greedy management company

kiwi07

I am here hoping for some advice. I am not particularly happy with my management company. I bought my flat in August 2009 and at that time the service charge was £75 a month. Since then the management company is significantly increasing the service charge every year : £75 amonth - 1st year, went up to £83 a month for the second year and and now they demand £92 a month so it's 25% increase for the last 3 years!:eek: It's not just the amount of money they want from us as every year they also have a balance deficit and charge an additional nearly £100 for every financial year. There are 4 blocks in the whole building, communal gardens, no lift. Windows cleaning once a month. They have just reduced cleaning of the premises to twice a month instead of once a week. They have just recruited a new Estate coordinator but used to be the Senior manager and the Manager. Is that where our money goes? The flats are mainly being rent out to tenants so there are only few owners who reside here. I am just wondering how much do other people pay in service charge as I think this particular management company is greedy. We have a Resident Director but it seems that nobody is companing about it.

propertyman

You will need to get a copy of the annual budget on which the monthly charge is based, and discuss with the Director of your Residents Management Company ways to ensure that the charges are "fair and reasonable".

That may mean discussing with the Managing Agent when they last got quotes for insurance accountancy and any other costs in that budget, and as an RMC, whether you should be looking at the Agents
fees and if they are competitive.

kiwi07

business_man wrote: »

The deficit in the balance sheet of the company would/should have been disclosed to you during the conveyancing.

I am not sure if a couple of pounds a month is worth the hassle of tribunal IFF you can prove they are charging in excess, chances are, they aren't.

Not sure about taking them to tribunal. I'd rather get rid off them and get another company. I still think they are very expensive. How much do other people pay in service charge for their flats??

propertyman

That's just silly. You cannot compare your charges to other peoples unless the services service level and building are similar.

An agent arranges services on your RMC's behalf, it is not a contractor who charges one fee and employs sub contractors.

When you have the budget and understand the service level, such as agreeing bi weekly cleaning is better than weekly, you ensure it is competitive by making sure the Agent is getting quotes for those services on a regular basis.

Now, if they fail in doing that, then they need the chop.

Good luck

19lottie82

I pay £35 pcm but from what I have read on here, service charges (or factors fees, as I know them as), seem to be cheaper in Scotland?

BitterAndTwisted

If your monthly service-charges resulted in an annual deficit and therefore a balancing charge at the end of the year, an increase in the following year's service-charges on account seems entirely sensible and justified.

I think your dissatisfaction is based on a misunderstanding of how service-charges on account are calculated.

propertyman

19lottie82 wrote: »

I pay £35 pcm but from what I have read on here, service charges (or factors fees, as I know them as), seem to be cheaper in Scotland?

But the factors fees ( which is a different role under the Tenements Act) depend on each building and service level.

MacDonalds is cheaper than Jamie's Italian, it's all food but they are a very different product and price

fivetide

The problem is these companies are generally unregulated and once they have their foot in the door are happy to cream it in for little work (all based on my experience)

A lot of flats will be let so while the landlord can pin the bill on the tennents (even though they should be paying for repairs) they don't argue and the only way to sack the agent is to get the majority of owners to form a residents association. since landlords won't do it, nothing happens.

5t

kiwi07

BitterAndTwisted wrote: »

If your monthly service-charges resulted in an annual deficit and therefore a balancing charge at the end of the year, an increase in the following year's service-charges on account seems entirely sensible and justified.

I think your dissatisfaction is based on a misunderstanding of how service-charges on account are calculated.

Sorry but you probably misunderstood. They have not just increased the service charge up to £92 per month they also demand £100 extra once every year as the deficit. This month I have to pay £92 plus £100, £192 in total for July 2012. That is a lot! 24 flats in the building...

kiwi07

fivetide wrote: »

The problem is these companies are generally unregulated and once they have their foot in the door are happy to cream it in for little work (all based on my experience)

A lot of flats will be let so while the landlord can pin the bill on the tennents (even though they should be paying for repairs) they don't argue and the only way to sack the agent is to get the majority of owners to form a residents association. since landlords won't do it, nothing happens.

5t

That is the problem. We only have 4-5 owners who reside here. From 24 flats. We have one Resident director who seems quite happy with all the arrangements..

25% increase in service charge for 3 years is a lot.

BitterAndTwisted

Precisely what services are the agents providing to the leaseholders and have you had sight of the audited accounts? You should have been provided with them when they issued the balancing service-charge demand for whatever the y/e was