Maintenance Charges Leasehold Flat

cpage87

Hi All,

I was hoping some of you could give me some advice regarding maintenance charges on leasehold properties. I am currently considering placing an offer on a 1 bedroom leasehold apartment. There are two other flats in the building. When I inquired about the service charges I was told that rather than a fixed annual service charge, all maintenance costs were divided by three and paid by the three owners as and when they arise.

This obviously could potentially leave me exposed to some very high costs and I would have to look deeply into the building insurance that the freeholders have in place. However, I was wondering if anyone else has come across this type of maintenance charge arrangement before. I was only ever aware of a fixed service charge structure.

Any advice would be greatly appreciated.

Chris

Ulfar

I would run away from this. If you are going to buy a flat, its nice to have a service issues run in a professional way with a sinking fund, preferably by a residents association. Ad-hoc arrangements can end in tears very easily.

cattie

It is perfectly normal for this type of arrangement when there are only say 2, 3 or 4 flats involved, especially if the flats are part of a converted house. It is no more costly than paying an annual service charge & can actually work out cheaper. As long as it is managed properly & has a decent freeholder there is nothing to worry about.

When you own a property that carries an annual service charge usually the maintenance for the following year is estimated, but if major repairs are required, you will still be billed for your portion of the costs, unless the annual service charge contributes to what is called a sinking fund for major repairs that might be needed. Even if there is a sinking fund, if any work needing to be carried out was in excess of the amount available in the sinking fund, then leaseholders would have to make a contribution to make up the shortfall.

When buying a flat your solicitor would be looking into what arrangements are in place regarding the management etc. so would warn you if they felt there were any pitfalls to be aware of.

kleapatra

I've lived in my leasehold flat for 8 years and I have yet to pay a penny in maintenance!

fablanta

kleapatra wrote: »

I've lived in my leasehold flat for 8 years and I have yet to pay a penny in maintenance!

Wow! The leaseholders in the other flats must be so mad at you for not paying your share

zarf2007

kleapatra wrote: »

I've lived in my leasehold flat for 8 years and I have yet to pay a penny in maintenance!

I bet you'll have a big smile on your face when you need to fork out 20K for a new roof and redecorating + 100 other things you never paid for but are rotting away.......sharp as a marble.

LEJC

i have just bought a flat and whilst looking fund this type of thing quite often especially in flats that formed part of large houses....i walked away when the senario was mentioned,and have purchased a flat in a block that is managed by an established exterior company on a fixed monthly fee.


Whats included with the management charge can vary substantially as can the price in general so make sure you check with each property you view what the service charge actually includes.

AdrianC

You won't be exposed to any higher costs than having a sinking fund - because you'll be paying for the same things to be done - but they will be less predictable, and less spread. One year (or eight!) you'll pay nothing, another year you'll have a large bill all at once. But the total amount to leave you will be the same. If you're worried, open a "building maintenance" savings account, and pay what you think'll be a reasonable contribution into that every month.

kleapatra

zarf2007 wrote: »

I bet you'll have a big smile on your face when you need to fork out 20K for a new roof and redecorating + 100 other things you never paid for but are rotting away.......sharp as a marble.

Nothing to redecorate - there's only a very short communal hallway and I don't even use it as I have my own entrance. Roof is fine and there's no outdoor space. Can't imagine what could possibly need to be done! There's only 2 flats and a shop that doesn't have access the communal hallway.