Are your Service Charges Safe?

Levene said: “We have received a number of calls from worried members as well as those with independent building owners or managing agents. Our Members have

been receiving contradictory and confusing information from the banks and other sources. Even the Financial Services Authority (FSA) has failed to respond to us.”

Which? personal finance campaigner, Tori Watson, insists the matter cannot be ignored: “The FSA needs to urgently get to grips with consumers’ concerns about the security of their money. It’s been over 15 months since the collapse of Northern Rock but instead of answers, the FSA has come back with yet more questions. Instead of stalling, the FSA needs to find a way to tackle the problems caused by temporary high balances and per-institution payouts. It is difficult to justify the instances in which consumers’ deposits are not protected.”

Federation Chairman Bob Smytherman added: “Small businesses (including most blocks of flats), have the same protection as individuals up to a maximum of £50,000.

In addition, we understand that where monies are held in trust by a larger organisation (such as a building owner or managing agent) that does not qualify as a small business,

protection is available provided that for each individual account held, the holder of the account writes to the bank advising them that monies are held on behalf of individuals and the bank acknowledges this.”

The £50,000 limit applies to an individual so will include any other deposits that individuals may have with the same bank. The FPRA has long campaigned for clear protection of flat owners’ funds. The current situation is a reminder of the need for

flat owners’ money to be protected from not only defaulting banks but also from defaulting (or dishonest) agents, freeholders & others. The FPRA are lobbying Government to obtain the level of protection required.