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Service Charges: Potentially Reclaim Overpayments. One MoneySaver got £400 back!



  • Fulham_Mark
    Fulham_Mark Posts: 242 Forumite
    Danny. I've replied.

    Property management is fairly uncompetitive and it's hard to know who is good/bad.

    We find our own suppliers for decorating and works and usually save 50% on quote from the property managers.

    It's common for suppliers to offer £150+ cash for being given work.

    I know of one council in London who have a shortlist of 3 companies for work on their estates, all 3 companies are owned by the same person and provide 3 similar but extortionate quotes. Yes the council can be much worse than the private companies!

    I don't know enough about self-management but I'd be careful about what disasters lie ahead when your residents exercise the rights that they may have to take you to tribunals etc. Self-management could bring out all sorts of personal disputes that wouldn't happen if management was done externally.

    In defence of the managing agents, their costs and taxes are huge.
    I'd estimate that £10,000 of agent's fees buys you one day a week of one person's time. Or 5 hours a week once they've been to a few meetings. They may get harrassed by constant callers from your block or spend 75% of their time chasing late payments
  • I work as a Property Administrator for a large retail company who pay an enormous amount of money for service charges to Agents who run retail parks where our stores are located. I frequently challenge the amount we pay (including insurance) as I cannot see where the money is spent. As stated in our leases, each year the Agent is supposed to send a forecast budget for the coming year with a reconciliation of the past year payments but some are very slow in coming forward, especially if they owe us money. My advice is to challenge your Agent and ask for copies of invoices paid etc. I challenged a reconcilation for one of our stores which resulted in a 50% reduction, some thousands of pounds!
  • coffee_king
    coffee_king Posts: 186 Forumite
    First Post First Anniversary Combo Breaker
    I fear this post will require its own full Forum section soon.
    The whole "Management Agents" system is not regulated by anyone(except themselves).

    See the BBC Watchdog video and blog by googling (i'm not allowed to place links on here apparently)
    BBC - Watchdog: Property management fees
    (its the first one on there)

    We HAVE to use
    for our Management
    control the Leasehold.

    MAINSTAY are utter rubbish, they just take our money and ignore all of our requests for even the simplest of things like cleaning and gardening.
    I once didn't have my outer hall carpets vacuumed for nearly 4 weeks!

    FREEHOLD MANAGERS PLC - Part of the Solitare Group - Are even worse, just try getting through on the phone to them. Its impossible, they never pick the phone up!

    Come on Martin - HELP US ALL OUT - launch a full reclaim campaign!
    And whilst your there why not help us all out with as much advise on you can for taking it over as residents as a RIGHT TO MANAGE.

  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Coffee King: the correct procedure is to put complaints into writing as you need a paper trail. If you read the LEASE website which has been linked to on this thread there is everything you ever needed to know about service charges and the right to manage. I thought the Watchdog article was utter rubbish - they didn't mention Leasehold Valuation Tribunals or the Lease Advisory Service just seem to be saying leaseholders have no rights and the situation isn't fair.

    I think the problem lies in that leaseholders are not aware of their rights - certainly our managing agents don't send us the statement of our rights with our service charge bill as is required by law. The system also relies on groups of leaseholders coming together which isn't always possible: my block is full of BTLs or empty flats.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
  • annah1212
    annah1212 Posts: 38 Forumite
    Hi everyone,

    I normally just read these boards rather than posting but this topic is so relevant to me that I felt compelled to find out whether anyone else is in the same position as me. I'm a freeholder paying service charges - and I have no idea what I'm paying for! To cut a long story short, I live on an estate that's a mixture of leaseholders, freeholders and people in shared ownership with the housing association (Places for People) and it's in my deeds that the last-but-one owners of my house, on buying the freehold, agreed to continue paying a "fair contribution towards cleaning, landscaping and maintenance of the estate" and this has now passed to me.

    Since 2006, my service charges have increased from £13 per month to £17 and then £24 per month and I have no idea what I am paying for. No cleaning takes place as the roads are swept by the council, and there is literally nothing to landscape or maintain - there are no communal areas on the estate. I've asked for a breakdown of what I am paying for but Places for People will only tell me it's landscaping and maintenance and will not tell me what specific work is supposed to have taken place. I also discovered that some of the other freeholders refused the last two increases in service charges so are now only paying £13 a month with the agreement of Places for People while I continue to pay £24!!

    Saw a solicitor about all of this yesterday but she advised I'm probably stuck with it and the company can charge what they like, but also said it's extremely rare for freeholders to pay service charges and the whole thing seems odd.

    Anyone got any relevant experiences to share?
  • Fire_Fox
    Fire_Fox Posts: 26,026 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Have you asked for a breakdown in writing by recorded delivery? I would suggest you get together with the other disgruntled freeholders and do this as a unit. Do you have copies of any documentation relating to your purchase which relate to this service charge? You could try seeking advice from the Leasehold Advisory Service who have an excellent free telephone advice line to cover any more complex issues - but do read their website first (linked to earlier in this thread) as you may find your question is covered.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
  • BigPR
    BigPR Posts: 2 Newbie
    This is so timely for me (perhaps because of the credit crunch). I own a propert in Canning Town, East London. Newham Council has contracted Pinnacle to manage my block and a few others in the area. Out of the 10 flats in the block, I'd guess that 50% are bought on Right to Buy (incl. mine). Recently, despite the usual abracadabra that this company does with its estimated and actual charges, I have been receiving bills for works which either have been or are expected to be done.

    Can anyone PLEASE let me know if these managing agents are under obligation to consult with leaseholders before any work is done? Who decides that something needs to be done. I just don't understand why a clean and perfectly tidy communial area needs a new floor, treatment and all else. Can we stop them from carrying out the work?

    The most shocking trick I only noticed today is that ANOTHER "Qualifying Works" notice was received today (22 July 2009). However, at the end of the notice it says "Your comments and responses to this Notice must be received within 30 days from the date of this notice. Your observations must be returned no later than 9th July 2009".

    I then looked at the issue date of the letter/notice. It was 9th June 2009. I am getting the letter more than 30 days after it was issued by which time my right to object or make observations has lapsed. I cannot understand what is going on.

    I first started paying £76.32, now I am paying £168.41. With the new bill notice I will be paying around £250 per month. This is because I always insist on spreading any bill over the maximum period which is about 2 years. They just seem to be doing one work after the other which appears to be quite unecessary.
  • jmbaker
    jmbaker Posts: 5 Forumite
    Akom wrote: »

    We are also currently having major works being carried out under the goverments better homes 2010 scheme. There are huge amounts of confusion from everyone due to lack of communiction around the billing. I for one am being billed between £22-27,000..

    You need to read the lease as you may well find the Council have no power to charge for improvements and can only charge for maintenance, which usually includes "like for like" improvements. The problem with Councils, and Council staff in general, is that they often have no business skills and don't understand that if the lease doesn't allow them to do something, it means the lease doesn't allow them to do something.

    Milton Keynes Council's leasehold department is in complete meltdown; they impose an (unenforceable) 37% charge on all invoices paid, which will be laughed off by the LVT if it equates to much more than £175/year.

    MKC run communal boilers almost all day, every day, forcing residents to open windows to let out the heat - that's right, even when it's 25 degrees outside, MKC refuse to set timers on boilers (because it's too much effort and Council tenants tend to whinge when they don't have on demand central heating in summer).

    MKC have also been busy spending money on improvements and lieing to leaseholders by telling them they are liable for the costs, threatening to take out a charge on their property if they don't pay. In the worst case, they wrote to leaseholders stating they intended to use this route to get cash out of the elderly (something that would constitute a sackable offence for any private sector employee).

    I can speak from personal experience given MKC wanted to charge me thousands for high security metal doors (the kind you find in a prison), backed up by the threats from the legal department (who had concluded I was liable). Yet, after a very sharp email, they admitted that on a second reading of the lease, they had no powers to charge for improvements.

    Read the lease, or ask your solicitor to do it for you, and if the Council are in breach of the lease, don't be afraid to file as many offiical complaints against the staff as required.
  • BigPR
    BigPR Posts: 2 Newbie
    Vis-a-vis my earlier post #38, I have noticed that even though the issue date on the notice was 9th of June 2009 and the 30 days which I had to comment on the notice have expired, the date stamp on the postage envelope was 20th July 2009. The notice arriving the following day.

    In essence, how can a letter be posted more than a week after the 30 day observation period expires? Also the notice only has one estimate when according to the LAS website, there must be a statement for at least 2 estimates.

    Methinks there is a 'cunning plan' behind what Newham Council and Pinnacle are doing here!

    They will be hearing from me first thing tomorrow!
  • jmbaker
    jmbaker Posts: 5 Forumite

    I can see many of you are upset about service charges, and sadly this is a growing problem in the UK after the government encouraged mass flat development (and hence, lots of leasehold property).

    I am the Director of a Management Company after engaging in war against CPM Asset Management. CPM were appointed by Bloor Homes as Directors of the Management Company, and sole suppliers to the Management Company. The stitch up was laughable, with CPM paying themselves huge amounts of commission for appalling service and being the people who tell themselves off for poor service.

    They employed "Hertfordshire Company Secretaries", at a cost of over £100/year to fill in an annual return to Companies House - this task takes about 3 minutes and costs £15. CPM then charge a commission on this work. HCS turn out to be a department of CPM.

    They employed a Herts based property management company to provide cleaning/gardening services, who charged over £300 for two plastic CCTV cameras (and of course, CPM added a management charge).

    CPM carried out a H&S report (for the benefit of the Directors, i.e. themselves), at over £500 (plus commission). Interestingly, the H&S report PDF I received had serious datestamp issues, suggesting it was created after I'd asked for it :-) Naturally, no H&S was ever required, it was merely an excuse to fleece leaseholders (and it contained lots of great information, such as the number of stairs, and how many light bulbs we had installed!).

    In reality, CPM's business model is built around fleecing leaseholders for as much as possible before they are sacked. I know of a number of small management companies who gain 50% of their new business from ex-CPM accounts!

    And after we'd appointed new Directors, and specifically told CPM that they were no longer Directors and should return all assets (money), they helped themselves to monies and gave us what they felt we were owed. CPM were not Directors and had no right to pay themselves, and the money was being held in a Barclays corporate account (Barclays need to clamp down on this activity).

    The moral of this story is, Management Companies only work with leaseholders as Directors. Building companies don't care, so ensure they have not set up such an arrangement when you buy a flat. And, if you do have a useless company such as CPM in place, contact the bank and have the account frozen at the point of new Directors being appointed!

    I hope a future government will introduce legislation to clamp down on this behaviour.
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