Are my factor fees unreasonable?

Eli_Nathan

We bought our first flat in May and were told that the factors fees were around £90 per month. We thought this was really expensive but as it was our first home we had no point of reference.

A month or so later the fees jumped up to £99

Now, its coming into the next quarter so they sent us a bill for the previous quarter. It says that the fees for that quarter are £400!

And with our 90-99 per month, we've only paid half of that... So they want another £200 :mad:

I feel like those fees are ridiculous?

The fees include buildings insurance, electricity for the common areas. cleaning and grounds maintenence as well as their management fee.

Should we be looking for a different factor? And how much of a pain is self-factoring?

The management fee is only £40 per quarter... So is self factoring even worth it?

Thanks!

csgohan4

it depends, you agreed to it when you bought, indeed the service fees can be a lot more when there are repairs to be made and not enough money in the sink fund

Eli_Nathan

Any repairs that are needed are charged on top of the monthly direct debit though

Are you saying 400 quarterly is a normal amount to pay?

davidmcn

It's not uncommon. It really depends on the type of development, what you're getting for your money, and how many properties it's split amongst.

We self-factor and pay next to nothing, but that's because we don't have any regular cleaning / gardening etc or a common buildings insurance policy - so we just deal with any ad hoc repairs etc. And we consist of just three owner-occupiers, so easier to manage than larger blocks/developments. Obviously the real money-saving approach would be to hoover your own stairs, cut your own grass etc rather than pay people to do it for you!

What do the neighbours think?

scottishblondie

It's pretty impossible to say whether or not it's reasonable based on the information you've provided, but I will say I don't think there is a "normal" amount. How big is the development, what type of properties, what are the communal areas, is there a lift? For example, I own a flat in a development of 14. We have a lift, secure entry system, a communal stairwell and a small back garden with bin store. We pay for weekly cleaning, a gardener once a quarter and the regular servicing of the lift. I pay £70 a month towards my account, but receive a bill quarterly which tells me my actual share of the costs. Sometimes I have to pay an additional amount, sometimes my account is in credit. We pay the communal insurance policy separately, usually an extra £350 a year.

Regardless, your quarterly bill should list all the costs and you can look at that and determine whether or not those costs are reasonable for the services provided. I wouldn't recommend self-factoring, it's a right pain especially when you have to chase up people for payments etc. You could get together with the other owners and move to another factor, if you can find one that will provide better service for a lower price.

sal_III

I believe the average is about £1/sqft per year. It heavily depends on what services you get, lifts for example are rather expensive, also if there have been claims on the building insurance the premiums can skyrocket.

The point is all of the funds have to be accounted for and the management company should provide breakdown of costs. Their only "profit" is from the management fee, which depending on the size of the building isn't unreasonable at £160/year. This is essentially the only money you could save by self managing, unless you star cutting costs by not cleaning that often etc.