Urgent. Massive service charges bill, eager states. Help!!

eddddy

Sapphire wrote: »

What does the lease say about such fees, and increases in same?

Leases don't work like that. Service charges are the cost of maintaining/repairing the building etc.

A lease might last 100+ years. It's impossible to predict maintenance/repair costs for 10, 20, 50, or 100 years in the future - so no attempt will be made to do that in the lease.

eddddy

Firstly, this is incorrect:

DawnRose8 wrote: »

Oh yes, and they appear to have increased the management fee from £1000 to £1700.
Devastated.

The management fee has gone up from £1620 to £1706.


There are plenty of questions to ask, like:

• Why is the common parts electricity bill for 2018 £1,813?

• What happened to the paving causing it to need £720 worth of maintenance/repairs? (A service charge normally only covers maintenance/repairs - it doesn't cover improvements.)

• Why was 2 years of insurance paid in 2018? When did you buy the flat? Did your conveyancer check the accounts etc? Also, the insurance dates don't make sense (changing from June to January).

• What happened to the code lock, door and lock (and waste pipe) that resulted in repairs? Was there a break in?

etc etc

saajan_12

DawnRose8 wrote: »

I'll do better than that. This is my bill for last year and next year;
Accurate Service charge account January - December 2018
Insurance June 2017/2018 + Brokers fee £1,450.00
Insurance June 2018/2019 + Brokers fee £1,464.35 - so 2 years of insurance, looks like they're switching from paying in arrears to paying in advance. Covers upto June 2019
Common parts Electricity £1,813.76 - seems high if just lighting, but may need to be on 24/7. Any other electricals eg door entry systems, management co computers etc
Previous Freeholder Management fee £300.00
Gutters Cleaning £570.00
Key Cutting £42.16
Waste pipe repair £300.00
Smoke Detectors service £107.40
Replace code lock £254.40 - did something break / get lost / need to be brought up to code? seems high but could be reasonable depending on lock
Paving Works £720.00
Door and Lock repair £250.80
Accountants fee £360.00
Management fee December 2017/2018 £1,620.00
Total expenses £9,252.87
Your share @ 1/6 £1,542.15 - last year 1.5k
Received on account for December 2017/2018 £1,047.35
Left on account -£494.80 debit- so looks like last year the actual costs were higher than the estimates so you underpaid £500

Estimated Service charge account January - December 2019
Insurance January 2019/2020 £1,537.57 - looks like they're buying double insurance for Jan-June 2019 as last year's insurance already covered this.. query.
Common parts Electrictiy £200.00 - electricity much lower - I'd query why so high last year.
Common parts Cleaning £950.00 - ask for an invoice and check against what happened. They didn't charge cleaning last year so might be a catch up.
Common parts car park cleaning (1/3 of cost) £416.00 - as above
Drainage Cleaning £400.00
Fire Health & Safety service £300.00
Fire Health & Safety Risk Assessment £350.00
Accountant fee £390.00
Management fee December 2018/2019 £1,706.40- only charged once.. why do you think twice?
Repair fund (if needed) £1,250.00 - sounds like a sinking fund.. this is good, its money in the kitty which can be built up so if the roof caves in, there isn't a big bill suddenly. Its not going anywhere yet.
Total £7,499.97
Your share @ 1/6 £1,249.99 - actually decreased from last year's 1.5k.
Plus debit from last year -£494.80
Total payable £1,744.79

Payment of this account is due by the 24 December 2018.
Any major item of expense will be invoiced separately througout the year should this become
necessary.

1) Management fee is their admin fee for managing all the contractors, invoices, etc. They've only charged this once this year, in line with before ~1,706

2) The rest of the charges are the money they have to spend on energy usage, repairs, insurance etc. Most look okay, thought you can ask for a copy of the invoices / bills if a particular one looks wrong. I'd query
a) why they're double-paying Insurance for Jan-June 2019 as last year's bill should have covered that
b) why electricity was so high last year

3) Your share of the total costs has actually gone DOWN from £1,542 to £1,249. However last year they undercharged you by £494, so you're finishing paying that. In terms of budgeting, you should really have kept ~£100 a month aside based on last year's bill, and when they finalised last year's accounts, the £494 deficit per flat should have been evident there, so you may have known to keep a bit more aside.

4) Looks like most of the bill is legit, so you will need to pay it.. delaying will just incur late charges etc. For next year, I'd keep ~£200 a month aside for service charges and look out for the accounts to be finalised so you know whether it will be a surplus or deficit.

DawnRose8

saajan_12 wrote: »

1) Management fee is their admin fee for managing all the contractors, invoices, etc. They've only charged this once this year, in line with before ~1,706

2) The rest of the charges are the money they have to spend on energy usage, repairs, insurance etc. Most look okay, thought you can ask for a copy of the invoices / bills if a particular one looks wrong. I'd query
a) why they're double-paying Insurance for Jan-June 2019 as last year's bill should have covered that
b) why electricity was so high last yearr

3) Your share of the total costs has actually gone DOWN from £1,542 to £1,249. However last year they undercharged you by £494, so you're finishing paying that. In terms of budgeting, you should really have kept ~£100 a month aside based on last year's bill, and when they finalised last year's accounts, the £494 deficit per flat should have been evident there, so you may have known to keep a bit more aside.

4) Looks like most of the bill is legit, so you will need to pay it.. delaying will just incur late charges etc. For next year, I'd keep ~£200 a month aside for service charges and look out for the accounts to be finalised so you know whether it will be a surplus or deficit.

Sorry, to add- this is newly converted building.
Everyone moved in during 2017 so this is the first end of year account we have received. I moved in in August 2017 paid a year's maintenance up front but not all of my neighbours did.
As far as the electricity is concerned, It's a small building. The only shared lighting is in the one hallway and at the side of the building . It has motion sensors so is rarely on.
Can I ask how you knew the insurance noted would have been up to June 2019?
Am just writing my response and would like to make some sense which is difficult as I'm totally panicked.
Your advice to save towards this is of course sound, I could have managed to scrape together £1000 for the coming years maintenance fee but, this is so much more.

bouicca21

Apart from the questions Saajan has suggested, have you checked the lease to see if the service fee can be collected in advance? Mine is always in arrears.

Taiko

Just on the electricity charges, request a copy of the invoices from the start of the period and the end. This'll give you the unit price, and the consumption between the dates.

Had an issue on my own communal electricity charges this year, which were 4 times higher than the estimate. By doing this, I was able to prove that the charges they'd levied were incorrect on the freeholder, a housing association, systems, which were then supposedly audited by external accountants as being accurate.

wksd

Hi Dawn,

Upon reading this I am 99% sure we live in the same block. Our bill is identical and we live in a block of 6, so I think we live in the same place. We have received the invoices and myself and my partner are querying many of them.

I have just called up about the electricity and found out it is an estimate for a quarter (still ridiculous as Eagerstates then charge their % fee on top of that). We need an actual value for that and I will do that when I get home.

The block paving is going to be paid under protest as it shouldn't have broken in the first instance and needed to be repaired. Also the guttering cleaning? Had no idea about that, among many other spurious charges. Can you message me your number and I can check if we are the same block? Thanks

[Deleted User]

This sort of issue is fast becoming a national scandal and whilst there are some legitimate costs managing agents and Freeholders are using leasehold as a cash cow to invent scurrilous costs and charges.


You need to see about setting yourselves up with a RTM so you can take back control of your costs and manage the building yourselves.

poppasmurf_bewdley

BBH123 wrote: »

This sort of issue is fast becoming a national scandal and whilst there are some legitimate costs managing agents and Freeholders are using leasehold as a cash cow to invent scurrilous costs and charges.


You need to see about setting yourselves up with a RTM so you can take back control of your costs and manage the building yourselves.

There's an article in today's Mail Online about a group doing exactly that:

https://www.dailymail.co.uk/news/article-6456007/Pensioners-took-retirement-home-fed-expensive-fees.html

[Deleted User]

I had to do it aswell, its not an easy option being forced into running a limited company but our managing agents would not have stopped until they bankrupted us and went for forfeiture.


Now it has settled down though its a massive relief not having an invoice for the equivalent of a family car drop on our doorstep every year.