High service charges before buying

mickybar

happylucky wrote: »

I've paid in excess of this, but in same ball park for central London service charge on apartment.

How many square metres?

Mine included lift, concierge, video entry, key fob etc. Also secure parking etc. Water too.

Does it come with share of freehold?

Has mgmt company changed recently and done backlog repairs? Your solicitor will or should get at least last 3 years full accounts and service charge records. Your seller should also be able to provide you with these answers IMHO if it's a deal breaker.

The figure you quote seems high for the services you quote; I would certainly be wary of this. Good luck.

The flat is around 60sqm, no share of freehold whatsoever. I will try to get some more info when and if they'll come back to me.

Gonzo1987

mickybar wrote: »

The owner (he is living in the flat since it was built) should probably know, shouldn't he?

OP is unlikely to get an itemised breakdown until he does commit.

happylucky

Ok. I can tell you categorically that is way way way too much for the services you quote.

At 11 years old, there's no excuse for potential backlog charges unless the building is ver very poor quality. No share of freehold means you have minimal leverage over rip off mgmt agent. Honestly, I would expect it 2000 or more like 1500 with no lift, concierge, security...You need a breakdown of service charge, ground rent, service sinking fund plus a year of full accounts to know more, I think. Unless very cheap deal (and there are some bargains starting to emerge for sure!) I would personally avoid.

mickybar wrote: »

The flat is around 60sqm, no share of freehold whatsoever. I will try to get some more info when and if they'll come back to me.

happylucky

Ps. I am not tight at all about service charges
I had an absolutely outstanding one on my share of freehold place. Expensive and worth every penny. Top security, immaculate maintenance Inc. Car parking etc. Lift in perfect working order, just fantastic! Still much cheaper per sq. Metre than your quoted charge. Figure I'm commenting on was July - Dec 2014 service charge, location zone 1 and a "tourist spot". Good luck!

Brown_Eyed_Girl

The place i'm looking at is around £2000 but is having a lot of work to tart it up as the previous maintenance company did little. That and the building insurance is done via them, so will be higher as it has been underpinned.

If it's new i'd wonder why so much, and what major works were due. As other say, you will get some of this information if you get an offer accepted and instruct a solicitor but by that point you've spend money.

That said i've known others with high charges - just cause it's London, just cause they can. Up to you as it's a cost that is unlikely to go down unless you and others took on the management but that's a big move.

bouicca21

When I get the service charge demand I get a set of accounts showing expenditure. Surely the vendor has something similar?

AlexMac

I'd find £2.6k pa a deterrent sum (given your Q about future resale), as put another way, and even after adjusting for say, typical water bills of £300-400pa, that repesents annual expenditure equivalent to another £30-45k repayment mortgage.

And while I assume it does include a fat admin fee to whover manages the block, plus very toppy contarctor rates every time a lightbulb gets changed, I'm willing to bet it doesn't include much of a sinking fund for future major maintenence sauch as external decorations every 5-6 years, or roof repairs 50 years into the furure?

By way of comparison I've paid £450 pa to £1.3k pa service, insurance and maintenance charges on my past 3 leasehold flats of 2-3 bedrooms, and most of those included a sinking fund. The toppiest one was in a 150 year old block and the £1.3k pa included a substantial contribution to grounds and roads maintenence on a big private estate... But also, each one was a 'shared freehold' where we controlled costs and managed the Company and the building ourselves. This issue of control over costs is so important to me that I've walked away from managed blocks or 'absentee freeholders' or charges over £1.5k pa

The problem about getting straight answers is that you'll have to commit to buy and instruct solicitors to get solid data; some vendors say that they don't know or can't recall, some EAs are scared to advise in case the info advised by the vendor is wrong, and some profit-centred freeholders or agent charge extortionate sums simply to answer the standard pre-sale enquiries.

So ask nicely, but don't trust the EA's replies, and presume the worst; and it could be worse. My mates pay £4-5k for a docklands flat's service charges, although they do have nicely landscaped grounds and a gym...

Me, I prefer my historic little cheapo shared freehold!