Service charge dispute (OM Property Management)

rodd-y-ler

I know, I know, OM are horrid, but until our new build development is completed, we cannot start the RTM process.

My gripe is this.

In May 2010, we completed on a new build flat. As part of the completion process, we paid for 6 months worth of service charges (£600).

OM only started managing our blocks as of January 17th 2011. We received a welcome pack a few weeks ago, along with a receipt of payment for the 6 months May-Oct 2011, and another bill for the period Nov-Apr.

I have written to company arguing the fact that we paid for 6 months in advance (the lease stipulates that payments would need to be in advance, which is fine), however due to them only starting to manage us now, the 6 months should start from January.

We paid for 6 months management which was never received, why should we have to pay for another 6 months (only 3 of which will actually have them actively managing us).

I have no issue with the amounts, or paying in advance, but they are making us pay 100% cost in advance for what will only be 25% service.

The development is in the process of being built, so new blocks are being completed every few months. My issue is that those of us that moved in last year are ending up paying more fees than those completing in January/December, but we are all receiving an equal amount of service for the same period of time.

Other tenants and I have written in again stating the above, but aren't likely to hear back from them until next week (conveniently close to the deadline for the reminder payment which will incur £50 admin fees if missed).

Does anyone have any similar experience or advice?

Thanks!

BitterAndTwisted

Argue and discuss all you like but please do not be tempted withhold the monies while you do it. Property management companies can be VERY aggressive when collecting service-charges on account and could take steps to collect it legally. It has been known for them to get a charge put on the property and this will not be funny once you come to sell.

tbs624

There have been quite a few posts on here about OM

You may want to have a look at

https://forums.moneysavingexpert.com/discussion/622233

http://www.thetruthaboutsolitaire.co.uk/2010/01/25/goodbye-peverel-om-hello-om-property-management/

http://www.allagents.co.uk/om-property-management/

daveyjp

OM will have taken over all the service charge money paid by all tenants to date to the old company, this includes the £600 you paid when you moved in. They will also be responsble for all the debts due.

The 17th January is purely a change in the company managing the property and not the start of a new service charge accounting period so you still owe November to April.

rodd-y-ler

It is a new build development, we were in the first completed block, NO ONE has been managing us until now. This is what has added to mine and other resident's frustration. 9 months living here and no cleaning of communal areas, windows, landscaping, etc.

BitterAndTwisted

Set up a Tenants & Residents Association yet? I would suggest you consider doing this so that you make make representations to the management company en masse.

I really wouldn't hold out much hope of getting refunds and also suggest that you study your long lease with a microscope to ensure that you're not obligated to pay the s/c regardless of whether any actual services are being provided on your behalf or not.

glottalstop

Rodd - I understand your frustration, now the good news.

Although charges have been raised from you based on advanced estimates and perhaps before full service was being provided, OM are obliged to account for what they have actually spent in their report within 6 months of year end. So you will find out whether anyone actually spent any money in that period or not. If your charge is in two parts, you may find you have been paying for (£600 ish) block services and a further charge (£250 ish) will kick in for estate services when development is complete.

The accounts will make it very clear whether you have been charged for services which you can demonstrate have not been provided etc (? evidence like pictures etc ?) Or unspent money will be credited according to the lease. So, keep paying, keep a record of what has or has not been done, and wait for the accounts.

If your block is complete (and sold ?) there is nothing stopping you from using RTM, you do not have to wait for other blocks to complete. The completion of the development (sale of the last unit) usually triggers the start of any break clause period in the lease, but does not delay RTM.

But what is the rush, as above you can wait for the accounts ?

You should take comfort that any unreasonable expenditure can be recovered if you have a proper claim in LVT.

In the meantime keep a documented and photographed record of every issue or aspect of your development's management that you are not happy with, and a full copy of all correspondence.

Forming a Residents Association will be a big help, especially if OM recognise it formally, since it obliges them to pay more attention to you. But as a leaseholder you will still have rights to examine accounts etc in detail, on request, once they have been reported.

daveyjp

rodd-y-ler wrote: »

It is a new build development, we were in the first completed block, NO ONE has been managing us until now. This is what has added to mine and other resident's frustration. 9 months living here and no cleaning of communal areas, windows, landscaping, etc.

Possibly no management, but some of your £600 will have been spent. Building insurance being one obvious charge.

As glottalstop says you have to wait until you get the accounts, but your £600 isn't lost just because not much management has taken place - it will still be in the service charge account.

liubeliu

rodd-y-ler wrote: »

It is a new build development, we were in the first completed block, NO ONE has been managing us until now. This is what has added to mine and other resident's frustration. 9 months living here and no cleaning of communal areas, windows, landscaping, etc.

If no one was managing, then who was paying for the buildings insurance?

rodd-y-ler

liubeliu wrote: »

If no one was managing, then who was paying for the buildings insurance?

I can only assume the developer, who have also footed the bill for stuff like fixing a entry broken door. The service charge was paid directly to OM though, so Barratts would have absorbed any of those costs prior to Jan 17th.

Thanks for the info glottalstop. A webforum has been set up for us residents, and we have all been discussing this, and sending letters of complaint en masse with regards to it, but we haven't formed an official RA as yet.

Seeing as RTM is doable on a by block basis, we will certainly be looking to move away from OM asap, their track record speaks volumes and we all wish to nip any potential hassle in the bud.

Thanks!

glottalstop

OM will almost certainly have stepped in to organise the block insurance, since they get a 20% or more kickback on the premiums.

Rodd -- the webforum is an excellent idea, and will capture a good record of who has been unhappy about what. It also becomes a community forum, fancy people living in the same block actually communicating with each other instead of whisking between front door and work.

My block achieved RTM in April 2010, after a 9 month campaign. We learned a few lessons along the way, which I would be happy to share, if you can get in touch directly. For example, it is best to get as many as possible signed up, not just the 50% minimum. For another example, multiple blocks can execute RTM at the same time using the same advisor, noting that each block must still satisfy the standalone rules. For an even further example, there is much benefit to be had by timing the RTM handover to coincide with the year end as specified in the lease. For a final example, if you can get multiple blocks interested and are able to identify a new manager who you can trust/work with, they might advise and administer the RTM process for you in exchange for the job - this will ease your burden and save you upfront.

On the downside, you need to settle your expectations of what your charges should be. OM will still be charging £250-300 pa for the estate, and you will still have ground rent to pay. £1,200 pa for your block charges is not bad, but you need to watch out for how they might grow under OM. My RTM helped us get block charges back to £1,200 from £1,600 or so. We could probably have squeezed things harder, but services would suffer and you still need to accumulate a healthy reserve.

Have Barratts offered to sell you the freehold ?

I cannot believe I am writing this, but I would advise you not to rush too fast into RTM until you have let things settle into a stable situation, you have seen how OM perform, and experienced costs starting to rise so you know what scope there is for making savings.

OM are in such a hole that they might start being nice to people, they can't afford to keep losing so much business.

And, picking a new manager who delivers what you want at a fair price, and who you know you can trust, is a black art.