Maintenance charges

tim123456789

sad_gills_fan wrote: »

Interesting to read the different accounts, ours is different again.
Bought a FH new buld 7 months ago, paid a % of the maintenance charge on completion and have just received the new bill for 2013.
The main charge (£78 per year per house) is for upkeep of a nature reserve area that the developers are supposed to be building. It won't be completed until at least October-December of this year but we are already being billed for it.

It also covers the annual audit for the management company .. I'm confused about this as why should we pay for their audit?

because the audit is for your benefit. they wouldn't be doing it if there wasn't a law insisting that they did

tim

jamesml

This is the case for us, and I was led to believe a fairly standard approach: A company is set up for each estate - so there will be a company called 'James's Estate Management Company Limited' which will record all the revenue from the residents in James' estate. This company will appoint an estate management company to actually do the work, which they will pay a fee to. This company will then provide the staff etc to get the actual work done. (In our case its Pentlands). You are paying for the audit of James' Estate Management Company Limited, not or Pentlands. James' estate management company limited only exists to receive the money from the houses/flats on your estate and is audited to provide comfort to the residents that don't have any active participation that the transactions/funds are reasonable, and that the directors are acting in a reasonable manner.

You should find that the directors of this management company are residents in your estate (our developer has put in their own staff until the development is finalised).

One point to note is that any funds received which aren't spent will be held within that company and effectively rolled over to future years.

Perhaps if you have some concern over this you should speak to the developer and find out if you can join the property group who run the estate's management company. That way you can have some involvement in the management of the company, and if needed can be involved in negotiating with Pentlands (or whoever it is in your case) or find an alternative to Pentlands if that is what is needed.

For us, the developer continues to meet the costs of maintaining the site until it is complete, at which point it is handed over to the estate management company and Pentlands.

sad_gills_fan

tim123456789 wrote: »

because the audit is for your benefit. they wouldn't be doing it if there wasn't a law insisting that they did

tim

I get that it's the law, the bit I don't get is that surely every company does it, but they don't charge their customers? Or does everyone else just hide the charges?!

jamesml wrote: »

This is the case for us, and I was led to believe a fairly standard approach: A company is set up for each estate - so there will be a company called 'James's Estate Management Company Limited' which will record all the revenue from the residents in James' estate. This company will appoint an estate management company to actually do the work, which they will pay a fee to. This company will then provide the staff etc to get the actual work done. (In our case its Pentlands). You are paying for the audit of James' Estate Management Company Limited, not or Pentlands. James' estate management company limited only exists to receive the money from the houses/flats on your estate and is audited to provide comfort to the residents that don't have any active participation that the transactions/funds are reasonable, and that the directors are acting in a reasonable manner.

You should find that the directors of this management company are residents in your estate (our developer has put in their own staff until the development is finalised).

One point to note is that any funds received which aren't spent will be held within that company and effectively rolled over to future years.

Perhaps if you have some concern over this you should speak to the developer and find out if you can join the property group who run the estate's management company. That way you can have some involvement in the management of the company, and if needed can be involved in negotiating with Pentlands (or whoever it is in your case) or find an alternative to Pentlands if that is what is needed.

For us, the developer continues to meet the costs of maintaining the site until it is complete, at which point it is handed over to the estate management company and Pentlands.

Our developer (Wards) don't maintain anything that the estate management company (GEM)are quoting for as far I know. GEM have been taking money off people since we moved in (for us, that was Nov 12), but we are paying for things that aren't actually there ... the nature reserve for one.

None of the staff live here, in fact, they are registered in Herts and we're in Kent!

I guess we just don't want to pay for something that is not there .. it's the bulk of the payment (£121 out of £178).
I'd happily sit on a voluntary board for the estate management so I'll look into that .. thank you.

Any other ideas from people are more than welcome.

tim123456789

sad_gills_fan wrote: »

I get that it's the law, the bit I don't get is that surely every company does it, but they don't charge their customers? Or does everyone else just hide the charges?!

It's not an audit of the whole company's business.

it's an audit of only the work that they do for your estate.

As most estates are small (less than 100 properties, possibly less than 10) but audit fees are (more or less) the same fixed fee. So it's not realistic to amortize the fee into their standard charge as the individual liability for the audit charge depends upon the size of the estate (and is a material amount).

Tesco (or whoever) have so many customers that their audit fee per customer disappears into the noise.

embob74

I lived in a FH house on a new-ish estate and we had to pay a service charge of about £7 per week. This covered the cost of lighting and gardening services and admin fees and management fees.
In the 8 years I was there the cost didn't rise by more than a few pennies and the estate always looked great.
The road was adopted by the local council or that might have seen a rise in subsequent years. Once all properties had been sold the residents set up a management company and dealt with everything - this was all detailed in the terms when buying the property.
Ask the develop what it involves ..... but perhaps get answers in writing!!

jamesml

sad_gills_fan wrote: »

I get that it's the law, the bit I don't get is that surely every company does it, but they don't charge their customers? Or does everyone else just hide the charges?!

No, as far as I am aware, this is not the audit of GEM you are paying for, its the audit of the company set up to manage your estate. As I said, in our case there are 2 companies in existence - the estate company (James' estate management company limited) and Pentlands. This fee is for the audit of James' estate management company limited. This is a separate limited company to Pentlands.

sad_gills_fan wrote: »

Our developer (Wards) don't maintain anything that the estate management company (GEM)are quoting for as far I know. GEM have been taking money off people since we moved in (for us, that was Nov 12), but we are paying for things that aren't actually there ... the nature reserve for one.

None of the staff live here, in fact, they are registered in Herts and we're in Kent!

I guess we just don't want to pay for something that is not there .. it's the bulk of the payment (£121 out of £178).
I'd happily sit on a voluntary board for the estate management so I'll look into that .. thank you.

Any other ideas from people are more than welcome.

Doesn't matter that the developers staff don't live there, I would expect sales director or someone would be put in a director until the residents take over.

Again, in our case the money is charged immediately but is retained in the business until such time as it is utilised - if they end up overcharging they will reduce future bills. This is why there are 2 separate companies and they are both audited, so that this can be kept track of. As a resident I will be receiving a copy of the accounts of James' estate management company, and I will be able to see the expenditure and the income and whats left over (or if there is a shortfall).

I would really suggest you go and speak to your developer about this. The sales staff should have fully briefed you on this so that you understood it, and if they haven't then go back and get them to explain it again to make sure you do understand. Pentlands have also written to me to detail this as well.

Blackpool_Saver

I like places like that, they attract the kind of people who want things to look nice and want to look after their property and the surrounding area.

Missme

Freehold or leasehold, if you are on an 'estate' there are likely to be service/maintenance charges.

If there is anything remotely communal ( that solitary tree/bush in an oasis of concrete and tarmac) there are likely to be sevice charges.

Leaseholders will have recourse to the LVT or First Tier tribunal now and freholders, as before, can wait to defend the civil action to recover charges outlined in the transfer docs.

Tancred

Missme wrote: »

Freehold or leasehold, if you are on an 'estate' there are likely to be service/maintenance charges.

If there is anything remotely communal ( that solitary tree/bush in an oasis of concrete and tarmac) there are likely to be sevice charges.

Leaseholders will have recourse to the LVT or First Tier tribunal now and freholders, as before, can wait to defend the civil action to recover charges outlined in the transfer docs.

There are plenty of estates where there are no management charges. Normally these charges tend to exist on 'fussy' estates where the developers have either been asked (by the previous landlord for example) or have decided themselves to impose such charges in order to ensure that grass gets cut promptly etc.

I don't object to paying around £100 a year, but any more than that is excessive.

Councils seem more and more to abstain from taking responsibility for these things, while still charging high council tax! :mad: