Discrepancy in budget

gridsset

Good morning, please forgive me if this isn't the right category for my query, I couldn't find a more appropriate one.

In 2019 we bought a flat (leasehold) which is in an estate where there is a mix of 12 flats in 2 blocks and 8 houses.

We never gave too much attention to the terms of the lease until one of our flats residents brought to our attention that according to how the budget was split, the flats were to pay 75% of the management fee contrary to the terms of the lease that say that the management fee is to be paid in equal shares by the whole estate budget (in which flats contribute).

To be more precise, there are 2 micro budgets, in the estate budget we all chip up (houses and flats), then there is a flats only.

We have noticed that until 2007 the management fee has always been charged equally, then from 2008 (when the new managing agent took over), the management fee was charged 75/25 between flats and houses for no apparent reason.

When we signed the contract to buy the flat there wasn't any footnote and the lease still says the management fee is to be charged equally on the estate budget.

Could you please help me to understand whether what I am thinking is right?

Thanks in advance for your time and help. 

canaldumidi

I'm not 100% clear what you mean, but it looks like there's an issue.

Can you 

* quote the relevant section of your lease, and also

* confirm whether all the other flats' leases are the same, and

* quote the relevant part of the houses' leases (if they are leasehold) orTitles (if freehold).

Can you also quote the relevant parts of the latest budget.

gridsset

canaldumidi said:

I'm not 100% clear what you mean, but it looks like there's an issue.

Can you 

* quote the relevant section of your lease, and also

* confirm whether all the other flats' leases are the same, and

* quote the relevant part of the houses' leases (if they are leasehold) orTitles (if freehold).

Can you also quote the relevant parts of the latest budget.

Thanks for the message

The section of the lease says 
The service charge for each accounting period is 3.51% of the items listed in section 6 (costs to which all flats and houses contribute: cost of services, reserve fund, insurance, accounting fee, management fee, recruitment and dismissal costs, interests, statutory requirements)

All the other flats have the same lease, the only difference is that 2 bed have 3.51% and 3 bed have 5.27% as % to pay for the estate service charge l

I don't know whether the houses are leasehold or freehold.

canaldumidi

So are you being asked to pay 3.51% of the management fee?

gridsset

canaldumidi said:

So are you being asked to pay 3.51% of the management fee?

No, as they have split the management fee it appears that I will have to pay 5.34%. 

Racky_Roo

That's pretty standard when there is a mix of houses and flats. I would assume you have services the houses don't, like communal cleaning and maintenance, therefore the extra is to cover the work to deal with all that

gridsset

Racky_Roo said:

That's pretty standard when there is a mix of houses and flats. I would assume you have services the houses don't, like communal cleaning and maintenance, therefore the extra is to cover the work to deal with all that

Thanks for your point. 

I don't have any objection to what you say, however it needs some backing. There is no clause in the lease, no contract with the management agents that says otherwise, neither a written agreement among the shareholders.

Also, there were budgets from 2005 that show the management fee being charged to the estate equally and not 75/25 flats houses. 

GDB2222

Where I own flats there are two components to the service charges, namely block expenses and estate expenses. I pay different percentages for the two, but I get one bill. 

That’s normal, as I would expect the flat owners to pay for maintenance of the fabric of their own blocks, and the house owners for their own individual expenses.

gridsset

GDB2222 said:

Where I own flats there are two components to the service charges, namely block expenses and estate expenses. I pay different percentages for the two, but I get one bill. 

That’s normal, as I would expect the flat owners to pay for maintenance of the fabric of their own blocks, and the house owners for their own individual expenses.

This is what happens to us too. 

For instance, we all pay the right % for gardeners, estate sinking funds and everything that is shared among everyone, however we are charged almost twice the management fee. 

canaldumidi

So it appears that the separation of charges is probably 'fair', but that the leases were not drawn up to reflect that.

Unless there is more in the lease than what has been quoted (and one always has to read them fully) it looks like the charge could be challenged.

gridsset

canaldumidi said:

So it appears that the separation of charges is probably 'fair', but that the leases were not drawn up to reflect that.

Unless there is more in the lease than what has been quoted (and one always has to read them fully) it looks like the charge could be challenged.

Thank you