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Help own flat but have to pay management fees

edited 30 November -1 at 1:00AM in Mortgages & Endowments
5 replies 3.9K views
actionmanukactionmanuk Forumite
7 posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Hi hope some people may be able to help or direct me to a site dealing with this type of thing.

In 1999 i bought a flat. The flat is leasehold with the freehold being owned by a person who uses a managment company. The management company operate from London and charge annual fees. The fees currently are running at £900 per year for me. This is like having a 2nd mortgage and is really taking its toll.

There are two other flats in the building and they pay the same rate.

The fees are broken down into
insurance
accountancy fees
management fees etc

I know that i am being seriously over charged and could quite easily get the place insured at a cheaper rate. The costs that the management company charge are also unnesserary. They do nothing for the money and say that if any work needs doing to the property i have to pay for this as well.

Can anybody give me any insight into what i may be able to do. I understand i could perhaps bu the lease with the other flatholders but not sure it would be affordable. Help.
something missing

Replies

  • I was paying around £600/year in a block of four flats. This covered insurance, management fees (pah!), accountancy fees and maintenance. Roughly 1/4 of the total was for maintenance. You are entitled to see detailed invoices/receipts for any repair/maintenance work carried out. You should also get the audited accounts sent to you annually.

    If you think you are being overcharged there are steps you can take.
    http://england.shelter.org.uk/advice/advice-187.cfm has a few details.

    http://england.shelter.org.uk/advice/advice-197.cfm has more info on actually challenging the service charges.

    HTH
  • thanks for the info, do you still pay the £600 per year? Im also worried im not going to be able to sell it on eventually as it will put people off.

    the breakdown is this:-

    there are 3 flats in the building

    insurance £1,364-00
    Repairs £200-00 (no repairs have ever been made)
    Electricity £75-00
    Accountancy fees £140-00
    Management Fees inc vat £350-00
    Insurance Valuation £350-00 (although apparently a one off fee)

    total = 2,479.00 div 3 = 826.33

    How can they justify charging the managment fees, that essentially is just profit for nothing isnt it?
    something missing
  • I still pay the £600/year and am about to sell that flat and buy another, again with about £600/year charges.

    The 'management fees' will cover the costs of the managing agents that the freeholder employs to arrange the insurance cover, answer the phone when you call, prepare accounts, organise maintenance etc.

    With respect to the repair charges, I suggest you phone the management agency and ask them what the charges were for, and of possible, ask for a copy of the invoice that the builder/plumber issued for the repair. It is your right to examine this, but they might ask you to come to the office to examine it, rather than give you a photocopy. Perhaps you can ask the two other leaseholders if they know what work has been carried out and whether they think the charges are fair.

    Technically, the freeholder is not permitted to make any profit and can only collect ground rent. He employs the management agency and they charge you for their services. Obviously the management agency want to make a profit, they are after all a business.
  • Hi thanks again for the reply. Obviously the management company are making a profit. So is there nothing i can do about this? It seems crazy that we need an external company to do all this. I have spoken to the other two people who own the flats and they also feel these charges are to much. As we are all unhappy about them maybe we could do something? Most other flats in my area are reverse freehold.
    something missing
  • You'll need to check out the advice on sites such as shelter or other landlord/tenant type websites. I've got zero experience of challenging service charges.

    Apparently a good place to go to is http://www.lease-advice.org/

    If you and the other leaseholders all feel the same way then you are definitely in quite a strong position to challenge the service charges

    Good luck!
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