Misinformed about service charge :(

diggingdude

you haven't wasted any money on legal fees your solicitor has worked for you and pointed out that you have to pay £400 extra every year as a minimum. That's money well spent whether you decide to go ahead with the flat or not. It can't hurt to ask for a reduction just be clearing your head what you going to do if you don't get it. perhaps ask your solicitor to stop working for now so you're not building up a bigger bill

bouicca21

Service charges vary year to year. Mine is about £1200, but I don’t have a gym and a swimming pool, or other expensive to maintain things like a lift. It will be more in the near future as the building needs painting. Membership of a gym could easily be from £400 a year for a council leisure centre up to £1500 a year for a David Lloyd. Seen in those terms the service charge could be seen as a bargain.

In OP’s shoes I’d be after looking at the invoices to see what the money goes on, and I’d be far more concerned about ground rent and the length of the lease.

onwards&upwards

A tip for future viewings OP.

If you ask an EA a question that has a precise answer and they give you a round number off the top of their head, it won’t be right. If they look at a bit of paper or check on their phone/table the chance of the answer being accurate goes up from 0% to about 20%.

AdrianC

ilikepancakes wrote: »

I think that asking for the reduction is reasonable because I can't see a reason I should pay more from what was agreed.

Do you mean the SC? It wasn't "agreed".

The EA gave you a figure.
How did the EA get that figure? From the vendor.
So it's second-hand information, already the risks of inaccuracy multiply.

Who sets the SC, anyway? Neither the EA nor the vendor - the freeholder and/or management company, based on what they've spent on the property and facilities in the year. So there's no way you can "agree" the SC with the EA, or even the vendor.

How to calculate the reduction then? It will always be subjective.

Of course. It's a wet-finger-in-the-air.

You think it's worth £5k off the previously-agreed purchase price. The vendor may disagree. If you're prepared to walk over this, then so be it. But, if you do, remember it's your choice to do so. And, if they agree, don't complain in the future - because you decided that it was worth that figure.

ilikepancakes

Thanks all of you. I have only 2 choices: proceed or ask for some reduction.

I'm getting less angry now. All is ok with the flat, gym is not best equipped but it is there.
Lease is 109 years, ground rent £150 and it will be revieved every 21 years (next review in 2022), will be higher by the percentage flat value went up (from what I understood reading the lease but will ask my solicitor).
In the morning I was 100% sure I will ask for £5k reduction and would walk away if not agreed, now it's 50%...

Smodlet

OP, are you pretending to be Melania Trump?

ilikepancakes

AdrianC wrote: »

Do you mean the SC? It wasn't "agreed".

The EA gave you a figure.
How did the EA get that figure? From the vendor.
So it's second-hand information, already the risks of inaccuracy multiply.

Who sets the SC, anyway? Neither the EA nor the vendor - the freeholder and/or management company, based on what they've spent on the property and facilities in the year. So there's no way you can "agree" the SC with the EA, or even the vendor.

It is not about agreeing the service charge. Maybe i worded it incorrectly but I mean I have asked what is the current service charge, I have received an answer "£2000". Now, if was £2000 when I asked and now it is £240 then I do not see any problem.

The problem is when it was £2400 at the time when I asked.

AdrianC

ilikepancakes wrote: »

Thanks all of you. I have only 2 choices: proceed or ask for some reduction.

Three. Walk now.

eddddy

So presumably you're saying that the estimated service charge for the flat for the current year is £2400.

As others suggest, you should look at the 'line items' for the service charge account estimate - to judge how much is 'regular' yearly costs, and how much is 'occasional' costs.

(for example, there could be a charge for repainting the gym and/or re-grouting the pool, which only happens once in every 7 years.)


You could also check last year's estimated and/or actual service charge - perhaps it was £2000. Hence the comment from the seller.

FTBAngst

ilikepancakes wrote: »

But I don't understand why people above are surprised I'm pi*sed off.
I have paid for the solicitor, I have lost 3 months and now I have to pya extra £400 every year because of somebody's mistake?

I think I’m surprised you’re p*ssed off because
1) as a rule I don’t believe anything an EA says anymore
2) you’re complaining about having had to pay a solicitor, but this is how I’d expect to get this information reliably (through a solicitor), that’s part of why you hire them.
3) are you prepared for the problems with service charges and leasehold? Like others have said, it varies. If you’re not happy to pay an increase of £400 now, would you be happy to pay £3000 for a roof repair etc? (this was the case with one of the flats I went to view, even with a sinking fund each flat was facing an extra £3k for unexpected roof repairs)