House association - service charge and rent hike

Mokka

Haddenham35 wrote: »

My issue is not that we need to pay the service charge, I totally get that. It's that they are able to increase it by such a %.
Service charge % increase can be practically unlimited- as long as the freeholder can prove it was reasonably incurred.
There's no justification for this and I wanted to know if we, as tenants, have any protection against this type of unreasonable increase.
If the charges have not been reasonably incurred you can challenge them in the First Tier Property Tribunal. You will have to prove why they are unreasonable. The fact they are too high does not matter (unless for expenditure on improvements).
And, in answer to a point above, yes £50 extra a month is not something that can just be absorbed that easily. Unfortunately we live pay cheque to pay cheque.

YOu need to think very carefully about your situation. Interest rates will go up at some point- or when your fixed rate ends and mortgage reverts to SVR rate. You will need to save up and keep your 'sinking fund' for unexpected big service charge bills. By the way, your service charge might have a sinking fund element (to save up for big repairs).

csgohan4

Haddenham35 wrote: »

My issue is not that we need to pay the service charge, I totally get that. It's that they are able to increase it by such a %. There's no justification for this and I wanted to know if we, as tenants, have any protection against this type of unreasonable increase.

And, in answer to a point above, yes £50 extra a month is not something that can just be absorbed that easily. Unfortunately we live pay cheque to pay cheque.

Do you still think it's still cheaper than renting?

daveyjp

Also consider that as the flat is a new build the initial service charge will be based on an estimate of expected costs.

After 12 months the actual costs will be known so an adjustment will have to be made to make up any shortfall in the service charge account.

This is why it is imperative the OP has sight of audited accounts for the SC. 10-20% of costs may be to a sinking fund, 10% management fee plus VAT on some items.

Going forward the increases should be less of a surprise.

Susan1942

I live in a leasehold retirement apartment I bought this in 1998 and at that time I was paying £1800 annually I am now paying £3800 plus £500 for building insurance
We have a sinking fund for major repairs but also a redecoration fund to cover outside and also the communal areas in the development We have got charges for gardening cleaning etc We have a part time manager 3 hrs x 3 a week This was 5 days a week when I first came here and for 4 hrs
We are linked to an emergency system of course and all that service plus the maintainence of it Lifts are very costly to maintain. We are also liable for replacing our own windows and doors.
Telephone costs administraton etc it all adds up
This could be the start of many increases in the years ahead. There will be documentation accounts etc and these can be inspected I am sure but I would not hold my breath. Sue