There have been a couple of interesting ‘try ons’ by flat owners, trying to avoid having to pay service charge. You know there is a rule that a landlord can’t recover service charge for expenditure incurred more than 18 months before the service charge demand. But nearly every service charge arrangement works on the basis that the landlord will charge something on account, and then have a balancing charge at the end of the year when the accountants have checked all the figures. So, in this particular case, the landlord charged ‘on account’ of the expenditure well within the 18 month period, but the final balancing account didn’t come through until more than 18 months after the actual expenditure. The tenants tried to argue that none of the service charge could be levied, and what’s more they should have their advance payment back. Their argument was that service charge was only what you paid when it was finally calculated, and that advance payment wasn’t actual service charge, just a kind of loan. The court disagreed. The flat owners’ case probably wasn’t helped by the fact that the service charge was actually in credit, so that there was a small balance due back to the tenants at the end of the year, rather than payment required from them. But I admire their cheek in coming up with an ingenious way to try to avoid paying service charge.

In another case, which doesn’t seem quite so fair, the tenants objected to having to pay a big service charge for some repairs which only cost so much because the landlord had neglected to do the repairs for several years. The law says a landlord can only recover a service charge amount which is “reasonable”. The flat owners’ argument was that it was unreasonable to let the damage mount up. Unfortunately, the court took the view that the only thing which had to be reasonable was whether the cost at the time was correct for the work needed, not whether the landlord was reasonable in not doing the work earlier.

According to the Council of Mortgage Lenders, there were 78,400 repossessions in the five years to 2007. They now forecast that this will rise fivefold to about 350,000 during the next five years. In fact, it seems that in about 25% of the properties now going into residential auctions are repossessions. The only ray of good news from this for estate agents is that it will perhaps cause sellers to realise they have to drop their asking prices when they see similar properties going at lower figures at auction. The agony will only end when sellers and buyers finally start to agree on the value of properties.

The one big attraction of a tracker mortgage is that the interest rate on your mortgage will definitely go down if the interest rate being tracked goes down. So if the mortgage is tracking the Bank of England base rate, any cuts must automatically be passed on to the borrower. This is particularly valuable when many lenders are simply not passing on rate cuts, but instead taking advantage of their cheaper borrowing to make bigger profits. But even tracker mortgages aren’t always what they seem. Many of them have conditions in the small print saying that the rates only drop until they reach a specified floor level. Even if the Bank of England base rate carries on dropping to 1%, the mortgage rate you pay will reach its floor and stay there. It’s called a collar. For example, Nationwide will not pass on any cuts if the base rate drops below 2.75%. So anyone taking out a tracker at the moment should definitely check the small print on this.

The money spent on personal searches is often a total waste, because most buyers’ solicitors won’t rely on them. Last month, Birmingham Trading Standards investigated how accurate personal searches were. They randomly selected some estate agents and checked the local searches in their HIPs. It turned out that most of them were inaccurate. One even had the property in the wrong county, and another failed to pick up any of the ten planning decisions. These new search agents may be authorised, but using some of them is a bit like getting in a late-night mini-cab – usually better to wait for a bus to come along. I bet the insurers who back these searches are going to be picking up a large tab in the future.

I wouldn’t rely on a pesonal search in a HIP for a property we are buing for a client. We’ve come across ones where the search agents completely failed to spot the planning permissions.. So now we won’t even think of relying on a personal search in a HIP. We’re always going to get our clients to let us do a proper official search, or at least a personal search done through a genuinely reliable search provider – one who has been around for years, not someone trying to cash in on the HIPs gravy train.

It is a year since HIPs were introduced. It’s obvious they are a waste of time. I’m sure no buyers actually read them. One problem which is emerging for sellers is that they have to replace the local search after six months. In the current market, it is not at all unusual for properties to be on the market for a few months, then there’s a potential purchase which falls through, and before you know it the sellers are having to pay out more money to keep the HIP up to date, still without actually getting any money in from the property.