Block of flats - Large bill for external redecoration

ctm_2

I live in a block of around 20 flats, and we were informed by the managing agent in January that the outside was to be painted this year, and quites were obtained etc.

None of the residents who have lived here for ages hve ever had to pay for this, it has been covered by the service charge that we pay.

However, we have now all been landed with a bill for over £700 each. The managing agent is charging a 'Works Management Fee' of over £1600, when the total cost of redecoration is just over £16k.

We have no problem with the quote, but with the amount the agent is charging, and how much other things cost. It doesn't take £3k to cut the grass and sort out the few plants each year.

Is there anything we can do, and are we in a position where we can get rid of the managing agent and do it all ourselves?

[Deleted User]

We have a service charge that covers, security, gardening, window cleaning, insurance etc. We also have a sinking fund that will cover ongoing maintenance. Check you don`t have such a fund

This might be of some help

http://www.rdaestates.com/Leasehold.htm

Doozergirl

You can take the Right to Manage, which basically means that if enough of you agree, you can sack the managing agent.

We did it at a cost of £100 per flat.

http://www.lease-advice.org/rtmframe.htm

The Leasehold Advisory Service are government funded so you don't need to worry about duff advice or them not having your best interests at heart. Read through the info and maybe give them a call for further clarification.

You will need to have something set up to replace your current agent - you can either employ a new one who are answerable to you, or you can manage yourselves (maybe a bit complicated for 20 flats!). Even if you employ a managing agent you can collectively decide what needs doing and obtain your quotes for work.

You can find other quotes to compete with your current agent, if you want; they should have a consultation period where you can reply to them.

ctm_2

Thanks for your replies. From reading on here, and on the websites you link to, it looks like we already manage ourselves (there is a company, formed of all of the residents and 2 of the residents are the directors) and this company has appointed the managing agent.

So should it be quite simple to 'sack' our managing agent without having to go through all of the RTM stuff?

tomstickland

We had a similar situation last year in our block.
The managing agent can charge you for works like these, but they have to carry out the correct consultation process, including providing quotes to the leaseholders etc.
The regular service charge covers the regular expenses and there's usually a sinking fund to cover works like exterior redecoration.

frivolous_fay

We got hit with an £800 bill last year for roof repairs and decoration of communal areas.

They had to serve us a section 20ZA notice (Landlord and tenant act 1985)
We didn't know what the hell it all meant, but basically they told us what needed doing, and offered us the chance to recommend a contractor, or submit any comments in writing.

A month later the consultation period ended. A few months after that we were shown the various quotes and told how much we'd have to pay. The management company charged 15% to supervise the works. (Did they get quotes for that? Did they hell) so I'd say you're lucky with the 10%.

We do have a reserve fund which is paid into regularly. The trouble is, and may be the case with you, it was utterly inadequate to deal with a bill this size. They deducted each flat's contributions from each flat's share of the bill, which left us with about £800 per flat.

We have ongoing issues with the management company, the way the billing was handled, the way our comments were ignored and not responded to (we had no idea what a section 20ZA notice was). On the face of it, it was done more or less to the book. If your company didn't follow the correct procedure you may find you have grounds to kick up a fuss. In our case the bottom line was that it's patently obvious the work desperately needs doing.

Our hands were pretty much tied, as we can't self manage the block as it's 50% commercial. We attempted to build relations with the company - had a meeting with the agent, made suggestions like 'wouldn't it be better to divert some of the excess thousands from the service charge account into the reserve fund account?' and 'perhaps a reserve fund payment of £25 per quarter is inadequate', but now that agent has changed jobs and we are dealing with someone else.

So far, this person actually responds to emails, so I'm cautiously optimistic. Even if the accounts department are currently chasing me for a fee which is double what I actually owe. The whole experience leaves me delighted that I will be moving house soon, and has totally turned me off the possibility of renting the flat out.

Sorry, got a bit off track. Hope some of the above is helpful.

Richard_Webster

I don't know the details of OP's situation, but if the block is owned by a residents' management company it is the company's responsibility to make decisions about service charge levels etc advised by the managing agents.

It may be that the managing agent didn't notice that the work would need to be done, which would be grounds for replacing him with someone else.

However, the managing agents may have been warning about the need for major work in past years and may well have suggested the service charge was increased to collect part of the likely cost each year so that when the work was done it would not be a nasty shock. If the directors of the company (who will owners of flats in the block) have wanted to keep the regular service charge payments to the minimum then it could be their fault for not listening to advice!

OP needs to talk to the directors of the company and go to the meetings to finds out what has happened and why.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

frivolous_fay

We were led to believe that our 'service charge' was for day-to-day maintenance and in no way covered major work. That would be the purpose of out 'reserve' fund.

Frustrating for us, as day-to-day maintenance tends not to get done, and there's plenty of cash in the service charge fund!

ctm_2

I am at present the only director. The other just resigned. I've only been director for a few months.

For some reason the reserve fund, which according to budgets should have had £3k paid into it each year, has shrunk to only £1500.

It is looking likely that we (two new directors to be appointed soon) will be sacking the managing agent and managing it ourselves. Currently we are paying the cleaner and gardner over £32 an hour for the work they do. Who knows what else we are being overcharged for, or how much the managing agent (who seems completely unable to produce invoices) is charging for things!