Service Charge - Tenant of LL responsibility?

bettie_paige_2

My bf and I are in the process of buying a house "in the country". I currently own my flat in London where I have a low (ish) mortgage and therefore it makes sense to keep it on and rent it out, as the rental value in that area (Putney, SW15) is pretty decent.

One thing I don't know though is whether I as a landlord, or my tenant would be responsible for the service charge payments? They are pretty hefty (another £2400 a year) and although I would love it if I wasn't responsible, I don't think this will be the case!

Could anyone please advise?

thanks,

bettie

Fire_Fox

Service charges are the legal responsibility of the leaseholder, since they are for the care and maintenance of your property. If the service charges are not "reasonable" they can be queried and even challenged:
http://www.lease-advice.org/publications/documents/document.asp?item=14

Do you have permission to let from your mortgage provider? You may also need this from the freeholder - check your long lease. Also you will need to register for income tax, tho the service charges and mortgage interest can be offset. Lastly you will need safety certificates.

princeofpounds

You are responsible.

bettie_paige_2

Thanks FireFox. Am talking to my mortgage provider to convert to a buy to let mortgage which although will be more expensive than what I'm currently paying, will be better than a consent to let from my provider, as we plan on renting long term and would need to convert to a BTL anyway within 3 years.

Flat is share of freehold so that shouldn't be an issue. Having some work done to it at the moment to update the electrics, so getting the safety certificates at the same time.

Fire_Fox

Sounds like you are on the case! If it's share of freehold, why are your service charges so hefty? Do you have fancy stuff such as concierge and gym?

bettie_paige_2

Good question, which is why I am reading the webpage from the link you provided with interest! No fancy stuff at all, literally just bins/garden. They like to re-tarmac the carpark approximately every 2 years and paint the exterior... so I have no clue!

Fire_Fox

That entire website is ace, the page I linked to is only the start of it ... you will also need to read your long lease to see what is and is not chargeable. Seems a bit excessive to re-tarmac and re-paint so regularly.

Listed building? Full-time caretaker/ gardener? Lots of lifts? Sinking fund? Are you receiving breakdowns of the charges so you know how much you are paying in each category? Do you get to vote on who sits on the board of directors? Do you know how much similar properties in the area pay in service charges?

My parents block partially self-manages and they pay about half what you pay for a duplex apartment in a stunning listed mill. Note this is in West Yorkshire, so staffing costs will be lower than London. However they have a large car park, private roadway and gardens to maintain. Their service charges were sufficient to save to buy the freehold a couple of years ago.

bettie_paige_2

External management agent managing it for us, so they have their costs too I suppose. The gardener worked on a tuesday but just retired. 4 blocks in the complex, all "duplex" style maisonettes. No lifts, no entryphone, no concierge... literally I am paying for some bins and some tarmac.

But... it is London....

I think similar properties are managed by the same management agent so they pretty much call the shots. The board of directors is made up of older residents who are more worried about safety (so we had railings put round two sides of one block) and if there are non residents using the car park, so it is pretty much a lost cause!

I should add that I pay an extra £2-300 to the management agent for the buildings insurance, this isn't covered either!

Jomo

bettie_paige wrote: »

External management agent managing it for us, so they have their costs too I suppose. The gardener worked on a tuesday but just retired. 4 blocks in the complex, all "duplex" style maisonettes. No lifts, no entryphone, no concierge... literally I am paying for some bins and some tarmac.

But... it is London....

I think similar properties are managed by the same management agent so they pretty much call the shots. The board of directors is made up of older residents who are more worried about safety (so we had railings put round two sides of one block) and if there are non residents using the car park, so it is pretty much a lost cause!

I should add that I pay an extra £2-300 to the management agent for the buildings insurance, this isn't covered either!

OMG!!!!

Are you sure you aren't being ripped off???

Over £2k a year and building insurance isn't included???

We pay approximately £900 per year which includes building insurance, electric, gardening, cleaning, window cleaning, think that covers most...

I don't live in London but it still sounds very expensive

Fire_Fox

bettie_paige wrote: »

External management agent managing it for us, so they have their costs too I suppose. The gardener worked on a tuesday but just retired. 4 blocks in the complex, all "duplex" style maisonettes. No lifts, no entryphone, no concierge... literally I am paying for some bins and some tarmac.

But... it is London....

I think similar properties are managed by the same management agent so they pretty much call the shots. The board of directors is made up of older residents who are more worried about safety (so we had railings put round two sides of one block) and if there are non residents using the car park, so it is pretty much a lost cause!

I should add that I pay an extra £2-300 to the management agent for the buildings insurance, this isn't covered either!

You may also be paying for some communal electricity (?external lighting), cleaning of any foyers or corridors or external windows, maintenance of fire escapes, testing of fire alarms, basic caretaking (changing lightbulbs/ fixing roof tiles), etc. There is usually more than you think. My parents buildings insurance is around £120 so yours may need re-tendering (rebuild costs will be higher in London BUT my parents block is listed).

Having said that I think you are being ripped off by a company who think they can charge the earth because it is London. I would strongly recommend you formally request a breakdown of the service charges for as many years as the managing agents will let you have. This must be supplied within one month: once you have your facts together you can try to get other leaseholders on board.

You can and should do something. Your sale price will be better if you have a reasonable service charge, and these retired people are being ripped off too. Charges must by law be "reasonable" and "reasonably incurred" so they don't have to be super-cheap but they do have to be fair and they do have to be justifiable.

It is worthwhile financially - I am three years into a dispute and every time I dig I find some new incompetence/ fiddle. We were charged £1500 in just one year for lightbulbs (not including man hours to fit). We are just fifteen apartments with two types of internal lamp both available on eBay for a couple of quid. I calculated that they would need to change every single bulb every two weeks to make it possible to spend that kind of money. :rotfl: I am fully expecting to have £4000 of disputed charges written off as I know I have an excellent case and a full paper trail.

pie81

woah that is high. i live in london (highbury) and my service charge is £900 a year... and I thought that was high. admittedly mine is just a flat in a house conversion, not a block, so fewer communal areas but STILL yours sounds very high.

in fact I read another post on here just now where someone was considering buying a Barbican flat ... service charges were £900 to £1000 even with all the Barbican's communal areas, etc.

I suggest getting a breakdown from the managing agent - and then seeing what looks ridiculous. as mentioned above you can challenge if charges are unreasonable.

and indeed if enough of you leaseholders get together you could even apply for the right to manage (bit of a headache though).