimburse the Service Charge which has been witheld to date - see the confirmation email
below:
"Dear Mrs M.......
Further to the meeting of today, you
requested that I put it in writing that I
would reimburse the Service Charged owed to
you once the Inspection of the 2017/18 had
taken place, I don't understand why you
needed this confirming again as I already
stated this to you - in writing - on a
couple of occasions including on the website
- which you say you haven't looked at."
The matter remains
unresolved.
*
Service Charge witheld at
October 1, 2019
Inspection of 2017/18 Accounts
Until such time as the director and
committee of the SRA Ltd fulfill their
Legal Obligations and allow
' unconditional access'
to inspect this account, the Service
Charge will continue to be witheld.
|
Service Charge witheld at 1/10/19:
£253.00 |
*
Service Charge witheld at
September 1, 2019
UPDATE
£214.70
*
WINDOW NOTICE
The Sycamores Committee
now state they are
taking Legal Action to recover the Service
Charge witheld to date.
After 7 months of
silence and no communication from them on this
matter, they say
they will allow an Inspection of the 2017/18
Accounts. However it comes with a number of
unacceptable conditions attached before they
will let the inspection go ahead.
It is questionable
why they have waited so long before they have
addressed the situation - and why now!
Given that it is
the director and committee who are actually
guilty of breaching the Lease and being in
contempt of the Landlord & Tenants Act Law
1985, this does not appear to be a very sensible
approach on their part to addressing or solving
the matter. To say the least it is rather
bizarre as their handling of the ongoing
situation will no doubt come under investigation
if or when it ever gets to a court situation.
Once again - until
such time as they fulfill their Legal
Obligations and allow proper and unrestricted
access to this account, the Service Charge will
continue to be witheld.
*
Response email
sent 17/8/19 to the Managing Agent's letter of
Aug 14, 2019
Dear Mrs. M.......
Thank you for
your latest letter of August 14, 2019 where you
informed me that the director and committee
intend proceeding with legal action against me
to recover the Service Charge I have witheld to
date.
To be absolutely
clear - my reason for witholding the Service
Charge was, and remains to gain proper access to
the 2017/18 Accounts which they are legally
obliged to allow, and by continuing to refuse to
allow proper access they themselves have been
and are guilty of the following:
(1) in breaching
the Lease of the estate
(2) in being in
contempt of the Landlords & Tenants Act 1985
the latter being
a prosecutable offence in itself.
I strongly advise
you to consider the facts, the reasons for the
initial reduction in the Service Charge, and
eventually the full amount of the Service Charge
being witheld, and the sequence of events which
runs from Dec 2018:
·
Fact : December 6, 2018, an official
request was made to the Accountant and committee
to inspect the 2017/18 Account.
·
Fact : December 8, 2018, I informed the
committee that I would be reducing the amount of
monthly Service Charge by £3.30 per month. This
was due to a threatening Solicitors Letter
dated December 1, 2017 regarding the website,
and the reason for the reduction was fully
explained at the time.
·
Fact : January 5, 2019, there had been no
response to my original request, a further
message was sent to the Accountant and committee
on 5/1/19 asking for a response.
·
Fact: January 16, 2019, there had been
no reply to the request so I forwarded the
request to the managing agent.
·
Fact : January 31, 2019 - A reply was
received from the managing agent stating my
request to inspect invoices and receipts
relating to account 2017/18 had been refused
by the committee, no explanation was given for
their refusal.
·
Fact : April 4, 2019, I informed the
managing agent and committee that I would be
making a further reduction totalling £10 per
month relating to 2 further threatening letters
received from the Solicitor on June 12, 2018 and
June 25, 2018, again the reason for the
reduction was fully explained.
·
Fact : April 19, 2019, The committee were
notified that my Service Charge would be
witheld until such times as they complied with
their legal obligations towards the residents.
They were also informed at the same time that as soon as an Inspection of the account was
carried out that the monies witheld would be
reimbursed.
·
Fact:
Not once between December
6, 2018 and July 22, 2019 (7 months in total)
have they made any effort to contact me either
by telephone, letter or email, with a view to
discussing this matter and possibly having it
resolved.·
It appears that
instead of considering and responding sensibly
to my last letter on this matter, the director
and committee have again decided in favour of
threatening me, as they have done so many times
before. Frankly - I continue to be appalled by
this unreasonable behaviour - and in the event
that this goes further than their repeated
threats, I look forward to my day in court when
they will have to justify their position in breaching the
Lease and being in contempt of the law itself as
outlined earlier.
Yours faithfully,
*
Another hand delivered letter
from the managing agent on
behalf of the committee.
*
Response sent via email to the letter below on
9/8/19
Dear Mrs M.......,
I acknowledge receipt of your hand delivered
letter dated August 7, 2019, and thank you for
the clarification as to which accounting year
you were referring to in your previous letter as
there had been some confusion on your part
whether it was Account Year 2017/18 or the
Account still uncompleted for 2018/19.
As already stated I will reimbursed monies owed
and remove the notices as requested once a full
Inspection of the 2017/18 Account has been
completed and not before.
I look forward to your response when hopefully
common sense will prevail and this matter can be
resolved in a reasonable manner which would be
in the interest of all concerned.
cc The committee - Doris Clark,
Joyce Lowes, D M....., S T......
8/8/19 Latest from the committee and managing
agent
*
Confused management & committee
Referring to the letter received from the
managing agent on behalf of the director and
committee dated 23/7/19 which was received on
the 29/7/19 and responded to, there has been
no reply from them to the request to clarify
which accounting year they were referring to.
It would appear they must still be confused and
can't make up their mind about what they are
talking about and offering, or perhaps they
were being
deliberately
ambiguous for some unknown reason when they
stated
"view
the Audited Accounts once completed for year
ending 17/18".
So to
clarify - the Inspection requested and
originally refused by the committee (see here)
is for accounting year 2017/18 - this is the
year prior to the managing agent taking over on
1/4/2018, it is Account year 2017/18 which was
'audited' and issued to the residents and
presented at the Agm in 2018. It can only be
assumed by their statement to "view
the Audited Accounts
once completed
for year ending 17/18",
that they are referring to accounting
year 2018/19 and not 2017/18!
To bring the managing agent and committee up to
date, the amount of Service Charge being witheld
is £176.40 which includes August, and as
previously declared in a letter to the committee
and managing agent dated 19/4/19, this will be
reimbursed once an Inspection of the 2017/18
Account has been made and not before.
Regarding the 'Threat', please take note, this
is not the first time that Legal Action has been
threatened, these were an attempt at the time to
bully and intimidate which proved unsuccessful
then and won't work this time either, but the
committee are free to go down that route if you so choose
- after all neither the managing agent or
committee have to foot the bill, as usual it
falls to the residents to pay.
It's
good to remember that the committee have shown
themselves on numerous occasions to be
untrustworthy, and have been prepared to breach the
lease and break the law when it suits them. They are not fit
to hold the positions they do, however they will
continue to do as they please until such times as
the residents take control and decide not to vote them
back in.
*
NOTICE -
1/8/19
Service Charge witheld at August 1, 2019
£176.40
*
Response sent
29/7/19
Email
response to the letter dated
23/7/19 sent to the managing agent:
Dear Mrs
M.......
Thank
you for your letter of 23rd which was hand
delivered today, and which I've read with
interest, however some clarification is
required before I could make any kind of
informed decision.
1) Your
letter stated and I quote - "view the
Audited Accounts once completed for year
ending 17/18"
I would like to point out
that the accounts for year 17/18 are already
complete and were presented at the 2018
AGM.
Perhaps someone in your
office has gotten mixed up with the years
because going on what is in your letter, it
reads like you may be talking about year
18/19!
I would also like to point out
that I am at the moment only interested in
year 17/18 and that is the account
which I and Mrs. B.... wish to inspect.
Can you please confirm
exactly which year you are referring to?
2) Can
you confirm that you have the space there at
your office where the inspection could take
place and where Mrs B.... and I can work
undisturbed?
3) Can
you confirm whether members of the committee
will be in attendance during the inspection?
I look
forward to receiving your reply.
*
Letter received
from the managing agent.
*
NOTICE -
1/7/19
The Estate Committee which is made up of:
The SRA Director:
Mrs Doris M. Clark,
The SRA Secretary:
Mrs Joyce Lowes,
+
Mrs S. T…… &
Mr D. M…..
have collectively breached the Terms of the Lease and broken the Landlord & Tenants Act 1985, by
REFUSING to allow an Inspection of the 2017/18 Accounts - they are legally obliged to do so when a resident makes the request.
Until such time as the committee fulfill their Legal Obligations as per the Lease etc., the resident at No. 26 is witholding payment of the monthly Service Charge.
Amount witheld
at July1st, 2019
£138.10
-------------------
*
No. 26 is now
A
SERVICE CHARGE FREE-ZONE
Until the
director and committee allow Inspection of the
2017/18 Account.
*
Notification
email sent to the director, committee & managing agent
19/4/19
To: The director, committee and managing Agent.
I am writing to inform you that I am withholding my
Service Charge until further notice – due to your
continuing refusal to allow myself being a resident of the Sycamores and equal
shareholder in the SRA Ltd – to inspect the 2017/18 Account.
Your refusal to allow a resident to inspect the SRA Account
is illegal, breaching the terms of the Lease – and is a
criminal offence under the Landlord and Tenant’s Act 1985.
Therefore I will not contribute any further Service Charge
payments to the company funds until you fulfil your legal
obligations to me as a resident and shareholder. Once a full
inspection of the accounts has been carried out, I will be
happy to reimburse all monies withheld.
Resident of No. 26
*
Service Charge -
For the period 1/4/19 - 31/3/20
Reference letter to the residents dated 1/4/19
where it states:
NO ACTION REQUIRED - All payment plans will
remain the same.
Once again attention is drawn to the
Clause 3.5 of
the Lease:
In
calculating
the amount of Service Charge from time to time
the Lessor
shall take into account any past deficiency
and any future expenditure (whether annual or
recurring or not) which may be likely to be
incurred by the Lessor under any of the heads
aforesaid so as
to enable the Lessor to meet such expenditure
out of the funds in the hands of the Lessor
representing service charges paid by the Lessees
of Dwellings in the Scheme if and when such
expenditure shall be incurred and shall also
take into account and give due allowance for any
surplus arising out of such service charge
previously collected but not in the event wholly
expanded.
The director and committee once again are in
breach of the terms and conditions of the Lease
and their responsibilities, anyone reading the
highlighted areas above would have no difficulty
actually understanding what it means, so why
don't they.
For the past 3 years that I know of there has
been a huge shortfall each year with regard to
the amount of Service Charge received, this has
been documented in an earlier article which
can be viewed here.
The Service Charge is intended to be self
financing for the most part, this is normally
achieved by looking at the previous years
expenditure and setting the level for the coming
year accordingly.
What has been happening is that this shortfall
has been subsidised out of the Sinking fund
which is intended for
major future
expenditure and
not for
the day to day expenses and repairs and
renewals, in fact nowhere in the Lease does it
state that this is allowed.
It would appear that in this instance, the
director and committee choose to ignore the
terms of the Lease to keep the Service Charge at
a low level. In the past because of this
practice, the Sinking Fund percentage was
actually increased from 3% to the current 5% to
cover for the shortfall in Service Charge.
Isn't it about time that the decisions relating
to the estate's finances were handled properly
and not at the whim of the director and
committee!
*
Letter sent to the director,
committee & managing agent by the
website owner 5/4/19
Dear director, committee and managing agent,
A Further Service Charge Reduction
No doubt the annual account for year 2018/19 is
now complete and included in that will be
charges for 2 further letters from the company
solicitor to myself, these were mentioned in my
letter to you of 9/12/19.
I wish to inform you that I am now making a
further reduction in my Service Charge
contribution for the same reason outlined in
that letter, this will apply from 1/4/19 until
31/3/20.
Please find enclosed my cheque for £28.30 for
April 2019's charge, this is the reduced amount
I will continue to pay until the end of this
financial year.
Yours faithfully
*
Question sent to the managing agent, director
and committee 25/3/19
Observations on the Service Charge
What is the criteria used to work out the level
of Service Charges for different types of
properties on the estate i.e:
|
Property Type |
Monthly Payment |
| |
|
|
2 Bedroomed apartment
....................................................................... |
Around
£44.00 |
|
2 Bedroomed apartment with
garage
................................................... |
? |
| |
|
|
2 Bedroomed terraced bungalow
with own garden
......................... |
£38.30 |
|
2 bedroomed terraced bungalow
with own garden and garage
........... |
? |
| |
|
|
1 bedroomed flat
................................................................................... |
£38.30 |
|
1 bedroomed flat with garage (if
applicable)
......................................... |
? |
There appears to be
an anomaly, why would a 1 bedroomed flat
have the same charge as a 2 bedroomed
bungalow with a garden?
Note:
To date there has been no response from
either the managing agent, director or
committee on this matter.
*
The
Service Charge
Owner/Residents pay an Annual Service Charge
towards the upkeep of the estate, this covers
the day to day repairs, renewals, gardening,
window cleaning etc. This service charge also
pays the Accountant, the Company Solicitor and
the Managing Agent for their services.
In
the accounts for the year ended 31 March, 2018,
this is what each resident has contributed on a
Monthly basis towards the Service Charge for
these major items in comparison to what they
contributed in previous years:
Comparison of Residents Monthly Service Charge
Contribution
|
Service Item |
2017/18 per
Month |
2016/17 pper Month |
2015/16 |
|
|
Electricity |
£2.28 |
£2.43 |
£2.20 |
|
|
Insurance |
£12.25 |
£13.13 |
£12.19 |
|
|
Repairs & Maintenance |
£7.92 |
£8.19 |
£51.29 |
* |
|
Gardening Expenses |
£9.70 |
£8.18 |
£7.85 |
|
|
Cleaning and Window Cleaning |
£5.95 |
£5.79 |
£5.00 |
|
|
Legal
and Professional Fees |
£4.85 |
£0.00 |
£1.00 |
|
|
Management Fees |
£8.07 |
£8.07 |
£8.02 |
|
* This was due to the Painting
Contract
It's
interesting to note that when a comparison
is done between previous years, it shows
that the actual Service Charge Receipts did
not cover the Expenditure, in each of the
last 3 years compared, there has been a
shortfall which has been subsidised by the
Sinking Fund which is why the Sinking Fund %
was increased from 3% to 5%.
Comparison
between the Service Charge Expenditure
against actual Receipts
| |
2017/18 |
2016/17 |
2015/16 |
| |
|
|
|
|
Total
Expenditure |
£34,857 |
£31,040 |
£31,040 |
|
Total Service
Charge Receipts |
£26,588 |
£26,629 |
£27,516 |
| |
|
|
|
|
Actual
Shortfall between receipts and
expenditure |
£8,269 |
£4,411 |
£3,524 |
There are
regulations covering the use of the
Sinking Fund in the Lease which can be
viewed here,
however there is nothing which says it
can, or should be used to subsidise the
Service Charges - hopefully someone (the
director,committee or managing agent)
might be good enough to clarify this
point eventually.
With
regard to the calculation of the Service
Charge itself, it clearly states in the
Lease under Clause 3.5:
The decisions which the director and committee
are and have been making over the past years
with regard to the amount of Service Charge
levied could be seen as bad housekeeping at
least for all those decisions could have been
made with the best of intentions for the
residents. Do they not realise that
all they are doing is deferring the ongoing
shortfall onto the families of the residents in
the event when properties are sold.
*
Letter sent to the Managing Agent
by the website owner 9/12/18
Service Charge Contribution.
During the recent AGM I asked: “How much had it cost to
send me the Solicitors Letter dated 1st December, 2017?
”, the company solicitor declined to answer and there
had been no response from either the director or
committee. There has been 2 letters further
threatening letters sent to me on the 12th and 25th
June, 2018 - these will be charged for in the next
accounting year 2018/19.
As I have no idea how much was charged for the one in
2017, or will be charged for the 2 further ones sent in 2018,
I am reducing my service charge contribution with
immediate effect. This will continue until at least the
end of the current financial year, and as soon as you
let me know the actual cost of these items, a
calculation can be made as to what my actual % portion
of the contribution is and the correct amount will be
adjusted. In the meantime I am enclosed my regular
cheque less the reduction.
It is neither justifiable or reasonable that I
should be expected to contribute towards the cost of
sending myself threatening letters, especially when
the use of the Service Charges Funds has been
inappropriate
and therefore under the circumstances, not a legitimate
expense.
The decision has not been taken lightly and one I would
have preferred not to have made, however, given that the
original situation (the unofficial website and it’s
content) could have been handled in a completely
different manner had the director and committee used a
little foresight and common sense, instead they opted
for intimidation and bullying tactics with no thought
for the fact that the residents would have to pay for
their decision.
*
2018 AGM: The managing agent stated
that it was because of the Sinking Fund
remaining at 5% that the Service Charge had
remained at it's current rate for so long.
Note:
(A decision was made during the 2016
AGM that the Sinking Fund would be increased
from 3% to 5% pm from 1/4/2016 due to the fund
being low, the increase was made instead of
increasing the Service Charge.)
