Service charges and city centre apartments

mean_momma

dmg24 wrote: »

Management companies are not known for being the most scrupulous companies!

Watch out for the block insurance policy renewals. Managing agents often get a hefty commission and it is not particularly in their interest to get costs down. Try to find out if a renewal is due, by how much the costs are set to increase. Also, check if they are mooting pricey terrorism insurance.

If there is inertia in your block, you may be able to become a director and push a vote for self-management. A lot of work, but more control of costs.

Sir_Humphrey

This is something you need to get the solicitor to look into during the conveyancing process. Service charges certainly are not a good thing to have to pay. For large repairs, there should be something called a sinking fund which gradually builds up from excess charges. If that does not exist, you risk being charged extra for big repairs.With flats, it is best to avoid ones with lifts and also ex-Local Authority if you don't want high service charges.

Generali

Sir_Humphrey wrote: »

This is something you need to get the solicitor to look into during the conveyancing process. Service charges certainly are not a good thing to have to pay. For large repairs, there should be something called a sinking fund which gradually builds up from excess charges. If that does not exist, you risk being charged extra for big repairs.With flats, it is best to avoid ones with lifts and also ex-Local Authority if you don't want high service charges.

AIUI, local authorities aren't allowed to run sink funds - another reason to avoid ex-council places.

In the Barbican for example, it's predictable that the lifts need replacing every 20 years. The City of London Corporation (as freeholder) could split the cost over 20 years but is not allowed to (they claim) so split the cost over 2 years only. In a low rise flat that means for 2 years out of 20 the service charge rises to GBP20k!!!

Sir_Humphrey

Generali wrote: »

AIUI, local authorities aren't allowed to run sink funds - another reason to avoid ex-council places!

I do not know the rules, but it would not surprise me if that were true. LAs have pretty tight rules on their spending, and putting money aside for strategic spending could lead to council tax charge capping.

Generali

Sir_Humphrey wrote: »

I do not know the rules, but it would not surprise me if that were true. LAs have pretty tight rules on their spending, and putting money aside for strategic spending could lead to council tax charge capping.

It's what the Corporation's house dept used to claim.