Ground Rent and Service Charge

adriandilly

Good Evening all,
We returned home today to two letters, one for Service Charge and one for Buildings Insurance and Ground Rent

Please could we ask advice as to what you regard as fair as the total for all these is £1200; which is a lot to pay
in one go!

We live in a small 2 bedroom 2nd floor flat in a block of 9 flats. We are part of 11 properties in our courtyard
and 40 properties in our development

Service charge breakdown

For 9 properties....
Communal Elec 450 (Hoover used fortnightly + outside light)
Communal Water 50 (Never seen a tap)
Communal Cleaning 900 (Cleaner round fortnightly)
Maintenance of landscaped areas 600 (For two flower beds)
Door Entry System Repairs 150
Communal TV Aerial Repairs 150
General Repairs 900
Elec Maintenance 300
Management Fees 1002
Health and Safety Costs 50
+ Contrib to non annual expenditure 1250
TOTAL 5802
divided by 9 = 644.67
or 53.72 per month per property

For 40 properties....
Directors & Officers Insurance 350
Bank Charges 50
Management Fees 3461
Audit Fees 560
Filing Fees 30
Company Secretarial Fees 530
Health & Safety Costs 120
+ Contrib to non annual expenditure 500
TOTAL 5601
divided by 40 =140.03
or 11.67 per month per property

And for 11 properties....
Electricity 150 (No electricity common to the whole courtyard)
Maintenance of Landscaped Areas 500 (An extra flower bed!!!)
General Repairs 550
Management Fees 272
+ Contrib to non annual expenditure 500
TOTAL 1972
divided by 11 =179.27
or 14.94 per month per property

Therefore Half Yearly Service Charge of £481.99 for our property!!!!!
===========================================================================
The second letter then wants

An insurance premium of £1400.32 (to 1 Aug 2011)
divided by 9 =155.59
and a premium for year to 28 Sept 2010 =178.66
TOTAL 334.25
===============================================================
then 3 half year ground rents of 125
TOTAL 375
===========================================================================
GRAND TOTAL £1191.24 !!!


Thanks in advance for your time
Adrian

mirrorimage0

i havent got the break down in front of me but i know in the 2 bed flat that i own which is in a block of 6 i pay just over £110 per month for everything. the flat is in the essex area

adriandilly

So we are paying £116 a month for SC, GR and BI, so its a little bit more. We live in norfolk. Service charge seems a lot for how little the property management do though! Plus £125 for 6 months ground rent, i think is extortionate. I thought that most people padi no more than £100 for the year!!

z1985m

service and ground maintence companys are complete con artists, they really are. the charges they charge just don't add up. there should be more regulations on how they operate because at the moment they can just do as they please.

ILW

Surely you would have known what these charges were before you bought the place.

G_M

How much did you pay last year?
Or if you've recently moved there, how much did your solicitor tell you it would be?

Is there a residents association?
Who is the management company?
Have you considered changing them/self-managing?
You can certainly demand a further breakdown of what they've spent, and challange items not provided (eg water if there's no communal tap) but may need to do so at the annual meeting.

For more info on leaseholder rights see here.

adriandilly

We moved in 30 Apr 2009

I dont have last year's actual charges to hand but I have found the estimated service charges outline as found with our lease/deed documents... and I'm here comparing them to latest charges asked for

Services charges for each of 9 flats are..

Estimated year 1 = £586
Estimated year 2 = £671
EDIT: It should be noted these two figures included estimated buildings insurance at 1301/9 = £144.55
Actually charged for 2011 in advance = £644

Service charges for each of 11 properties in courtyard are..

Estimated year 1 = £151
Estimated year 2 = £169
Actually charged for 2011 in advance = £179

Company charges for each of 40 properties on development are..

Estimated year 1 = £22
Estimated year 2 = £25
Actually charged for 2011 in advance = £140


Therefore, Total charges..
Estimated year 1 = £759
Estimated year 2 = £865
Actually charged for 2011 in advance = £963


As you can see we have been charged more or less as expected for service charges; but the fact that we've already paid last year's charges, would it be straightforward enough to argue against paying for services we dont need, now???

Also, does anyone agree with the insurance premium of EDIT: £155 / year and the ground rent of £250 / year

Thanks again

Adrian

adriandilly

G_M wrote: »

Is there a residents association?
Who is the management company?
Have you considered changing them/self-managing?
You can certainly demand a further breakdown of what they've spent, and challange items not provided (eg water if there's no communal tap) but may need to do so at the annual meeting.

We have informally chatted to each other about having a sit down together as residents, but there's never been a time when we are all available at once.

The management company are Solitaire (now OM property manangement) and the Buildings Insurance/Ground Rent collectors on behalf of Bellway Homes are FMPC

I didn't realise changing company/self managing was a realistic option and if the savings were worth while

We have previously asked Solitaire for a breakdown of charges, but they only send Estimated Service Charge lists again, not what they've actually spent!

Adrian

daveyjp

"We have previously asked Solitaire for a breakdown of charges, but they only send Estimated Service Charge lists again, not what they've actually spent!"

The RICS produce a residential service charge management code which is worth a read - the management company probably don't have a copy!

I note you are paying auditing fees, this suggest there are some accounts being audited so there should be no problem in them providing a copy to you, ask them for a copy and see what response you get!

Also ask them how much commission they get from the insurance company - more backhanders than Wimbledon fortnight in this area of the business. As they are buying insurance on your behalf there's a good argument any commission should be paid into the service charge account.

G_M

adriandilly wrote: »

We have informally chatted to each other about having a sit down together as residents, but there's never been a time when we are all available at once.Well, if you want anything done you'll all need to make time!

I didn't realise changing company/self managing was a realistic option see my link above and if the savings were worth while If you think you're being charged too much, either accept it and pay, or try to save some money

We have previously asked Solitaire for a breakdown of charges, but they only send Estimated Service Charge lists again, not what they've actually spent!

Adrian

They can of course only provide estimates for the year to come (for which you are now being charged in advance), But they can and should provide audited accounts for the past year.

clutton_2

what does your lease say about some of these charges ?