Leasehold - Canonbury Management

ve210

Hi everyone,

I need advice please. I have a leasehold flat, we have RTM / are Directors and the management company is Canonbury. We just had our bill from them for the year and it's almost double what we were expecting. It seems very hard to challenge them on their costs too. The other owners of the other 3 flats in our building are lovely, reliable and also concerned.

Has anyone been in a similar situation and can advise the best way out of this? Really concerned every year it will just keep going up and cripple us financially.

Really appreciate any advice you can provide - thank you!

LegallyLandlord

This is really awful with Adriatic and RMG. I feel for you. Same thing happened to me in 2018 when it went up from £1,400 to £2,500 suddenly. 

I guess the best thing is for you to get together with the other leaseholders to challenge it by asking them for the reasons. Did they send accounts and explain what it’s for? Ours was increasing the sinking fund. 

I got fed up with it and sold at the beginning of the year. The increase did make it harder to sell, but I made only a modest profit (less than £5k) after owning the property for 7 years. 

eddddy

So I guess you mean you've received a bill for the estimated service charge for the year ahead.

It should be based on a budget. You could say that you're interested in the budget was calculated, and ask to see the details. (You could also ask to see last year's budget and/or last year's final accounts - if they're ready)...

The budget for the year ahead might say something like this:

• Buildings insurance £x
• Communal electricity £x
• Repairs and Maintenance £x
• Gardening Charges £x
• Cleaning Charges £x
• Bank Charges £x
• etc, etc

So you can see the breakdown, and you can compare the numbers to last year to see what's changed.

If any of the numbers surprise you, you can ask some further questions.

Maybe ask as though you're really interested in the running of the building, rather than you're suspicious of the numbers.

NameUnavailable

You have RTM so you can sack them and employ another agent (assuming you find one that charges more reasonable costs), or do it yourselves.

ve210

eddddy said:

So I guess you mean you've received a bill for the estimated service charge for the year ahead.

It should be based on a budget. You could say that you're interested in the budget was calculated, and ask to see the details. (You could also ask to see last year's budget and/or last year's final accounts - if they're ready)...

The budget for the year ahead might say something like this:

• Buildings insurance £x
• Communal electricity £x
• Repairs and Maintenance £x
• Gardening Charges £x
• Cleaning Charges £x
• Bank Charges £x
• etc, etc

So you can see the breakdown, and you can compare the numbers to last year to see what's changed.

If any of the numbers surprise you, you can ask some further questions.

Maybe ask as though you're really interested in the running of the building, rather than you're suspicious of the numbers.

Thanks for the helpful advice @edddy.
Unfortunately one of the other Directors missed the deadline to challenge the budget for next year and now the opportunity to comment on it has passed. So we are stuck with their ridiculous budget for 2023.

For future though...
- in your experience, when you've challenged and said you want to reduce the budget, doew the management company actually do that? Or make up excuses?

- I've heard that we could (as someone else phrased it above) "sack the management company and do it ourselves". Do you (or anyone else reading this post!) have any advice for this? How would I know if I and the other Directors were managing the building correctly? I'm concerned about taking it on and then having the freeholder claim we've done something wrong or are in breach.

Thanks again to you and everyone else for their help!

ve210

NameUnavailable said:

You have RTM so you can sack them and employ another agent (assuming you find one that charges more reasonable costs), or do it yourselves.

Thanks for this.
I've asked this above in a new comment as well, but just to ask you directly too if that's ok... When you say "do it ourselves" - do you have any advice about how to go about this? I'm very happy to take on extra work for it (as the third party management costs are ridiculous) but I'm not sure where to even start with doing it myself and don't want to be in breach with the freeholder by accident.
Thank you again, really appreciate the advice!

eddddy

ve210 said:

Thanks for the helpful advice @edddy.

Unfortunately one of the other Directors missed the deadline to challenge the budget for next year and now the opportunity to comment on it has passed. So we are stuck with their ridiculous budget for 2023.

What deadline has passed?

The law doesn't specify a deadline like that after which Leaseholders cannot challenge their Service Charge. (But ideally, the leaseholders should say they're paying the Service Charge under protest.)


TBH, it sounds like you and your fellow directors don't really understand how this stuff works - and you've hired a Management Company who are running rings around you.

Perhaps the best solution is to find another management company who will work with you (the directors) more closely, and explain stuff better, etc.

I'm not sure that taking over the building management yourselves would be a good solution for you. 

ve210 said:

For future though...
- in your experience, when you've challenged and said you want to reduce the budget, doew the management company actually do that? Or make up excuses?

It doesn't really work in the way you're suggesting.

You need to look at how the budget was constructed, and see if there is anything unreasonable.

For example, if the budget has individual line items, like:

• Tree Pruning £500

You might challenge that £500 on the basis of one or more of the following:

• The tree(s) don't need pruning
• £500 is an excessive cost for the work required
• The trees aren't the responsibility of the freeholder

So it's unreasonable for that to be included in your Service Charge.

CanonburyManagement

ve210 said:

Hi everyone,

I need advice please. I have a leasehold flat, we have RTM / are Directors and the management company is Canonbury. We just had our bill from them for the year and it's almost double what we were expecting. It seems very hard to challenge them on their costs too. The other owners of the other 3 flats in our building are lovely, reliable and also concerned.

Has anyone been in a similar situation and can advise the best way out of this? Really concerned every year it will just keep going up and cripple us financially.

Really appreciate any advice you can provide - thank you!

We are sorry to learn that the service charges for your block have increased. We would politely ask you to immediately remove the reference to our firm in this matter because the decisions on the level of service charge are not made by the management agent for a block of flats but they are made by the directors of the right to manage company. There can be many reasons why the service charges have to be increased. Often it is because of capital works and fire safety works that are necessary but it can also be because the original service charge levels were set at 2 lower level to cover all of the day to day costs and you would need to examine precisely what the basis of the change is. Our company always issues a summary of the service charge demands before they are sent out as bills and that provides a detailed breakdown of why there have been increases from the previous year so we would suggest that this is your first place to look. Get in touch with us directly - we are going to be able to help you more easily than MSE and people who are not related to your building.

NameUnavailable

ve210 said:

NameUnavailable said:

You have RTM so you can sack them and employ another agent (assuming you find one that charges more reasonable costs), or do it yourselves.

Thanks for this.
I've asked this above in a new comment as well, but just to ask you directly too if that's ok... When you say "do it ourselves" - do you have any advice about how to go about this? I'm very happy to take on extra work for it (as the third party management costs are ridiculous) but I'm not sure where to even start with doing it myself and don't want to be in breach with the freeholder by accident.
Thank you again, really appreciate the advice!

No advice but you need to comply with the requirements of the lease (i.e. if it says the outside must be repainted every 5 years you must do that etc.) and you need to understand the legal obligations around making service charge demands or major works, dealing with late/non-payers, latest legislation around building/fire safety etc. etc.