HELP: Managing Agent claiming for historic service charges

Hi guys,

I was wondering if you experts could help me. This is the situation; I live in a block of 15 flats that has a managing agent and have been paying an annual service charge of an amount they calculate.

It recently came to light they had not compiled audited accounts for the last 4 years. So they did these (verified by 2 leaseholders) and surprise surprise discovered they had not charged us enough. Therefore they have made a claim for a top-up to cover the higher costs (they basically undercharged by about 20% for each of the four years).

Now within the new accounts are some charges i disagree with (eg gardening charge) and what confuses me is they dont highlight a specific area where the miscalculation has arisen. Rather they just say we should each pay a top up.

My questions are:

1, Do I have any comeback in highlighting the unreasonable gardening charges?

2, Is it a legal requirement to produce audited accounts annually?

3, Can the managing agent legally claim back this money, given they did not produce accounts?

Any help very much appreciated.

Cheers, ben

Yes is the short answer to 1 and 2 and I'm not sure on point 3, although I suspect that it may be covered by the terms of the agency agreement between the management company and the managing agent.

Who are the directors of the management company?

Just on point 1, all you can really do is make a point of highlighting what you feel is an unreasonable charge-if the work was done, it still has to be paid for I guess-you should certainly ask for a full breakdown of the charge to verify same, and maybe that the gardening work is tendered from here on out?

Are you an apartment owner? If so, its not so much an us and them situation. You as an apartment owner are a member of your own management company and have obligations to educate yourself about those obligations.

Trawl through some of the other threads adn you'll see what I mean.

mf

yes i am the owner of one of the flats.

i just dont know what the law says about this kinda stuff. it feels unfair they can get away with not auditing accounts and then come back years later claiming for more money

The Management Company are ultimately responsible. When were the Agents appointed ? How long have you lived there ? If they are seeking money before you lived there it is not your problem. I would be most concerned about the Audited accounts and as to whether an Accountancy fee was charged in the years you have mentioned. Furthermore is Insurance been paid for and within the complex ??

There is something about this that doesn't make sense. It should have been fairly obvious in the first of the 4 years if there was undercharging. The money would simply have run out...how this wasn't spotted until now doesn't make sense unless the managing agent is going to claim that they didn't charge their own fee (in which case 20% for mismanaging would seem pricey).
Do you know why it was that it was only now discovered?
I personally would not pay until I could satisfy myself to this question. If it is the agent fees that weren't collected I would look for them to share the pain and propose that 50% of the undercharge be deducted from their fee.

Also it is my understanding that annual returns should have been made. There will be fines for not doing this. We were charged for a late return, the agent included it in expenses, but I spotted it and made them refund us. Ask for a detailed line by line breakdown of the expenditure and review it/ have it reviewed.

have lived there for last 5 years and they are claiming for underpayment in last 4 years.

Apologies if this is a stupid question. What is the difference between a management company and a managing agent? I thought they were one and the same?

Thanks for all the advice guys - very helpful

A managment company is a legal entity, the members are the owners of the property (or at least that's how it should happen).

The managing agent is the property manangement company appointed by the managment company to look after the day-to-day running/upkeep of the premises.

If I understand you then the agent is claiming it didn't recover it's own fees. In this situation I would be inclined to meet them half way if they have been providing a good service.
It's a bit rich to be looking for payment for 4/5 years in arrears, and this must be like the €20 they found in the trousers before they go into the wash so I am sure they would be amenable to a deal.
Would be interested to know how you get on.