High Service Charge Increase

HampshireH

It's very common place.

If they now have a shortfall on last year they are learning from that mistake and raising the estimate this ueae to hopefully prevent a reoccurrence.

All costs have gone up from insurance to repairs.

Insurance and utility costs specifically will have increased substantially if a new policy / plan is in place.

eddddy

mark_cycling00 said:

One way that legislation etc protects you is that the management co can only set an annual change based on the previous years expenditure, inflation plus any extra costs that have been agreed for the next year. 

Which legislation are you referring to?

Section 19 of the Landlord and Tenant Act 1985 says that a service charge payable in advance must be 'reasonable' - but it doesn't mention the formula you describe.

But it's possible that a specific management company has chosen to use the formula you describe, because they believe it is a 'reasonable' formula to use.


Or are you quoting from some case law?

NameUnavailable

Marky4040 said:

user1977 said:

Would you have preferred that they charged you more last year instead? It seems clear it was merely an estimate.

Yes i would actually, i mean come on, most of what they charge for is difficult to rationalise anyway since they only send you headings like "ground maintenance" "repairs" "electricity" etc . You don't actually get to see the bill they were sent do you.

You can request to inspect the accounts/receipts etc., and by law the MA has to facilitate this (usually allowing you to visit their offices to inspect/take copies).

As already said, the practice to reconcile the account is usual. If they had spent less than expected they'd be giving you a refund (or more likely a credit against the new charges).

As for budgeting, it's wise to try to save more than you expect to have to pay for the service charge each year because there WILL be other bills down the line for 'major works' not covered by the service charge. Read your lease to see if it says anything about regular works on the outside or communal areas (redecorating every X years etc.).