Service Charge - huge price hike - where to go for help?

smileypigface

Richard_Webster wrote: »

If the scheme was set up properly then you it would have been as you said, that couldn't buy the property unless you signed the deed. The deed of covenant would have referred back to the detailed terms in the original transfer which would have set out what you could be charged for. It is very unlikely indeed that you can get out of it - it is only if they forgot to get you to sign the deed of covenant that this might have been the case.

Thanks for your replies - yes, I have fished out the deed and the original transfer document it refers to and your summary above is spot on.

The original transfer states that all dwellings will pay an equal share of the cost of maintaining the shared areas of the development - that a chartered accountant must verify the costs at the end of financial year. Additionally that the calculations must be made available to the home owners.

Interestingly, the financial year has not yet ended so I will be pressing to see a copy of the basis of the calculations that has enabled PforP to set next financial year's charges in advance of the accountant verifying the accounts.

smileypigface

maninthestreet wrote: »

I make the percantage increase for the entire monthly service charge as:

((22.00 - 6.92)/6.92) X 100 = 218%

To be brutally honest, what sort of service were you expecting to get for just £6.92 per month? That's barely more than 2 pints of beer around my way.

The percentage I was referring to was the hike on the Admin charge from £0.90 to £11.83 per month

((11.83 - 0.90)/0.90) x 100 = 1214%

The service I was expecting was the same that has been provided for under £7 a month for the last 4 years - grass cutting, tree and shrub cutting - with the charge for the admin required to arrange those services. Together with a bit towards the maintenance of the child's play equipment - basically the things itemised in my original post. There are 114 dwellings sharing the costs so 9.5K a year for those services seems reasonable to me - however, next year it is anticipated they will need in excess of £31K to deliver the same service.

Doesn't seem reasonable to me I'm afraid.

smileypigface

QTPie wrote: »

Yes, yours is a VERY common set-up these days: quite a few modern developments (especially in cities/towns) have communal facilities (ours include central gardens, private roads, lighting on the pirvate roads (also not maintained y the council), trees etc). Someone has to take care of them and - in all fairness (although I think that management companies charge too much) - someone has to administer that care.

So, by buying that specific house (although it is freehold), you bought into that... Just like we did, with our freehold house, just over 5 years ago. To not pay would probably have repercusions on you and is certainly not fair on your neighbours either.

The costs you are quoted do not seem unreasonable - providing they do a good job of looking after the place.

QT

Yes, I agree with you, more and more new developments have this type of arrangement in place.

And of course I took this into account before deciding to purchase this particular house.

However, it is the extraordinarily large hike in the charge that is causing me concern. For the last 4 years the service has been delivered for under £7 a month per household - if something only cost £7 last year does it not seem to be a disproportionately high increase to now cost £23? Particularly as there has been no increase to the services provided or area to be covered. I am not suggesting I don't pay it - my original question was asking what rights I have to see the detail of how this company has worked out the charge - and who I can approach for help if they won't oblige.

As maninthestreet kindly worked out for me - this is an overall increase of 218% - if your council tax went up by this much (for example) wouldn't you want to know why - and I'm sure you wouldn't consider it a reasonable cost - even if you did think the council did a good job - why does that good job now cost you almost 4 times the amount it cost you last year?

maninthestreet

smileypigface wrote: »

The percentage I was referring to was the hike on the Admin charge from £0.90 to £11.83 per month

((11.83 - 0.90)/0.90) x 100 = 1214%

The service I was expecting was the same that has been provided for under £7 a month for the last 4 years - grass cutting, tree and shrub cutting - with the charge for the admin required to arrange those services. Together with a bit towards the maintenance of the child's play equipment - basically the things itemised in my original post. There are 114 dwellings sharing the costs so 9.5K a year for those services seems reasonable to me - however, next year it is anticipated they will need in excess of £31K to deliver the same service.

Doesn't seem reasonable to me I'm afraid.

£31K a year would be barely enough to pay two people working full-time, when you take into account the overheads any employer has in addition to employee wages. The only thing that suprises me is that the services have been delivered previously for less than 10K a year.

ad44downey

smileypigface wrote: »

The percentage I was referring to was the hike on the Admin charge from £0.90 to £11.83 per month

((11.83 - 0.90)/0.90) x 100 = 1214%

The service I was expecting was the same that has been provided for under £7 a month for the last 4 years - grass cutting, tree and shrub cutting - with the charge for the admin required to arrange those services. Together with a bit towards the maintenance of the child's play equipment - basically the things itemised in my original post. There are 114 dwellings sharing the costs so 9.5K a year for those services seems reasonable to me - however, next year it is anticipated they will need in excess of £31K to deliver the same service.

Doesn't seem reasonable to me I'm afraid.

You can play around with percentages all you like, the fact is your service charge is very low. I don't know what you're complaining about.

smileypigface

Probably because it's not a full time job - and certainly not enough work for 2 full time people - Places for People manage many developments like the one I live on and we receive, what is essentially gardening services by way of about 6 mowings per year (less than one day's work each) and 2 lots of pruning and trimming, 4 lots of other visits to tidy etc. I assume the people employed to do the job earn a proportion of their full time wage from each of several of the developments that are maintained.

It might be surprising that the service has been delivered for less than £10K per year for the last four years - but for those 4 years the accounts have been prepared and audited and found to be accurate - so has been proven to be a true reflection of the costs involved. It is therefore more surprising to me that the costs have risen so disproportionately for the coming year.

smileypigface

ad44downey wrote: »

You can play around with percentages all you like, the fact is your service charge is very low. I don't know what you're complaining about.

For the services I receive the cost so far has been reasonable.

If any other household bill had increased so considerably I am sure you would want to question why if you were in my shoes.

If this was council tax we were talking about everyone would be up in arms that the council had such a cheek to deliver a service for a price for several years but are now hiking the costs far beyond the rate of inflation.

ad44downey

smileypigface wrote: »

If any other household bill had increased so considerably I am sure you would want to question why if you were in my shoes.

.

For the sake of a mere £4 per week, no, actually I wouldn't

You should just thank your lucky stars that you were so undercharged for services previously.

smileypigface

ad44downey wrote: »

For the sake of a mere £4 per week, no, actually I wouldn't

You should just thank your lucky stars that you were so undercharged for services previously.

Perhaps I am just more careful with my money than some other people - and I manage public money for a living so I am used to scrutinising for value for money and apply that to my personal finances too - which is what brings me to the MSE website.

Notwithstanding how much it works out per week/month/day whatever way you want to cut the cake - something that up until now has cost £83 a year is now going to cost £274 a year. I can't believe anyone would just accept this without question.

If the accounts have been audited annually, which they have, then there is documentary evidence that the costs charged so far have been accurate. Which indicates to me that for the increased cost to be so disproportionate to inflation that either I should be receiving more of a service (which I'm not) or something else has changed considerably.

rogerdodger007

smileypigface wrote: »

I bought a property last July (work relocation with good package from employer) which is in a small 4 year old development in a large residential area.

The development is a mixture of types of housing - and types of residents - I am a freehold home buyer and others are on a house buyers share scheme and low cost housing - there are various sized houses and a couple of small blocks of 6 flats. There is a large open green space and a small children's play area with some equipment.

There is a service charge payable monthly for various services.

Last financial year I was paying £6.92 a month - made up of:
Admin - £0.90
Communal Landscaping - £5.68
Play Equipment Maintenance contribution - £0.34

I have just received notice that from 1 April the charge increases to just over £22!
Audit Fee - £0.72
Grounds Maintenance/Landscaping - £5.96
Homeowner Management Charge - £11.83
Play Equipment - £0.34
Surplus/Deficit Brought Forward - £3.74

I rang the office today to ask for a breakdown of why there is such a big difference on last year and why I appear to be paying for different things. I was told that last year's "Admin" is now called "Homeowner Management Charge" - and that the large increase (understatement of the year!) is due to an overspend that has to be covered in the next FY - some overspend!

You're right because if the person who explained the reason for the increase was correct, the newly named "Homeowner Management Charge" fee should be:
old Admin fee + Surplus/Deficit Brought forward from last year
0.90 + 3.74 = £3.64
and not £11.83.

It sounds as though their fees have increased. It could be because they've lost the management of other sites, or wage increases or some people not paying their contributions.
The only way around this would be for the shareholders (you and the other homeowners) to take over running of the management company as somebody else has suggested.
I agree with you pushing them to justify the increase. They are working for you and accountable to you.