Merry Xmas Leaseholder. Pay me MORE money!

Newtie_Newt

Kynthia wrote: »

I used to own a flat that was in a building that had two flats and a shop. The freeholder was the shop owner and split everything three ways. The service charge, which included building insurance and a fee for his time, varied between £350 and £1.5k per year depending on what work needed doing. I'm struggling to see how you might be ripped off but ask to see what the money is needed for.

Well that does seem rather unfair. I guess our situation isn't that bad. Our 'service' charge isn't a service charge at all really as we pay as and when things need doing. It really is just an admin fee for the FH and we will need to ask to find out what this money we pay goes towards.

G_M

Newtie_Newt wrote: »

How do we have control over how much the FH increases service charge by each year? He could increase it each and every year couldn't he?

By keeping track of what the money is being spent on! For the 3rd time: write and ask! Whether you get/insist on audited accounts is a secondary issue (as valhaller says getting them audited would add an additional annual cost), so I withdraw that advice, though it is an option.

But if the FH responds that the the extra £30 this year (from £75 to £105) was spent on, say, replacing a fallen roof tile on 23rd April 2013, you'll be able to judge whether you think this was fair, or you are being ripped off.

And if the charge increases again next year, by asking for a breakdown again, you'll again be able to judge if it is fair or a rip-off.

But if you never ask, you'll never know. And certainly no one here will know!

As for

We feel wholeheartedly that he is trying to recuperate his costs somehow..... due to his tenants practically destroying the place.

well, as suggested above, £30 is not going to go far to repair a 'destroyed' flat!

Newtie_Newt

Thank you for all your advice and now we have asked the FH exactly what the service charge covers. He says via email that it's: 'administrative charges such as cost of ink and paper to print out invoices as well as postage costs' - still seems a bit steep. He posts his demand for payment of this admin charge together with buildings insurance and ground rent once each year.

Whenever work needs doing we also get notification through the post and pay our share towards this work. No costs for any work comes from what he calls the 'service charge' no matter how minor. I suppose he's charging for the time he spends in arranging plumbers, locksmiths etc. However we have not had anything needed doing in the last two years...

Still in the grand scheme of things it's really nothing - £75 - could be worse.
Happy Boxing Day!

Kynthia

I still don't think £105 a year is much for the freeholder to charge for the paperwork and time arranging building insurance , paying any communal bills, tracking what maintenance needs doing, booking tradespeople and getting quotes, keeping financial records, etc. Mine charges an additional £20 for every letter he writes, and writes them unnecessarily. It's all relative but what does the lease say?