Service charge has doubled

chris.lewis

Hi guys,

After some advice about my situations:

Bought a two bed flat in Feb 2008 off Crest and was given an example of my service charge and was told the service charge would be 800-1000 per year, the first two years the charge was £450 every 6 months which was fine, then the management company changed to consort property management.

I have just got my new statement and it has rocketed to £750 every six months, I rang to ask why the increase and they told me because the last management company didn't do things they were meant to e.g. Clean windows, maintain the landscaping, plan for redecoration every four years or have a reserve fund also our buildings insurance cost has increased.

I understand and accept the new charges however I want to know if the developer in this case crest were wrong for informing me my service charge would be less that it is as they didn't include the relevant charges.

I understand that I cant reduce the service charge I just want to know if Crest have done something illegal by saying the service charge would be less that it is.

tattyuk75

Did your previous management company provide annual accounts? I know my management company didn't for the first two years and it was only after seeing them that I could see what maintenance SHOULD have been done and how often etc. Seems they were paying contractors to carry out work that the contractors were simply not doing. I think you and the fellow residents of your block may also run your own management company to cut costs if that is something you all would be interested in. Also, is there anything in your tenancy agreement regarding the service charge and management company? Maybe some small print that could assist you in taking further action.

discplayer

chris.lewis wrote: »

I understand and accept the new charges however I want to know if the developer in this case crest were wrong for informing me my service charge would be less that it is as they didn't include the relevant charges.

I understand that I cant reduce the service charge ....

You can challenge unreasonable service charges although you suggest you think the new level is reasonable (just unexpected). Have I understood you right?

BitterAndTwisted

It's the reserve fund which has most probably been the reason for the increase. It's only sensible to have a reserve fund/sinking fund as that means you may not get a whopping-great bill for a couple of grand in a few year's time when something significant needs to be repaired or replaced.

ttd14

You can only have a reserve fund if the Lease provides for it, the budget you receive should clarify if you are paying into a reserve fund. If there is no mention, then the managing agent cannot recover it!

I have experienced similar situations with man co's and landlords / developers, it may be that at that time (i.e. when you purchased) this was to the best of their knowledge. Now the new managing agent has taken over, they have realised this.

I woudl agree with 'BitterAndTwisted' in the a sinking/reserve/cyclical maintenance fund is far better than getting a Section 20 demand for a fair few hundred pound.

Doozergirl

Such a problem with new build flats. And the worst thing is that if they are 2 years old, they don't actually need any proper maintenance! The developers happily give management to professional management companies who aim to make as much money as possible from you.

How many in your block? Too many to take control yourselves?

They can't guarantee what service charges will be in future and I suspect you will have nothing in writing to support what they said. It's far too common for service charges to rocket after the first year or so.

You need to request copies of the accounts. If they were decent, they'd have done it with the increased bill to show where the money is going.