London Service Charges

Aemon

HI All,

I'm looking for advice on a property I'm currently undergoing purchase on.

To provide context the property is a 70sqm split level (my flat is two floors) terraced house in south west London which has been converted in 2x properties and was built about 1890.
The communal area is a small entrance about 2sqm which has a door to the Ground and Lower Ground Floor property and another one to my future property. There are no stairs in the communal area. In this communal area there is Emergency Lights and Fire Alarm system, there is no lift or garden.

When the initial offer was made I was advised there was a £1920 (960 for my flat) service charge , with insurance of about £400-£450 Per Flat and a £250 ground rent annually per flat. Broken down as follows

All prices are divided by 2

• Electricity 200
• H&SFRA 240
• Asbestos 306
• Management Fee 660
• Repairs & Maintenance 500

This seemed a little high to me considering I had prices of about £700 on similar but slightly smaller properties but I was pragmatic as I like the property and went ahead with it. Unbeknown to me the freeholder purchased in 2017 and has since brought in a new management company. This price has now to £1413(Multiplied by 2 to 2826) increased to the following:

• Asbestos 306
• Bank Charges 60
• Emergency Light, Smoke and Fire Alarm 360
• Health and Safety 240
• Management Fees 660
• Repairs and Maintenance 1200

What has got my concern is the following things.

1. I've requested that i get permission to install fibre optic cable for TV/Broadband (Good broadband is important to me and my job) and I've been asked to potentially pay £950 + £450 Admin Charge + VAT.
   While i was expecting a fee this is excessive for a installation of a single cable from the front door to my stairs
2. They there is a significant increase in the repairs and maintenance, however the management company have stated the have yet to perform a review of the property. This seems strange that they can increase the of the Repairs+Maint but not have performed a review?

The management company had some middling reviews online, but quite a few of the negative ones where about increase in service charge of £1000, but again being pragmatic and thinking that you only hear the bad reviews I went ahead within and at the time there was no reason for the price increase.
In addition there is also the Bank Charges fee which seems odd to me in this day and age.

Firstly, do these prices seem valid given the context of my property. Fully understand if it had a lift and large communal area but it doesn't have those so I'm not sure what to think?
Am I being incorrect in my view of pragmatism for the property, fully understand on high fees if I was making major changes to the property but a cable to go from the street 1 metre in the communal area and into my flat seems excessive?

Many thanks in advance

bouicca21

Have you asked to see the accounts?

jojo19834

Run a mile, that is unnecessary and unfair. Who should pay to install fibre optic?! Plenty of places won’t charge you

Aemon

In response to the query on accounts from poster above

The issue is they've literally just taken over the management. I've queried why and am awaiting a response.

Also in addition they are requesting £350 + VAT to "Register My Details"

This seems excessive given the management fee of 660.

[Deleted User]

Seriously, if you haven't purchased the property run a mile.



Be very wary of new freeholders..They commonly buy Leasehold property's in order to ramp up charges..Who is the freeholder?



I have first hand experience of this behaviour from managing agents who are just puppets for the aggressive freeholder. This is just the beginning...

Aemon

Deleted_User wrote: »

Seriously, if you haven't purchased the property run a mile.

Be very wary of new freeholders..They commonly buy Leasehold property's in order to ramp up charges..Who is the freeholder?

I have first hand experience of this behaviour from managing agents who are just puppets for the aggressive freeholder. This is just the beginning...

These are my concerns exactly. I'm currently renting I was hoping I was done with excessive fee's seems thats not the case

The freeholder is a doctor or dentist that doesn't live in London. Looked them up on companies house, They own a 3 other properties, which house 10 flats. I've been tempted to make a visit too them and ask the current tenants on the state of the situation, but these issues have only come up in the last few days.

[Deleted User]

Aemon wrote: »

These are my concerns exactly. I'm currently renting I was hoping I was done with excessive fee's seems thats not the case

The freeholder is a doctor or dentist that doesn't live in London. Looked them up on companies house, They own a 3 other properties, which house 10 flats. I've been tempted to make a visit too them and ask the current tenants on the state of the situation, but these issues have only come up in the last few days.

Go and ask the other tenants..


Unfortunately with leasehold property's this is all too common. I presume there is a shortage of 'share of freehold' flats available in London?


Personally I would walk...

Aemon

Deleted_User wrote: »

Unfortunately with leasehold property's this is all too common. I presume there is a shortage of 'share of freehold' flats available in London?

Yes, and the ones that do are snapped up quicker, previous offers failed on share of freehold. This property ticks all the other boxes for me and I was willing to live with the issues of leasehold to be pragmatic as I knew I'd never find anything perfect. At the time because the management company/freeholder has just changed I didn't have all the facts.

I'm still getting clarity of the fibre cable issue, I'm hoping it was a misunderstanding and it was the start of raising my concerns that this is a money grabbing management/freeholder, but I'm feeling very cynical about it all at the moment.

bouicca21

Aemon wrote: »

In response to the query on accounts from poster above

The issue is they've literally just taken over the management. I've queried why and am awaiting a response.

Also in addition they are requesting £350 + VAT to "Register My Details"

This seems excessive given the management fee of 660.

If they have prepared the invoice for the service charge, then they must have accounts to back it up, newly taken over or not.

What does the lease say? Mine doesn’t authorise charges for registering details - never heard of this, but others will know more than I do. Mine doesn’t authorise charges for anything other than repairs, insurance and a reasonable management fee. If having cable means digging a channel then a charge may be reasonable.

OTH £1400 doesn’t sound wickedly out of place for repairs/maintenance on an older building -if indeed maintenance and repairs are actually being carried out. My service charge varies from year to year depending on what’s been done. Probably going to be higher this year as we are due to be painted.

Is it a new management company or a new freeholder?

As it happens there is a share of freehold block just down the road from me, and it is much shabbier than my block - the leaseholders are too stingy to carry out basic stuff like repainting, cleaning communal areas etc, possibly because most of the flats are rented out.

davidmcn

Aemon wrote: »

• Asbestos 306
• Emergency Light, Smoke and Fire Alarm 360
• Health and Safety 240

Are these one-off charges or being incurred annually? I could just about understand initial fees for surveys or risk assessments, or installing a fire alarm if they haven't been done before, but the idea that e.g. managing the (probably non-existent) asbestos ought to cost almost a pound a day is ludicrous.

Aemon

bouicca21 wrote: »

If they have prepared the invoice for the service charge, then they must have accounts to back it up, newly taken over or not.

What does the lease say? Mine doesn’t authorise charges for registering details - never heard of this, but others will know more than I do. Mine doesn’t authorise charges for anything other than repairs, insurance and a reasonable management fee.

Previous charges have been £1920 so 960 each, from all points this has not changed since 2011. The main increase has been the addition of £780 for both leaseholders for additional maintenance and repairs.

The current lease and I'm paraphrasing, "to contribute and pay to the lessor or his agents or as they may direct one half share or such other fair and reasonable proportion of the costs and expenses and outgoings by the lessor

bouicca21 wrote: »

If having cable means digging a channel then a charge may be reasonable.

No and the other property in the building is already cabled and has an active account., again if i was digging up road or something completely understand, this is running a cable 1 metre from the door into my property via the communal area .

bouicca21 wrote: »

OTH £1400 doesn’t sound wickedly out of place for repairs/maintenance on an older building -if indeed maintenance and repairs are actually being carried out. My service charge varies from year to year depending on what’s been done. Probably going to be higher this year as we are due to be painted.

Is it a new management company or a new freeholder?

This is why I came to this forum to ask, if I could get an understanding of previous history of the management company I would feel more confident, There were some issues noticed during the inspection such as a damaged tile and the roof gutters not being cleaned. However other properties in decent states at least visually in the same area where about 700-800 in terms of service charges. My main concern is that this is a money making exercise.

Had the addition for £400 for the repairs and maintenance been the only thing then I would be less concerned. However building was significantly refurbished twice in the last 20 years. Previously it was a 4 studio apartment building and in 2011 it was converted into a 2 flat property so there should be less maintenance on it for this reason.

The freeholder is new 2018 and the management company took over in late 2018 and have put out their first service charge for the year.

bouicca21 wrote: »

As it happens there is a share of freehold block just down the road from me, and it is much shabbier than my block - the leaseholders are too stingy to carry out basic stuff like repainting, cleaning communal areas etc, possibly because most of the flats are rented out.

Agreed which is why i wasn't too bothered between share of freehold and leasehold they all have their pros and con's, but the current situation has me nervous