Service charge demands for an overseas landlord

What happened?

An overseas landlord, Tracy, was shocked to receive a demand for £9,000 in unpaid service charges despite never being sent the original bills.

The issue

• Tracy, who lived abroad, directly communicated with the freeholder and gave them her up-to-date postal and email addresses.
• However, the Leasehold Management company handling the property did not have her correct contact details and never checked with the freeholder.
• As a result, three years of service charges went unpaid, and the debt was escalated to solicitors.

What went wrong?

• Tracy had no idea the charges were owed until she received a demand from a solicitor.
• The Management company said the service charges were correct but waived the legal and admin fees as a gesture of goodwill.

What the investigation found

• The Management company should have taken reasonable steps to get Tracy’s correct contact details, especially after years of no response.
• They also failed to inform the freeholder that service charge payments were overdue.
• These failures caused unnecessary stress and confusion.

The outcome

The Ombudsman awarded Tracy £100 in compensation for the distress caused by the unexpected demand.

What we can learn

• Management companies must make reasonable efforts to contact property owners, especially if they’re overseas.
• Accurate records and communication are key to avoiding unnecessary disputes and legal action.

Please note that all names in this case study have been changed to maintain anonymity.