Property Management charge...can you legally dispute it?

baby_frogmella

Hi
I live in a detached property which was built 3 years ago and even though its freehold, there's an annual charge by a company called The Property Management Company based in Aberdeenshire. Its not a huge charge (approx £150 per year) and this involves the PMC arranging for things like grass cutting in communal areas and general grounds maintenance. However i notice that on the invoice they send me annually that the cost of the actual work carried out is only around 50% of total charges..the other 50% is just shown as 'property management charge' which is just PMC's charge. But is 50% of the total costs a fair price? I would have thought 10-20% would be more fair? Can i dispute this? Obviously i'm fully aware that the company incurs costs and overheads and has to make a profit as well but at the end of the day can they just charge people whatever they want?

theartfullodger

This is in Scotland?? What do the deeds say about such charges- your answer is probably there

baby_frogmella

Yes i'm in scotland and the charge is known as factoring. Got in touch with my solicitor who dealt with the house purchase and there is NOTHING in the deeds which mentions the factoring charge, obviously when i bought the house through the developers (Barratt) they did mention that there would be an annual factoring charge. I'm going to get in touch with other residents and look into the possibility of switching companies as they can be changed providing all residents agree to it. However i suspect due to amount involved (~£150 per year) some people won't be bothered taking it any further.

So the question is, if i refuse to pay PMC's management charge (which they say is fixed & won't negotiate on) and ignore all warning letters, will i end up in court, get my credit rating destroyed and possibly end up in jail....in the worst case scenario? Even though PMC is a private company, is refusing to pay them the same as not paying your council tax?

olly300

If you don't pay your council tax you end up in prison as it's a criminal offence.

The other offence is likely to be civil so expect them to attempt to destroy your credit rating.

To be honest in situations like this you are best of ganging up with neighbours to try and get the company to change how they do things. Oh and a bit of bad publicity about the company online helps though make sure you research them properly.

Wywth

baby_frogmella wrote: »

Hi
I live in a detached property which was built 3 years ago and even though its freehold, there's an annual charge by a company called The Property Management Company based in Aberdeenshire. Its not a huge charge (approx £150 per year) and this involves the PMC arranging for things like grass cutting in communal areas and general grounds maintenance. However i notice that on the invoice they send me annually that the cost of the actual work carried out is only around 50% of total charges..the other 50% is just shown as 'property management charge' which is just PMC's charge. But is 50% of the total costs a fair price? I would have thought 10-20% would be more fair? Can i dispute this? Obviously i'm fully aware that the company incurs costs and overheads and has to make a profit as well but at the end of the day can they just charge people whatever they want?

Everything is negotiable, but a £75 annual charge per property for a management company is extremely competitive.

As you say it covers their costs & overheads, and presumably covers the cost of billing each property, collecting/receiving the monies owed, keeping accounts, instructing necessary contractors and answering queries/disputes such as why they charge an annual £75 fee per property.

baby_frogmella

Wywth wrote: »

Everything is negotiable, but a £75 annual charge per property for a management company is extremely competitive.

Yes i know £75 per property per year is not a huge amount, but in % terms it seems to be very high. If the work they were carrying out was costing £500 per property then £75 is only 15% which is hardly something to be concerned about. Imagine renting your house out through an agency where it charged £900 per month in 'fees' yet your rental income was £1k...you would rightly tell them to do one.

I did call PMC yesterday but they told me their fees are fixed irrespective of the work done so as things stand we have no choice. However i think if ALL the residents stopped paying this management fee (ie only paid for work carried out) until PMC lowered their fees to % based rather than fixed then we may get a result. PMC also said we can get rid of them and appoint a different company if we wish but apparently its a long winded process and obviously ALL residents have to agree to this.

olly300 wrote: »

If you don't pay your council tax you end up in prison as it's a criminal offence.

The other offence is likely to be civil so expect them to attempt to destroy your credit rating.
.

I'm aware that not paying your council tax is a serious offence for which you can be jailed for. But other than trying to destroy your credit rating can these private management companies also take you to court for non-payment of their fees? When i bought the house back in 2008, i remember Barratt just verbally telling me that there would be an annual factoring charge, can't remember seeing it in any of the missives though i will ask my solicitor to check again.

propertyman

Yes they can take you to court and judgement can affect your credit rating.

I don't practice in Scotland but am aware through family that there is legislation The Tenements Act 2003 or 2004 that overrides the terms in deeds to make provision for upkeep of common areas. Whether that applies to houses....?

I would suggest that you

1: write to them and explain that

having checked my deeds I can see no obligation to pay anyone for the upkeep.

Would you therefore please explain the legal basis that I am required to make payment, how it is calculated and your authority to collect it.

:money:2; Contact Shelter Scotland 0808 800 4444


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