Service charge costs for flat (please help)

sixpence.

Hello

I am posting this because I need some advice: the service charge for my flat which I am lucky enough to own has increased by a whopping 36% this year. It was already relatively high because I live in a London block that costs a bit to run (we've got a downstairs reception and all that). In past years it was about 6K a year. This is a lot in itself, but as the flat is portered and has CCTV etc, I sort of just accepted this as something which I should have researched a bit more before buying.

Now it is going to be over 13K this year.

They have just asked for the first payment, which I've made, because I don't like to leave these things unaddressed. However I feel angry about the whole thing and also a bit helpless... is there anything that can be done? There are over a hundred flats in the building. Of course inflation is high, but it does seem as if they're taking the Mick... any help would be appreciated. Thank you. 

Cloth_of_Gold

I have a friend who lives in a flat in London that has 24 hour concierge, a restaurant, gym, swimming pool, library and cinema, i.e. a very grand place with lots of flats (not sure how many). Her service charge was fixed when she bought it, about 7 years ago, at £12K a year but I believe that if you weren't on a fixed service charge arrangement, pr you have just bought,  then the SC is nw about £18K per year.

I know someone else who lives in London in a block of 30 flats in zone 2 (but almost in zone 1) , with none of the above, and they pay about £3.5K pa.

I know someon else who lives in a block of 12 flats in the same area as the flat above, also with no extras (i.e. no porter, gym , library, etc.) and they pay £2.5K pa

Hope that helps.

sixpence.

Thanks for the figures. I guess what I'm really curious about is what can be done (if anything) to try to take control of the situation? Whether that means seeking new building management or having some kind of inquiry... Would appreciate any ideas. 

eddddy

sixpence. said:

...or having some kind of inquiry

You (and/or the other leaseholders) can do your own enquiry. You have the legal right to inspect invoices etc.

You can look into the accounts in detail to make sure all the charges are 'reasonable'. (The law says they must be 'reasonable'.)

Random examples of charges which might not be reasonable might be:

• Paying the cleaners £120 per hour - it's not reasonable to pay that rate to cleaners
• Paying to have the grass cut 3 times a week - it's not reasonable to cut the grass that often
• Paying the freeholder for things that the freeholder is not required to do, according to the lease

sixpence. said:

I guess what I'm really curious about is what can be done (if anything) to try to take control of the situation? 

You can..

• 1) Ask a tribunal to appoint a manager - but you have to show that the freeholder (or their managing agent) is doing something wrong.

• 2) As leaseholders, take over the 'right to manage' the building. In reality, the leaseholders would probably want to hire a new management company who would follow their instructions. You don't have to show that the freeholder (or their managing agent) is doing something wrong, to do this.

• 3) If the leaseholders bought the freehold (it's called Colective Enfranchisement) that might give you the right to take over management of the building - but it depends on the type of lease you have.

1 is often very hard to do. For 2 and 3 you need to persuade the majority of the leaseholders to get involved.


Here's a bit more info:
Appointing a manager: https://www.lease-advice.org/advice-guide/what-does-appointing-a-manager-mean/
Right to Manage: https://www.lease-advice.org/advice-guide/right-manage/
Collective Enfranchisement (buying the freehold) : https://www.lease-advice.org/advice-guide/ce-getting-started/

Richard1212

You can ask a tribunal to change management company in certain circumstances or you can exercise your "right to manage "  :  one of the criteria for forcing change is that the management agents are charging too much service charge : 

https://www.gov.uk/leasehold-property/right-to-manage-and-management-disputes#:~:text=You may be able to,as your 'Right to Manage'

diystarter7

Hi OP

You can take control but it takes doing. Look at teh accounts, see if you can get cheaper is the main start and what are the savings and projections - what repairs are anticipated etc. The larger the aprtment along with parking spaces, lifts, cctv, security, lovely com areas, window cleaning, keeping paths clear removing illegal rubbish etc, etc soon adds up.  Then there are people that wont pay or cant pay - it looks easy but is not but at times IMO it can be done a lot cheaper.

i had clients that lived by the river and their service charges were at a point (about 10/12 years ago) where they were finding it hard to sell and the prices of those apartments still lag behind the massive rises of other apartment blocks that do not have the same expenses.

Thanks

NameUnavailable

Have you enquired as to why the increase this year is so much? What exactly within the charge has increased?

As said, you can challenge the charges at the First Tier Tribunal but you do need to do your homework to present your case and PROVE that the charges are unreasonable.

It's best to join forces with other leaseholders who (presumably) feel the same as you about the charges.

elsien

Are there any maintenance works which is more expensive than usual this year, which the sinking funds doesn’t cover? Large unexpected bills? That’s what you need to be asking the leaseholder and checking for in the accounts.

Jonboy_1984

Cloth_of_Gold said:

I have a friend who lives in a flat in London that has 24 hour concierge, a restaurant, gym, swimming pool, library and cinema, i.e. a very grand place with lots of flats (not sure how many). Her service charge was fixed when she bought it, about 7 years ago, at £12K a year but I believe that if you weren't on a fixed service charge arrangement, pr you have just bought,  then the SC is nw about £18K per year.

I know someone else who lives in London in a block of 30 flats in zone 2 (but almost in zone 1) , with none of the above, and they pay about £3.5K pa.

I know someon else who lives in a block of 12 flats in the same area as the flat above, also with no extras (i.e. no porter, gym , library, etc.) and they pay £2.5K pa

Hope that helps.

Wow….

Out here in the Shires, less than an hour from Paddington, group of 50 or so flats in five blocks (2 and 3 stories) with just cleaning, gardening, routine maintenance/periodic inspections and a sinking fund contribution and were paying £900 per annum. 

diystarter7

Jonboy_1984 said:

Cloth_of_Gold said:

I have a friend who lives in a flat in London that has 24 hour concierge, a restaurant, gym, swimming pool, library and cinema, i.e. a very grand place with lots of flats (not sure how many). Her service charge was fixed when she bought it, about 7 years ago, at £12K a year but I believe that if you weren't on a fixed service charge arrangement, pr you have just bought,  then the SC is nw about £18K per year.

I know someone else who lives in London in a block of 30 flats in zone 2 (but almost in zone 1) , with none of the above, and they pay about £3.5K pa.

I know someon else who lives in a block of 12 flats in the same area as the flat above, also with no extras (i.e. no porter, gym , library, etc.) and they pay £2.5K pa

Hope that helps.

Wow….

Out here in the Shires, less than an hour from Paddington, group of 50 or so flats in five blocks (2 and 3 stories) with just cleaning, gardening, routine maintenance/periodic inspections and a sinking fund contribution and were paying £900 per annum. 

You can get close to that it all depends on how big, where the apartment is, and lift/s, secuirty, eltric gates, carpaprking, cctv, plus comm areas, flowers/plants in comm areas, cleaners, heating etc can add a lot but imo some are taking the mick and many people are finfing it diffuclt to sell these places

Thnaks

EssexHebridean

sixpence. said:

Thanks for the figures. I guess what I'm really curious about is what can be done (if anything) to try to take control of the situation? Whether that means seeking new building management or having some kind of inquiry... Would appreciate any ideas. 

We're in a very different situation to you at our freeholder is the local authority - and there is no management company involved. I won't bother telling you our charges as they are for a very different "product" from yours so won't really be relevant.

We have successfully challenged service charges in the past - we've had electricity costs for communal areas reduced (we were being charged a ludicrous amount which, when it was broken down, they were unable to justify), cleaning costs reduced (the cleaning was not being done as frequently as the schedule that they were charging for) and challenged an increase in the management cost one year also as this seemed higher than could be justified - they put this one down to an "error" naturally! 

You've had some excellent advice and strategy suggestions from edddy in particular above. Speaking with your neighbours is a must I suspect - ultimately, if the others are all wealthy individuals to whom £13k a year is the sort of small change they have routinely kicking about then you may well be on a hiding to nothing. On the other hand, you may also find that a majority are thinking "ouch" but are unsure whether anyone else feels the same! 

For a block with so much to manage, it's probably impractical for it to have anything other than a professional management company looking after things even if this was something that the majority of residents would be in favour of as just the day to day running would be a full time job and more.  Similarly, you're never going to have a service charge as low as someone in a block that does not have all the "added extras" that you have, that much will be obvious to you already. 

You should have been provided with an itemised list of service charge expenditure though - that's definitely the starting point to establish why the increase, and why it is so high. That in turn will inform what approach might be appropriate in any challenge.