New management company- want service charge up front

[RainbowBrighte]

For many years we have paid the service charge on our flat monthly, about £85 a month or over £1000 a year.

The company was taken over in April, a new company emailed us to say stop paying the monthly rate. I’ve saved this.

They’ve now finally got round to set up payments and they want the whole lot for the year up front! I haven’t got a grand, particularly at this time of year with back to school.

I’ve pushed back and said I will pay the lump I saved April- august, about £400, and set up a new monthly payment for the rest. Will this fly? There’s no agreement I’ve signed as such, the residents association agreed this in a last minute AGM when I was out the country and no info was circulated about it at all. We used to run everything ourselves many years ago, pay just gardening fees etc collectively, but new leaseholders voted against this and it was too much workload for the few who remained willing to do this. I haven’t actually seen agreements they did with the management company tbh.

I would maybe talk to some of your other neighbours and see how they're feeling about it. I agree it's out of order and I absolutely hate management companies but it's like hitting your head against a brick wall with them.

Check your contract & what it says payment and frequency. If it’s monthly in the contract they would need to issue either new contracts or contract amendments.

My previous house had service charges and when the company changed over, then sent through a bill for the year but I continued to just pay monthly without any issues.

Are you sure you actually have to pay it all up front and you weren't just given an invoice as such for the year?

No individual contracts. It’s a shared freehold and they have employed this company to manage everything. From what I see there’s nothing agreed monthly or yearly in the document they have sent

They have replied saying it is overdue, my trigger for this thread. No reply to my actual email with breakdowns of payments, just re-issued as overdue minus the payment . Invoice attached to the email, no content to the email.

The two I know were involved in setting it up and came across defensive. They are in the wealthy retiree bracket and didn’t know apparently that most flats paid monthly. Others I know are tenants, majority are rented. I will try to ask others, but it’s hard to know who.

The two I know were involved in setting it up and came across defensive. They are in the wealthy retiree bracket and didn’t know apparently that most flats paid monthly. Others I know are tenants, majority are rented. I will try to ask others, but it’s hard to know who.

To be honest, id just set up a monthly dd and leave it as that, they cant demand a full year up front and technically, they work for you.

Have you actually spoken to the other residents because im pretty sure they wont all be paying a grand up front either.

Pretty much what I’ve done, alongside informing them of the payment dates and asking them to inform me if the final date needs adjustment. Sent a breakdown of payments

Also, was there a pot of money from before the new company took over? Has that been accounted for?

The reserve fund? Collectively there’s 50k ish

in terms of personal payments the handover is correct

Ok, so its not as if the money from you is desperately needed by the management company to pay for services.

Just tell them you'll pay monthly and it should all be fine.

I thought this was the norm, or at least 6 months ahead. We pay in front in 2 instalments of £2,000 each yes our service charge is absolutely ridiculous.

The reserve fund should not be used for standard maintenance such as gardening, small repairs etc.

its poor that this change was not circulated to all members following the AGM vote. We pay our service fee annually in advance, but this is stipulated in the TP1 which we agree to as part of the purchase of the house.

What does your lease say? That is what you go by, any other arrangment is at the discretion of the freeholder. Our leases state the service charge is due in advance every six months. People are allowed to pay monthly or quarterly by agreement but it can be taken away if they do not stick to the payment plan.

As you are share of freehold you employ the management company, so if you are not happy with the way they collect tbe service charge, instruct them to do it differently.

As others have said it's usually due in advance, so I used to pay £100 a month by DD and then at end of December get a bill for whatever the remainder due was for the following year or if it was less than expected it just went on account for the year after. Which then could be revised after the accounts were completed. But when I was paying the DD it was for a bill that hadn't become payable yet. My new company won't do DD though so I just put the same amount into a savings account and then pay a lump sum when due. If you've had a bill saying it's overdue it sounds like your payment hasn't been made in advance?

It’s standard to pay the service charge in advance rather than in arrears.