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Issue No. 110 Autumn 2014

Federation of Private Residents’ Associations Newsletter

9 Q A

Late payers’ penalty A lot of the directors’ time is wasted in sending reminders to leaseholders who do not pay their service charge on the due date or who pay the wrong amount. To encourage prompt payment we recently informed everyone that in future we would impose an administration charge of £30 for late payment. However, one leaseholder has said that this is illegal. We would be glad of your opinion on this matter. Although our lease agreement does not state explicitly that we can levy such a charge, it does state that the lessee shall “pay all rates taxes assessments charges impositions and outgoings....assessed or charged.... upon the owner etc.” FPRA Hon Consultant Mary-Anne Bowring replies: Simple. No, this is not illegal. I refer you to Schedule 11 of the Commonhold and Leasehold Reform Act 2002, which you can read up on at, the home for UK legislation. Your only consideration is whether £30 is reasonable and I would say from my experience it is.


send her and her lawyer an invoice and wait till Probate is granted? I am worried that we won’t be able to pay for necessary work on the house. She will inherit the flat. FPRA Hon Consultant Bernie Wales replies: The mother was the leaseholder of the flat. As such she was liable for payment of ground rent and service charges, in the normal way. Having died, she is still liable for payment of ground rent and service charges. You should send demands addressed to her name, adding “deceased”, at the address previously given for service of documents – which from what you say, seems to be at the flat. As executor of her mum’s estate, the daughter is required to handle the finances of the estate – which will include payment of the ground rent and service charges becoming due. Should payment not be made, within the time stated in the lease, then legal proceedings could be commenced. Those proceedings would be addressed to the mother’s name followed by “deceased”. The inheritance which you mention is of no concern. The mother remains the leaseholder until such time as an assignment of the lease takes place (a sale of the flat). Now this may be to the daughter, or someone else. But until such time as a Notice of Assignment is sent to the freeholder, no change of leaseholder has taken place and therefore the mother deceased continues to be the leaseholder and liable for the charges. For the sake of good communication, it might be worthwhile sending copies of the demands/reminders/statements to the solicitors handling the probate.

Consulting, or not Q A

Do we need an S20 for insurance renewal? Do we even need to inform residents of our decision, apart from politeness and transparency of all the different quotes? Also, may I ask you whether we need an S20 for utilities renewal, eg electricity? We are a block of 97 flats and self-managed. FPRA Hon Consultant Yashmin Mistry replies: A “qualifying long-term agreement” is an agreement entered into by the landlord with a wholly independent organisation or contractor for a period of more than 12 months i.e. for an agreement over 12 months and 1 day. (Agreements before 31st October 2003 are exempt.) Although it is not spelt out in the Act, it is safest to assume that this would include ongoing contracts with no specific termination date.


Leaseholder deceased The owner of one of the four flats in the house I manage died some months ago, without I believe leaving a will. Her daughter, who lives in the flat (although not officially a resident in the house), says that Probate has not yet been granted and that she is not liable for service charges or other expenses. She says she is the Executor. I presume I need to

Landlords must consult where the amount payable by any one contributing leaseholder under the agreement in any accounting period exceeds £100. Thus, in a property with unequal service charges, the landlord must consult all leaseholders if any one of them would have to pay more than £100 in any one year. The figure is to be calculated on the basis of the leaseholder’s total contribution resulting from the agreement, including VAT. If consultation is not undertaken, the landlord may not be able

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