SERvIcEchARgES FREQUENTLY ASKED QUESTIONS
What happensifthe flatIwantto buyhas servicecharge arrears associated with it? Thepreviousownerisresponsible forthe arrears–theymustbe paid off prior to sale or included as an additionalpayment with the completionmonies.
Why ismyservice charge so high? others in theblock aren’t paying. What can I do? The Leasehold Valuation Tribunal (LVT)can determinewhether youare liable to payaservice
charge.Besure to check your leasebeforeapplying – itmaybethatyou areobligedtopay a greater share than your neighbours under your lease terms.
Ican’t pay/won’tpay.Whatnow? Youshouldnever flatlyrefusetopay your service charge. Try negotiating with your freeholder/management company. Failingthat, applytothe LVTfor determinationofyourliability to pay.
Themoney is notusedinthewayI would like.What can I do? Your freeholder/management companyisobligedtospend service chargemoniesoncarryingout their obligations as described in your lease. It is notfor aleaseholder to decide if theright decisionsare beingmade. If youthinkacostis notreasonablyincurred, theLVT can determinedwhether the charge should have been paid.
Canthemanaging agent/ freeholder keep increasing service charges? Aservice chargemust reflect the true cost of providingthe relevant service.Ifthisisnot thecase, theLVT candeterminewhether thechargeis payable.
Wepay the service charge but the work is notdoneordone, but of a poor quality.What now? Try to negotiate a reduction with the freeholder/managementcompany. If thisfails,applytothe LVTfor determination.
If there is a dispute between the managing agent or freeholder and oneormoreofthe leaseholders, resulting in non-payment, how canwemake sure thatemergency works are carried out? Theobligation to carryout repairs andmaintenancewillbedescribed in your leaseand oftenexist exclusiveof theleaseholder’s obligation to paythe service charge. TheCountyCourt can enforcethe freeholder/management company’sobligationstocarry out repairs ormaintenanceworks.
Canweuseamediation serviceto resolve our problems?
Indeed.Mediation is a voluntary processwhereby the participants seek to agreeout-of-courthowthey aregoing to resolvetheir dispute. It is oftencheaper to enterinto mediation than takeamattertocourt or tribunal.
Wecan’tagree on theright service charge level.What now? Apply to the LVT for determination.
Themanagement element of the servicechargeistoo high.What can I do? TheLVT is alsoempoweredto determineadministration charges,
suchasmanagementcharges.An application to the LVT can result in a decision of thelevel ofmanagement charge you are liable to pay.●
Mediation is a
voluntary process
Who writes the rulebook?
TheRICSService Charge Residential Management Code(theRICSCode) is theindustrystandardcodeofpractice for anyonemanaging leaseholdpropertyin England, explains GeoRGIana hIbbeRd
The RICS Code is endorsed by the
Government.All RICS andARMAmembers must abidebythe code anditisalsofollowed by theLeaseholdValuation Tribunalswhen determining service charge cases. Propertymanagers governed by theRICS
Codemust know andworkwithinthe law. They areexpectedtobefamiliar with the termsofleases forthe properties theymanage andwillhaveclientmoney protection. In additiontheywillensurethatservice charge moniesand reservefunds areheldina trustaccountand used only forappropriate purposes. They are expected to undertake regularinspections, ensure theproperty is adequatelyinsured,and nottoignorearrears. In alltheir dealingstheyshouldtreat the partiesfairly, ensure confidentiality andhave apolicyfor dealing with disputes between occupiers. The RICS also publishes Residential Property
Standards(knownasthe BlueBook)which provides best practice guidance forestate andletting
agents.Anew editionisdue to be published in October to include block management andwillcomplementthe Service Charge ResidentialManagement Code.●
Georgianahibberdis Associate Director Residential at RICS. Tel 0207 222
7000.Websitewww.rics.org
Go
towww.flat-living.co.uk/information-service- charge-residential-management-code for a link to
purchase a copy of the code WhaTISTheRICS?
TheRICSisanindependentorganisation, actinginthepublic interest. Itsetsand regulatesthe highest standardsof competenceandintegrityrequiredof itsmembersandprovidesimpartial, authoritativeadviceonkey issues for business,societyandgovernment.
58 Autumn2011 Flat Living
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