Service charge has increased 108%

propertyrental

[Deleted User] said:

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.

I'm afraid the budget for 2021, whilst it might give an indication of what future costs will be, really cannot lead to the conclusion that the accounts for 2023 don't 'add up'.

You need to look at the estimated accounts for 2023. That will show the detail of what money is expected to be spent on what specific items, which may be quite different to the previous years(s). eg
electricity: £x.00
gardening:: £x.00
internal decoration: £x.00
etc 
etc

Then 
a) decide whether each item is reasonable, given today's costs, and given the current needs of the building, and
b) whether the total of those items is as specified, and
c) whether your share of total is accurate

bouicca21

I am totally lost.  What doesn’t match?  Maybe some hard figures would help.  So, something like, in 2022 the budget for communal cleaning was £x but the estimate for 2023 is £y. 

And how does the estimated budget compare to actual expenditure? Was the estimate for the previous year actually accurate?  Is there a shortfall?

GDB2222

I’d expect anything energy related in the budget to have doubled. 

eddddy

So - I think we've established so far...

• The management company's website portal has has a total number for the 2023 budget for your building

• You have divided that number by the number of flats in your building, to calculate your share

• The bill you have received is greater than the share you've calculated

So send a quick email to the management company to ask for clarification (but try to make your email a bit clearer than your posts here!)



You've also done a calculation which gives the answer 108% - but it isn't yet clear what numbers you used, where you got those numbers from, and what calculation you did.

If you want, you could start your explanation again from scratch - quoting the real numbers, the names of the documents you got them from, and what calculations you did.

propertyrental

eddddy said:

So - I think we've established so far...

• The management company's website portal has has a total number for the 2023 budget for your building

• You have divided that number by the number of flats in your building, to calculate your share

• The bill you have received is greater than the share you've calculated

OP should also refer to the lease for the appropriate share. Often the total cost is not simply divided by number of flats - for example 2 bed flats might pay a larger share than 1 bed. The lease will specify how the service charge is calculated.

[Deleted User]

bouicca21 said:

I am totally lost.  What doesn’t match?  Maybe some hard figures would help.  So, something like, in 2022 the budget for communal cleaning was £x but the estimate for 2023 is £y. 

And how does the estimated budget compare to actual expenditure? Was the estimate for the previous year actually accurate?  Is there a shortfall?

I’m not really sure how it could be confusing. The total budget for 2022 decided by the number of flats (which are all the same size) equals what the owners were paying in service charge. 

I am saying if you decide the 2023 budget by the same number of flats it doesn’t match. What we are paying is far higher. 

I’d rather not post the actual numbers. The only documentation on the site is the budgets for the past three years. I can’t find anything to say what was actually spent if these are predicted budgets.

eddddy

Deleted_User said:

bouicca21 said:

I am totally lost.  What doesn’t match?  Maybe some hard figures would help.  So, something like, in 2022 the budget for communal cleaning was £x but the estimate for 2023 is £y. 

And how does the estimated budget compare to actual expenditure? Was the estimate for the previous year actually accurate?  Is there a shortfall?

I’m not really sure how it could be confusing. The total budget for 2022 decided by the number of flats (which are all the same size) equals what the owners were paying in service charge. 

I am saying if you decide the 2023 budget by the same number of flats it doesn’t match. What we are paying is far higher. 

I’d rather not post the actual numbers. The only documentation on the site is the budgets for the past three years. I can’t find anything to say what was actually spent if these are predicted budgets.

In your original post you asked:

Deleted_User said:

Am I stuck with this charge?

If you want anybody to answer that question, you'll have to provide more information.

Nobody here can see the website you're mentioning, and nobody here can see your service charge bill or your management company's accounts - so it's very difficult for anybody to suggest anything.


There's a possibility that you have misunderstood something. But without more information it's impossible for anyone to guess what you might have misunderstood.

[Deleted User]

eddddy said:

Deleted_User said:

bouicca21 said:

I am totally lost.  What doesn’t match?  Maybe some hard figures would help.  So, something like, in 2022 the budget for communal cleaning was £x but the estimate for 2023 is £y. 

And how does the estimated budget compare to actual expenditure? Was the estimate for the previous year actually accurate?  Is there a shortfall?

I’m not really sure how it could be confusing. The total budget for 2022 decided by the number of flats (which are all the same size) equals what the owners were paying in service charge. 

I am saying if you decide the 2023 budget by the same number of flats it doesn’t match. What we are paying is far higher. 

I’d rather not post the actual numbers. The only documentation on the site is the budgets for the past three years. I can’t find anything to say what was actually spent if these are predicted budgets.

In your original post you asked:

Deleted_User said:

Am I stuck with this charge?

If you want anybody to answer that question, you'll have to provide more information.

Nobody here can see the website you're mentioning, and nobody here can see your service charge bill or your management company's accounts - so it's very difficult for anybody to suggest anything.


There's a possibility that you have misunderstood something. But without more information it's impossible for anyone to guess what you might have misunderstood.

That’s very possible as I stated a few posts back I’m a first time buyer so it is a learning curve. I have asked the company to explain this increase. Once they get back to me I will update the thread. Thanks 

[Deleted User]

Just an update to say so far I have received no explanation. 

Tiglet2

Deleted_User said:

bouicca21 said:

I am totally lost.  What doesn’t match?  Maybe some hard figures would help.  So, something like, in 2022 the budget for communal cleaning was £x but the estimate for 2023 is £y. 

And how does the estimated budget compare to actual expenditure? Was the estimate for the previous year actually accurate?  Is there a shortfall?

I’m not really sure how it could be confusing. The total budget for 2022 decided by the number of flats (which are all the same size) equals what the owners were paying in service charge. 

I am saying if you decide the 2023 budget by the same number of flats it doesn’t match. What we are paying is far higher. 

I’d rather not post the actual numbers. The only documentation on the site is the budgets for the past three years. I can’t find anything to say what was actually spent if these are predicted budgets.

Have you got a copy of the Management Pack?  If not, ask your solicitor for it.  They, in turn, will ask the seller's solicitor for it - not sure how far along the purchase you are and whether or not this has been received by your solicitor yet. 

Within the pack there will be the last three years Final Account Statements (obviously not for the current accounting year since the actual expenditure won't yet be known).  The Final Accounts are the actual expenditure, not the estimated budget.  This will give you a far more accurate understanding of whether their budget was in line with expenditure or if it fell short.  If it has fallen short for the last three years, perhaps they have adjusted the budget in the current year?