Leasehold management charges - how much do you pay?

Leaseholder49

Quick survey - just wondered what other leaseholders pay for their management charges? I mean just the charge for the freeholder managing the services they provide, not the charges for the actual services themselves (e.g. maintenance, gardening insurance etc).

Thanks!

Fire_Fox

It varies hugely across the country so your straw poll will not achieve meaningful results: often the management portion of the charge is a percentage of the total, I *think* ours is 20%. Best to ask friends, colleagues and acquaintances what they pay or ring round a few estate agents and ask what is charged at different blocks in your area.

Leaseholder49

OK I'll try that. Thing is, mine has just gone from a % to a flat charge, the same accross all leasholders regardless of which block they are in. This means I have gone from paying virtually nothing (my 'block' has nothing communal, just 2 self-contained maisonettes, so the service charge only includes insurance and occasional minor repairs, about £250 over last 10 years), to £250/year just for the management.

So I pay £40/year insurance, average £25/year in maintenance, and £250/year for them to manage that...

Shouldn't complain, I know the numbers are small, it's just the massive increase (and potential for it to happen again), that concerned me a bit.

sheddy7

Our service charge management fees for the flat we have just bought have gone up massively for next year for some unknown reason. Annoyingly, I can't find the statement the previous owners received for the current year at the moment but I do have the one previous to that (07/08).

In 07/08 they specified and charged 15% of the total service charge.
For 09/10 there is no exact percentage stated but it approximates to nearly 50% of the total!

Can anyone tell me if it is worth complaining or enquiring about this or can management companies just charge what they like?

EDIT: Ah, so it was your reason for posting too Leaseholder49! We're the same, the total figure for the year is still not huge but it does seems a bit of a swizz, doesn't it?

Fire_Fox

Leaseholder49 wrote: »

OK I'll try that. Thing is, mine has just gone from a % to a flat charge, the same accross all leasholders regardless of which block they are in. This means I have gone from paying virtually nothing (my 'block' has nothing communal, just 2 self-contained maisonettes, so the service charge only includes insurance and occasional minor repairs, about £250 over last 10 years), to £250/year just for the management.

So I pay £40/year insurance, average £25/year in maintenance, and £250/year for them to manage that...

Shouldn't complain, I know the numbers are small, it's just the massive increase (and potential for it to happen again), that concerned me a bit.

By law all charges must be "reasonable" (Landlord-Tenant Act 1985 IIRC). Have you formally requested - in writing by recorded delivery - information how the MC arrived at the figure of £250? Have you read your long lease to see if a percentage or maximum amount is specified? This website is superb for explaining your right to challenge any charge that is not reasonable:
http://www.lease-advice.org/publications/documents/document.asp?item=14

Leaseholder49

sheddy7 wrote: »

In 07/08 they specified and charged 15% of the total service charge.
For 09/10 there is no exact percentage stated but it approximates to nearly 50% of the total!

mine is now about 80% of the total...

@Firefox - they gave an detailed breakdown of the management charge when they introduced the changes, to the level of £5.32 for office equipment, £27.49 for people staffing the office etc.

All they are doing is covering the costs of running the service, so I don't see that that in itself is unreasonable.

Perhaps there is a case that it is unreasonable to charge the same rate to all leaseholders rather than a %, as it must cost more to manage a building which has cleaners, lifts, communal gardens etc, but I don't see how I could argue it.

Lease doesn't state a % or a maximum. I think the term is uses is 'resonable proportion' of the cost of maintaining the building and the costs associated with the management of this service.

Squish_21

I pay as and when as opted not to join the sinking fund. We've been here 3yrs and havent had to pay for anything as yet.

Although it may be due a re-paint later this year which im told will cost approx £1,000(!).

Fire_Fox

Leaseholder49 wrote: »

mine is now about 80% of the total...

@Firefox - they gave an detailed breakdown of the management charge when they introduced the changes, to the level of £5.32 for office equipment, £27.49 for people staffing the office etc.

All they are doing is covering the costs of running the service, so I don't see that that in itself is unreasonable.

Perhaps there is a case that it is unreasonable to charge the same rate to all leaseholders rather than a %, as it must cost more to manage a building which has cleaners, lifts, communal gardens etc, but I don't see how I could argue it.

Lease doesn't state a % or a maximum. I think the term is uses is 'resonable proportion' of the cost of maintaining the building and the costs associated with the management of this service.

Are you confident the MC are not charging more to blocks which have the additional services you list? From what you have said, I am struggling to see on what basis you can dispute the charges. The only avenue is to encourage your fellow leaseholders to all dispute the charges and hope that the management company quits, leaving the freeholder to do the work himself, cutting out the middle man. However he could still make the same admin charge and you'd be back to square one.

Alternatively get your fellow leaseholders together and apply for Right to Manage - however do not underestimate how much work is involved in managing your own property, however small. There are many pieces of health and safety and consultation legislation to comply with, and you would need to carry out essential maintenance regardless of whether all leaseholders contributed and whether there is any money in the kitty.

GarySt_2

You dont say whether the Managing Agents are employed by the Freeholder or a Residents Management Company.
If you as owners are shareholders of a RMC that employs the managing agents they report to those that have stood as directors and you should make enquiries about involvement as a director, go to the AGM or at least ask whats going on. If the Managing Agent is not wanted you can change him to another.

If the Managing Agent is employed by the Freeholder you apply for Right To Manage to get him out and to take control. You do not need any knowledge as stated by others as your new Managing Agent will guide you. You find a Managing Agent you can trust and on the basis that he is going to get the job he will do all the work for you. You then have total control as the Managing Agent will then be employed by you as owners. It just means a few of you who stand as Directors on the new RTM company control the new Managing Agent.

As a landlord I have been involved in the removal of Management Companies several times without any problems. Setting up the RTM and notices etc takes some time but its worth it in the long run.

Good luck