Management Fee

Obi167

Hello,

About a year and a half ago, I moved into a new build of 8 flats. On purchasing it was told there would be a management company set up when the last flat was sold and I would become a director, which has now happened. I was also told there would be a management fee of around £200 pa to cover insurance, maintenance etc.

Recently we had our first AGM and the main point on the agenda was the management fee, which is being done through a management company and the amount will be £75 pcm.

Do people find this excessive? what are other people paying in similar situations?

I have been told that this may go up or down once it gets started (and we were also find by Company's House for not registering, which has added to it).

One of my main concerns is - I don't know if I would have bought it if the management fee was £75, and it makes the place look less attractive to potential buyers if I want to sell.

What do people think?

Jomo

Obi167 wrote: »

Hello,

About a year and a half ago, I moved into a new build of 8 flats. On purchasing it was told there would be a management company set up when the last flat was sold and I would become a director, which has now happened. I was also told there would be a management fee of around £200 pa to cover insurance, maintenance etc.

Recently we had our first AGM and the main point on the agenda was the management fee, which is being done through a management company and the amount will be £75 pcm.

Do people find this excessive? what are other people paying in similar situations?

I have been told that this may go up or down once it gets started (and we were also find by Company's House for not registering, which has added to it).

One of my main concerns is - I don't know if I would have bought it if the management fee was £75, and it makes the place look less attractive to potential buyers if I want to sell.

What do people think?

One of the main things buyers should check up on when buying a flat is whether it is being maintained properly. If it wasn't and there was no fee to pay then I would be worried!

Initially there shouldn't be too much that needs to be done except for cleaning, gardening and insurance but as time goes by you will no doubt expect internal and external paintwork etc. etc.

If you aren't paying enough per month or only just enough to cover the yearly costs then you will not develop a sinking fund. This is what will pay for all future outlay so you do want to pay more money to build this up.

If your management company is doing their job right they will get this amount right, the last thing you want is to have to dig deep for a large sum of money nearer the time to pay for essential work that needs doing.

I would say that £75 is quite a low amount, I know someone who pays abit less but they don't get their windows cleaned....and it might depend on where the flat is..it might be more expensive in a city etc.

I pay £76 per month which I know is quite low and not enough to cover major works we need doing but our problem is pursueding other residents to agree to paying more...and in this climate as well!! Impossible!

Ladybird20

...on another property i own (not the one i have recently posted about) there was a management fee of 50.00 pcm....and i have owned that property for 10yrs.Recently scottish power has read "the communal meter" and it has produced a shortfall of 10K.......(yikes) as apparently in the passed it was always estimated.Someone from the block of 20 flats or so has taken the challenge on to have this debt wiped out due to the negligence of the management company, and more recently that 50.00 has been upped to 90.00.....as the management company was running on a loss......hmmmmm so your 75.00 seems average i would say.....jmo......

Jomo

Ladybird20 wrote: »

...on another property i own (not the one i have recently posted about) there was a management fee of 50.00 pcm....and i have owned that property for 10yrs.Recently scottish power has read "the communal meter" and it has produced a shortfall of 10K.......(yikes) as apparently in the passed it was always estimated.Someone from the block of 20 flats or so has taken the challenge on to have this debt wiped out due to the negligence of the management company, and more recently that 50.00 has been upped to 90.00.....as the management company was running on a loss......hmmmmm so your 75.00 seems average i would say.....jmo......

Yes well I did actually say that it was low actually, I think £90 is more realistic if a decent sinking fund is to be considered.

devon_guy

My fee is just shy of £100 a month so I'd be quite glad to have yours!

Ladybird20

Hi Jomo ,,i added my comment as an example of how things can go wrong which you wouldnt expect , hope it helps though , i would have never myself invisaged 10yrs ago that it would be upped so much ,,,,

Jomo

Ladybird20 wrote: »

Hi Jomo ,,i added my comment as an example of how things can go wrong which you wouldnt expect , hope it helps though , i would have never myself invisaged 10yrs ago that it would be upped so much ,,,,

Oh I know alright!! We were in a similar position and the service charge more than doubled....

It still isn't enough though, what a rip off Britain this is!

Obi167

Thanks for the help guys, it makes me feel better about it, like i said my main concern was how it would effect saleability, but it appears to be standard or even low.

I think between the 8 of us, the communal electricity bill would take a few hundered years to get to 10k - i presume the property you own is in a large complex or block? - thats one scary bill (once had a 9k gas bill just for me, but thankfully it was a misplaced decimal point!).

Jomo

Obi167 wrote: »

Thanks for the help guys, it makes me feel better about it, like i said my main concern was how it would effect saleability, but it appears to be standard or even low.

I think between the 8 of us, the communal electricity bill would take a few hundered years to get to 10k - i presume the property you own is in a large complex or block? - thats one scary bill (once had a 9k gas bill just for me, but thankfully it was a misplaced decimal point!).

Ha ha, bet you were relieved!

Don't get me wrong, your £75 might be right, it all depends on what the services cost at the end of the day....I think people tend to charge more for cleaning, gardening etc. when it's for flats...they can get away with it! All they do is do a quick once over though..but that's the nature of the game I'm afraid.

I'm sure you can request to see the accounts though....if you want to see for yourself.

For myself I'll be glad to buy myself a house where I'm in control of all repairs and maintenance....it's the only drag to 'flat' dwelling for me...

Ladybird20

to obi 167...yes its an old grammer school conversion of 20 odd appartments or so,,,and it was over he period of 10 yrs,,,,,,,its still being reveiwed of who is at fault and if people can pay of there own deficit ??