Managing agents demanding service charges even though they owe me money

[Oodie]

I own a leasehold flat in a small block and last year, against all the wishes of the leaseholders the managing agents insisted on carrying out external redecorations. Each leaseholder paid out several thousand pounds and the work was carried out to a very poor standard and not finished. Apparently, there was an "underspend" of ten thousand pounds which means that we are each owed a refund of over a thousand pounds.

The managing agents are now threatening me with bailiffs if I don't pay a further thousand pounds for this year's service charges despite the fact that I am in credit. Apparently, the refunds/credits will not be issued until September.

I don't have the money and I am reluctant to get into further debt, do I have to pay?

Your lease will almost certainly say that you cannot “set off” credits against debits. So the fact that you’re in credit for one type of expense does not mean you can set it off against a debt for another expense.

The “underspend” may be being held in case of repairs being needed to the recent works (common for any issues to pop up in the first year), in which case they can’t use it to cover regular costs.

It’s a pain. But overall you probably do need to pay it.

In theory you could challenge the arrangements but you’d need legal advice/to go to court etc which will cost you more than the thousand anyway.

Thank you for the reply, I thought that might be the case.

Join the National Leasehold Campaign Facebook group. You'll find lots of support and advice for leaseholders taken for a ride by their management companies/freeholders

I am a member of that group.

Once this stuff is sorted, you could look into Right to Manage. If you/ your block qualify you can get rid of the managing agents completely.