Property Management Company fees

missile

Hi,

We own a flat in a development with 109 properties.

Our property management company have just issued their estimated budget for 2011

The estimated management fee has increased from £11.66 to £17.30. I calculate this to be £22,628.40 for 2011 which is 55% increase on the fee £14,636.52 in 2010. Please advise.

I am shocked by the increase and do not see any justification for such a dramatic increase. I asked for justification

Our Management Fee – has been increased to cover bank, finance and admin charges as there is more work and costs involved where there are arrears of factoring service charges. We offer direct debits to our clients as a way to assist them in budgeting for their factoring account invoice. To award those who currently pay either by monthly direct debit or annually in advance, we are offering a lower management fee; this is also being offered to those who now choose to either pay by direct debit or annually in advance.
If you have any further queries please do not hesitate to contact us.

I do not feel inclined to roll over and accept this. I would appreciate any advice you may have? :A

glottalstop

The lease or management agreement may limit the fees or increases a manager can apply, have a read. Anything above RPI is curious.

You are fully entitled to ask for a detailed breakdown of the fees, to ensure they are not just hiking their own take. If you are not satisfied you may apply to the LVT for a judgement - they can consider whether demands based on estimated service charges are reasonable - but you you will have to present evidence why the demands are unreasonable.

One explanation may be fair. If lots of people are in arrears, the cash in your bank account may be drying up. While the manager (on behalf of the freeholder) is obliged to provide the services in the lease, they do not have to use their own money. But they should up their game to recover unpaid charges before passing the pain on to you.

Is there a history of problems, non-payment issues, or a depleted reserve ? What do last year's accounts say ?

cheatedresident

Where abouts in the country are you, our development is considering moving to a new agent who charges £100 + VAT per property, in your case that would be a total management charge of £13,080

Opinion

cheatedresident wrote: »

Where abouts in the country are you, our development is considering moving to a new agent who charges £100 + VAT per property, in your case that would be a total management charge of £13,080

Cheaper doesn't always mean better.

dimbo61

£22628.40 between 109 flats works out at £207 each
Do you have an on site warden, window cleaner, lift, gardner and grounds to maintain ?
How good has the management company been at fixing problems
Will the properties need new roofs/windows/carpets ETC soon ?
Its £4 a week for your management charges !!

missile

dimbo61 wrote: »

£22628.40 between 109 flats works out at £207 each
Do you have an on site warden, window cleaner, lift, gardner and grounds to maintain ?
How good has the management company been at fixing problems
Will the properties need new roofs/windows/carpets ETC soon ?
Its £4 a week for your management charges !!

The management fee does not include any services.

dimbo61

OMG what are you paying for then ?

BitterAndTwisted

For them to ADMINISTER the services, of course.

missile

Thanks for all your comments.

This contractor has managed our development for 6 years with moderate increases in their fee year on year. Now they have hit us with a huge increase.

Does anyone have any experience of replacing a management contractor?

cheatedresident

We are currently looking at replacing our current managing agent if thats what you mean.

The criteria we are looking at is:

Experience
Cost
Locality
Industry and regulation knowledge

So far we have narrowed it down to two.

One bit of advice most agents require a notice period ranging from a month to 3 months. So if you are considering changing put your current managing agents on notice NOW, you may decide to remain with them then it is just a case of ending the notice period.

It is often a tactic by agents at this time of year, who know they are on their way out to delay sending out demands after all an extra months management fee can add up to several thousands depending on the development.

missile

cheatedresident wrote: »

We are currently looking at replacing our current managing agent if thats what you mean.

The criteria we are looking at is:

Experience
Cost
Locality
Industry and regulation knowledge

So far we have narrowed it down to two.

One bit of advice most agents require a notice period ranging from a month to 3 months. So if you are considering changing put your current managing agents on notice NOW, you may decide to remain with them then it is just a case of ending the notice period.

It is often a tactic by agents at this time of year, who know they are on their way out to delay sending out demands after all an extra months management fee can add up to several thousands depending on the development.

I have no problem choosing a.n.other agent, my main concern is getting support from appathetic residents. I understand we need approval from 50% before we can serve notice. How did you adress that issue?