Service charge has increased 108%

eddddy

LegallyLandlord said:

I really feel for you. The problem is that unlike the dispute resolution service for tenancy deposits, there’s nothing for leaseholders. There is some guidance from RICS, but that’s not binding. 

There's the first-tier tribunal - and their decisions are legally binding.

The law says that service charges must be 'reasonable'. If a leaseholder believes that there service charges aren't reasonable, they can pay £100 and have a hearing at the tribunal.

If the leaseholder wins the case, the tribunal generally says the freeholder (or management company) must pay the £100 back to the leaseholder, as well as adjust the service charge.

The tribunal is intended to be accessible to leaseholders without the need to get solicitors etc involved.  There are many examples of leaseholders winning cases without legal representation.


But if it's a dispute about something specialist or complex, you might want to get reports from RICS building surveyors, to support your case etc.

JReacher1

Percentages can be difficult to judge on whether the increase is fair. I pay around £120 a year but this year it was £220 as they needed to fell some trees. 

I would guess that there is an exceptional cost this year. Do you have a look residents/estate Facebook group. If you do join that and ask people what is going on. Someone always knows. 

propertyrental

[Deleted User] said:

bouicca21 said:

What does it cover?  Have you looked at the accounts?

Yes since I found out the increase, I did. 

For 2021 I have calculated and it is correct.

for 2022 I have calculated and it is not correct. 

Do you mean the maths does not add up? The total cost for the year is greater than the sum of all the items money is spent on? That would seem unlikely...

Or are there items in the accounts that should not be there?

Or what?

gm0

The % uplift reasonableness idea is a total distraction.  Local context is all.  Property and grounds.  What is looked after.  How old is it etc.  Breakdown.  What has happened recently/is needed - cladding, staircases, fire safety improvements, tree surgery

History of site and whether the service charge was setup correctly early on to start collecting tithes (sinking fund) for both cash buffering year to year cyclical maintenance, scaffold and external paint / render, paths, pointing, guttering), car parks and such like.  And the truly long term stuff - roofs, and especially lifts.  

One site I know just had a broadly inflationary (large in 2022) uptick to management agent fee - cue protracted AGM outrage about the "big number" that is the  managing agent fee >10k - until you work out how many employee FTE that actually is for how much of the year - to attend to all the stuff that residents "think" the managing agent should attend site for / get involved with sorting out.  All you get is part of one person and a share of some admin assistants who call screen, log issues and appease

I lived in an apartment where the developer appointed agent was terrible and it took years to get even basic budget reporting and breakdowns and a decent maintenance plan in place to keep the property up - just cyclical window painting stuff like that. 

Sinking fund for lifts etc was next on the to do list but it took years before the basics was sorted.   We were there from the start as youngsters cheering on some older folk trying to get it moving onto sensible tracks. But we left before the right to manage and freehold purchase discussions began in years 10-20.

The people buying as we left in years 8+ were *very* annoyed to discover that early leaseholders had skipped off without paying any dues into a sinking fund and that fees for cashflow to build one would now fall to them.  The profile of the service charge was "too low" to start with and then "higher" later to make up the ground. While the "I bought a new property at a new build premium and I should not expect to pay for maintenance for a bit" crowd of course also thought that they had acted entirely appropriately. 
You cannot please everyone.    These things follow a lifecycle

I found a very attractive flat for an elderly relative.  Great value.  Then I discovered the listed building flat roof and the empty sinking fund. Hard pass.  Explained the superficially attractive valuation.

[Deleted User]

propertyrental said:

Deleted_User said:

bouicca21 said:

What does it cover?  Have you looked at the accounts?

Yes since I found out the increase, I did. 

For 2021 I have calculated and it is correct.

for 2022 I have calculated and it is not correct. 

Do you mean the maths does not add up? The total cost for the year is greater than the sum of all the items money is spent on? That would seem unlikely...

Or are there items in the accounts that should not be there?

Or what?

I mean that I am able to calculate the cost for 2021 from the budget, and that matches what the previous owner was paying.  ie total budget for my block divided among the flats. When you do that for 2022 it doesn't match. It is nowhere near matching.

[Deleted User]

diystarter7 said:

Hi

Good management agents send you a copy of the years report on costs/incomes/debts what was done and why charges have risen etc etc  You can even get one-off fees where all the windows/roof, cctv etc etc needs changing or upgrading.

Best to avoid apartments for that reason imo and we have a friend in London/Greenwich on the riverfront  past the dome that has a duplex apartment - several years ago he told me his service charges were 9k and the duplex opposite was 14k as it was bigger and he was fed up and finding hard to sell at a reasonable price (what he mean was if the service charges were much lower the price of his place would have been much higher but due to services shooting up the few years he'd been there they price of the property had stagnated)

Thanks

I have managed to find the budgets on their website, apart from that they have sent nothing.

That would be wonderful but I am in London and this is where I wanted to live being from here.

[Deleted User]

JReacher1 said:

Percentages can be difficult to judge on whether the increase is fair. I pay around £120 a year but this year it was £220 as they needed to fell some trees. 

I would guess that there is an exceptional cost this year. Do you have a look residents/estate Facebook group. If you do join that and ask people what is going on. Someone always knows. 

I haven't been here long enough to to really know anyone, I guess I will soon meet someone. 

Richard1212

Flats I am associated with in one development have seen the management company raise the service charge by 6% as between 2022 and 2023. I'm gobsmacked by the figure the O/P is faced with   

eddddy

[Deleted User] said:

I mean that I am able to calculate the cost for 2021 from the budget, and that matches what the previous owner was paying.  ie total budget for my block divided among the flats. When you do that for 2022 it doesn't match. It is nowhere near matching.

Deleted_User said:

I have managed to find the budgets on their website, apart from that they have sent nothing.

That would be wonderful but I am in London and this is where I wanted to live being from here.

What type of website do you mean? Have you logged into your personal online leasehold account, or is it something else?


Why are you looking at the budget for 2022 and the budget for 2021?  It sounds like your question is about the budget for 2023.

For example, do you appreciate  that the budget for 2022 was probably created in 2021. It was an advance estimate (or guess) of how much would be spent in 2022. The amount actually spent might be more or less than the budget.

[Deleted User]

eddddy said:

Deleted_User said:

I mean that I am able to calculate the cost for 2021 from the budget, and that matches what the previous owner was paying.  ie total budget for my block divided among the flats. When you do that for 2022 it doesn't match. It is nowhere near matching.

Deleted_User said:

I have managed to find the budgets on their website, apart from that they have sent nothing.

That would be wonderful but I am in London and this is where I wanted to live being from here.

What type of website do you mean? Have you logged into your personal online leasehold account, or is it something else?


Why are you looking at the budget for 2022 and the budget for 2021?  It sounds like your question is about the budget for 2023.

For example, do you appreciate  that the budget for 2022 was probably created in 2021. It was an advance estimate (or guess) of how much would be spent in 2022. The amount actually spent might be more or less than the budget.

I meant 2022 and 2023 .They released a budget in sep 22 for the year going forward. As I say it was less than the 2022 budget. 

It's the website portal for the management company. They don't send anything by post, it's all digital.