Service Charges: Help!

LBo

Hi,

I moved into my property in June 2018 and the management company advised my solicitor that it didn’t foresee any increases. At that point, I was paying £80 per month. In the first year, no essential maintenance happened as the basement needed to be cleared and fire safety checks needed to happen.

In May, an increase happened and monthly payments were upped to £180 to cover new carpets (priced at £2k per month for 3 years - it’s a tiny building), a step repair of £2k and cover essential maintenance. I was advised by a solicitor that it is disappointing but to not dispute as it would go against me if trying to sell. The step work never happened and neither has some of the essential works but yet I’ve just been landed with a £600 overspend bill.

This is a lot for a single person to pay and it feels like this is getting out of control fast. My mortgage is due for renewal in May so I’m concerned that this may affect things.

In the time I’ve been at the property, the company has been through five property managers and they all have no answers and ignore most of the time. Most of the flats in my building are rented too so don’t have contact with owners.

I know many of you out there have had experiences like this but have any of you had success in tackling issues?

Thanks!

cattie

Really it's unrealistic to expect no increase on service charges each year, you'd normally expect at least a small increase & buildings insurance & other such outgoings would rise year on year. I'm surprised your solicitor didn't warn or explain this to you.

From the sound of it, the way you've explained the increase due to paying for the carpets is due to the fact that there is no sinking fund at all to pay for any future works or improvements, which isn't ideal. It means that leaseholders will face bills such as your £600 one, when there's not enough money in the kitty to meet costs. Managing agents have to be paid, as do auditors & there are other charges such as electricity for common parts, water testing, H&S inspections & a portion of service charges usually goes towards such costs. You should have been told what the £600 charge was to cover.

As your building has been through 5 managing agents, it certainly sounds as if something is amiss & poorly managed & it's a pity most of the flats are rented out as you could have considered becoming self managed.

Increased service charges will not affect you applying for a new mortgage, so don't worry about that. The charges would have to be at an absolutely ridiculous amount for a mortgage lender to be concerned.

davidmcn

LBo wrote: »

to cover new carpets (priced at £2k per month for 3 years - it’s a tiny building)

How tiny? That's £72k on carpet!

LBo

Blonde moment - £2k per year on carpet ����!♀️

LBo

One thing to clarify is that the five property managers we’ve been through are within the same company but no handover or knowledge between any of them.

Thanks for all the replies so far!

eddddy

It sounds like you own a leasehold flat.

So the starting point would be to see what your service charge is being spent on, to see if it's reasonable.

You have a legal right to receive a summary of the service charge, plus the right to inspect receipts etc.

See:
https://www.lease-advice.org/faq/how-can-i-find-out-what-my-service-charge-is-being-used-for/
https://www.lease-advice.org/advice-guide/service-charges-other-issues/

If any item on the bill is 'unreasonable', you can challenge it, if you want.

Examples of bring 'unreasonable' might include:

• Things that you are not required to pay for, according to your lease
• Things that are 'unreasonably' expensive (i.e. goods and services that the managing agent should have been able to get more cheaply)

rachel230

When you purchased the flat, did your solicitor not ask if anything would be needed done in the next three years? That is pretty normal practice so check. Your s/c have risen sharply and it sounds as if they are trying it on, especially if they are asking for money for work that has not been done.
The National Leasehold Campaign Facebook group has over 15,000 members all in a similar situation who are campaigning for regulation to bring a stop to unregulated , uncapped, and ever increasing service charges. Join us over there and we will try to advise you.
Who is your managing agent/freeholder?