Excessive admin charges on leasehold major works

propertyman

Dear Council

In response to your Notice of Estimates you have included £14xx for administration charges.

While doubtless this is relation to some expense, can you please explain
-what expenses they are that lead to this charge
-by specific reference to the lease, the clauses that allow these to be recovered



Admin charges are likely just a standard entry on their software and can relate to-everything form contract administration to paperwork to taking the urine( some councils have been rapped on the knuckles for doing just that).

You need to know what it is in this case and why they think the lease says you have to pay it.

daztraction

Thanks for all this, folks. I'll dig out the lease to see whether it says anything about admin (or related) charges before I do anything though.

daztraction

Pored over the lease (it's hard work reading it - not a comma in sight!), and the only bit that I can see pertaining to this is:

". . . major structural repairs and replacement are to be charged separately as they arise but the Council will reserve the right to require the payment of such reasonable sums as the Council consider necessary to to put to reserve to meet the future liability of carrying out such major works."

"reasonable sums" eh? Not in this case. Well, it might well be; I don't know because the Council haven't broken down their expenses for me.

Right, a letter it is then. Thanks for your help so far folks!

daztraction

So I finally received a reply.

I sent:

Thank you for your letter detailing an explanation of the admin fee element of my major works invoice (which was £1,541.88 of £24,670). However, this is not what I asked for. What I asked for was a breakdown of what the admin fee comprises; basically, YHN [Note: YHN: Your Homes Newcastle - the council]’s expenses.

The explanation that YHN provided was:

"The admin fee is a percentage based figure (relating to the overall cost of works) that covers the cost of the involvement of YHN's Technical Team and the part they play in overseeing the scheme."

While doubtless the 6.25% fee is related to some expense, can you please explain:

* What expenses they are that lead to this charge;
* By specific reference to the lease, the clauses that allow these to be recovered.

Without such an explanation, I am struggling to believe that Your Homes Newcastle can justify recovering a £1,541.88 administration charge.

And I received this reply:

I have enclosed a copy of your lease and marked the relevant paragraphs applicable to your query about the major works administration fee and the clauses that allow this to be recovered.

The administration charge is calculated at 6.25% to cover the cost of the following:

(i) Carrying out surveys to identify the works to be included in tenders and assist with the procurement process to award contracts to contractors to carry out these works.
(ii) Contract management to include cost control, project management and inspection of the works.
(iii) Performance management to gather data which can be used to benchmark contractors against which can result in them not being allowed to tender for future works.

I appreciate that the lease is written in legal terminology and you may wish to seek an independent view on this. You can send a copy of your lease to https://www.leaseadvice.org.uk who are a Government backed service that provide free independent advice service for leaseholders.

So, in short, the council have not provided me with details of expenses that have made up the charge, but rather provided their justification of the charge, which is different.

It looks like dialogue with leaseadvice.org.uk is on the cards unless somebody has any ideas?

daztraction

(I should also add, the 6.25% formula is NOT mentioned anywhere in the lease.)

Nobbie1967

The council staff doing admin for your roof are doing work on many other projects as well, so unless they have a time recording system in place they will not be able to provide a breakdown of costs. A fixed percentage seems an efficient way of allocating the costs, otherwise you waste time and money on a time recording system.

For the work the council have mentioned, the charge seems pretty fair IMHO.

daztraction

That's the thing though, how can you tell whether the charge is a fair one without that time recording system?

Glastoun

Would it have helped if they'd just sent a bill for £4368.65 at the beginning, and not mentioned an admin charge? That would still have been £1631.35 less than their estimated cost anyway.

They probably know roughly the value of work they're due to carry out in a year, know roughly how much their support staff will cost for a year, work it out as a percentage and then apportion that percentage out across each job. If they had a time recording system, they'd have been able to charge you for digging out your lease, marking the appropriate areas and responding to your letters....

daztraction

Glastoun wrote: »

Would it have helped if they'd just sent a bill for £4368.65 at the beginning, and not mentioned an admin charge? That would still have been £1631.35 less than their estimated cost anyway.

Not really, because being the anally retentive tightarse that I am, I would have pressed them for a breakdown of the £4368.65 cost, trying to find ways to save.

They probably know roughly the value of work they're due to carry out in a year, know roughly how much their support staff will cost for a year, work it out as a percentage and then apportion that percentage out across each job. If they had a time recording system, they'd have been able to charge you for digging out your lease, marking the appropriate areas and responding to your letters....

They probably do know all that, but the council, as part of a better homes programme, have thousands of houses to upgrade, so my share to pay may be significantly higher than Joe Bloggs in a block of twenty flats down the road.

Is that fair? I haven't a clue. I don't know how much these expenses are and I half-suspect that the council don't know either. And it's the expenses that I'm trying to get to the bottom of so that I can pay a fair amount.

You know, they could also work out what the expenses are, the actual admin fee could be many thousands of pounds, and it could therefore bite me on the !!!!.

nicegirl

I feel for you daztraction, we are in the process of selling a leasehold property where the management company (council here too) charge 15% admin fees!

It's the main reason we're selling up.