Maintenance Charges on apartments

MoneyLosingExpert_2

I went to see an apartment yesterday and am going back for a second viewing. It's practically perfect in every way, except for the maintenance charge. Now I've only spoken to the tenants who pay an all inc. charge to the landlord for rent, bills and maintenance. They seem to think however, that the maintenance charge is £700 and doesn't include buildings insurance. This apartment doesn't have a garden, it has a paved front with parking. The communal halls haven't been decorated since it was built in 2002, so it just seems a bit ludicrous to think a company is making about £35k a year to keep a hall clean and the paving swept. If I do decide to buy, would there be anything I could do about this rediculous fee? Also, are they entitled to increase it without consent? I'm a bit naive wrt to this I'm afraid, ir does put me off and would be a worry when I come to sell.

zzzLazyDaisy

That is a maintenance fee of about £60 per month, which isn't unusual. There will be lighting and cleaning of the common parts, redecorating, lighting for the carpark, maintenance of the tarmac on the car park etc. I'm not saying it is good value, just that it is pretty much par for the course.

No, you can't do anything about it. When you take over the lease you agree to the charge. If you default the penalties can be horrendous. And yes, they can put the fee up. I bout an apartment a few years ago with a maintenance fee of £35 a month. Two months later it went up to £54 a month.

Sometimes the maintenance fee might be better used paying of a slightly higher mortgage?

MoneyLosingExpert_2

Theres no lighting for the carpark, although I do take your point about the upkeep of the ground. The communal hallway hasn't been decorated for at least 4 years but I suppose thats not uncommon. It seems really risky to me that they are able to raise the maintenance charge whenever they want!

As you say it seems par for the course with apartments, I wouldn't need a bigger mortgage to buy a house, it's just not practical for me. I'll try and think of alternatives however. Thanks for your advice.

olly300

They can raise the maintenance charge but you can demand (and should be given) a breakdown. If the breakdown is unreasonable you can contest it.

Read http://www.lease-advice.org/livingmain.htm for more information.

If you proceed with the purchase you can find out via your solicitor what is the actual breakdown of the charges.

BTW most service charges seem to weigh in about £1000 per year with buildings insurance for blocks of flats whether they have or don't have communal gardens or lifts, and it doesn't seem age dependant. However when I was looking I found blocks with charges of approx. £2000.

MoneyLosingExpert_2

Thanks for the link, I've just looked and it states:

"The ownership of the flat usually relates to everything within the four walls of the flat, including floorboards and plaster to walls and ceiling, but does not usually include the external or structural walls. The structure and common parts of the building and the land it stands on are owned by the freeholder, who is also the landlord, who is responsible for the maintenance and repair of the building."

Seems pretty unlikely then that the charge wouldn't include buildings insurance surely? If the lease doesn't cover the external walls?

hazeyj

My building ins is payable sep from my service charge as it states that in the lease. This is because the freeholder leased back the building to the management company (which is made up of leaseholders and we in turn employ a management agent) and they retained the right to insure the building.
This does make the leases very messy though.
Our lease dictates that the common parts should be painted every 4 years

sarah_elton

The freeholder is responsible for buildings insurance - you have no insurable interest on the building as you don't own it, and therefore cannot take out buildings insurance. Most freeholders do pass the cost on, either as part of the service charge or as a separate charge.

Don't take tennant's words on how much the service charge is. The figure sounds about normal but don't agree an offer till you know for sure, for some flats service charges are higher than this. Ask the EA what the annual charge is, the seller is required to supply this information.

As others have said, you'll receive a breakdown of the accounts every year, and what portion of your money goes to what.

Communal parts should be decorated on a regular basis - my development is a set of buildings and on a rolling cycle each one gets painted (internal and external) every 4 years. My service charge includes this, plus weekly inspections and cleaning of communal areas, garden maintenance (although we only have a few bushes out the front), buildings insurance, and obviously fixing anything that goes wrong. I pay about £780 a year.

olly300

As hazeyj said all leases are different.

I've seen & I know people who live in properties where the freeholder just collects ground rent and it's up to the leaseholders to organise everything- maintenance including gardening, repairs and building insurance- themselves. There as in other properties of the same size the freeholder sorts out everything.

Where the freeholder sorts out everything while you pay for it, there is less scope for arguments with neighbours in the block/property over maintenance of gardens and building insurance quotes. But then again everything depends on the freeholder - some just collect money and do nothing if the leaseholders complaint about activities of other leaseholders who are breaking covenants whilst others enforce it.

The main arguments seem to be over maintenance of gardens i.e. hedges, bushes that block paths , abandon cars/ parking, fly tipping/rubbish and lightening.

You should really try and speak to the neighbours if the tenants can't give you this information as you will need to get on with them anyway if you move in.

daisyroots_2

I suggest you also have a look at this

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

The Leasehold Advisory Service was set up by the government to give leaseholders free advice on the new legislation. It may be that (after you've purchased) you can unite with other leaseholders to buy the freehold jointly, and thus cut out the ground rent and take control of maintenance charges for ever. This would also increase the value of the apartment when you came to sell.

hazeyj

Yeah I know, I battled with my inexeperienced sols when I was buying my place for 4 months and then sacked them as they said my lease was defective which it wasnt but because they couldnt understand the relationship with the head lease and underlease because of the transfer back to the management company. The headlease isvery complex and whoever drew them up originally wants shooting. Also, we have scince found out that the service charge indicators in the lease ie how big each flat is in the leases are all incorrect so mr bloggs who has a flat 100sq smaller than me is actually paying more service charge than me as in my lease my flat is actually a 100 sq ft smaller than it is. Unless we get all these leases re-written (50 of them) we cannot do anything about it as we have all effectively agreed with what was in them when we signed.
We are trying to collect our insurance from leaseholders in advance so that next year we can actually incorporate it into the service charge rather than getting the bill every year.