New Build - Service charge rise of 25% (!!!!)

MercilessKiller

Hi All

I recently bought a new build property from Barratt London which, to be quite honest, is a fantastic property in a brilliant development and other than some housing association residential issues, things are pretty good

The problem? Well, I got a letter through today confirming that the accounting for the previous year (2016/2017) had been complete, and instead of the estimated £300k costs to service, it was actually £400k. This has meant that I now need to increase my service charge payments from £150 to £207 to cover.

The reason for this? Staff. Literally, just, staff. This came under 3 categories:
1) Employing a handyman to take care of jobs around the development rather than outsourcing to save money (but this wasn't accounted for in estimates)
2) Staff sickness - There were some long term illnesses resulting in use of temporary staff agencies which incurred costs
3) Staff replacement and development manager - Recruiting agency fees and the induction of new roles within the development

I'm totally confused with how on earth they can forget to cost for staff turnover or recruitment costs in estimated budgets (surely it's known that staff will turn over every so often - and it has been 2 and a half years since we moved in). There was an above inflation rise the first year, and now a 25% rise the 2nd year - what does that say for the future?

I'm pretty sure continuous rises like this will price out everyone (new buyers and existing residents) - As a resident (and leaseholder) are there any rights I have here to demand answers from management on why they have such a shambles of a hiring policy?

Thanks!!

martindow

Deleted - replying to a different thread!

[Deleted User]

That is terrible, presumably the other residents are also effected.

National Leasehold Campaign - get yourself over to this FB page for some advice.

david1951

Sounds like another racket to increase their income. How they actually do this is anybody's guess, but typical examples are "Management Fees - £X", or "Office Costs - £X", etc.

Also - "Staff replacement and development manager" - sounds dodgy. Surely there is someone there already that has the ability to hire staff.

Ask for the accounts (they have to provide a copy, you might need to pay an admin fee) and try to pick out these costs. Expose them to the other residents and see if you can get them to back down on their expenses. You only have power over them if you group together.

MercilessKiller

Thanks David - They provided the detail costs breakdowns (line items) including estimates and actual costs. Though are you referring to this or something different that goes into specifically more detail?

I feel like these costs may have been genuine, yet we were exposed to them because of poor management. I.E I feel like the development managers are potentially pretty bad at their jobs - So rather than hire someone in a proper way, they use super expensive agents or make decisions that actually end up costing residents more with no repercussions.

I've requested to speak to the development manager and suggested setting up some form of leaseholder meeting to discuss the charges due to the substantial increase as I imagine most residents have concerns with the increase..

konark

It's actually a 38% rise.

They have no incentive to cut costs or be efficient because you and the other residents are contractually obliged to pay whatever they ask.

csgohan4

another reason not to buy leasehold

glasgowdan

They can't raise charges because they decided to create a new role on site. You can stand firm, but in reality it'll probably get nowhere.

csgohan4

glasgowdan wrote: »

They can't raise charges because they decided to create a new role on site. You can stand firm, but in reality it'll probably get nowhere.

It gets no where because if you want to do something, probably most of the owners' don't reply or are investors and don't care

dancing_star

MercilessKiller wrote: »

This has meant that I now need to increase my service charge payments from £150 to £207 to cover.

£207 a MONTH??

HOW much?!?

That's extortionate!

MercilessKiller

dancing_star wrote: »

£207 a MONTH??

HOW much?!?

That's extortionate!

Tell me about it - They assured me this is only temporary however and they expect costs to lower in the future.

Then again, if the development manager is as useless as I'm expecting, then I doubt that's true. I just feel like we all have targets to hit at work and if we miss them, we get fired. So why isn't this guy getting replaced when he has contributed to a £100k increase in costs due to poor estimates and management? Weird.