Shared Ownership - HUGE service charge increase by A2D (any help/advice)

user1977

Scooter_1978 said:

We have a central heating system (for the underfloor heatings/hot water) - that cost is called 'central energy plants' and hasn't risen in the new proposed costing (£30k).

Are you sure that includes the energy costs though? It would seem odd for those not to go up (bearing in mind that gas prices aren't capped for this sort of tariff).

eddddy

user1977 said:

Scooter_1978 said:

We have a central heating system (for the underfloor heatings/hot water) - that cost is called 'central energy plants' and hasn't risen in the new proposed costing (£30k).

Are you sure that includes the energy costs though? It would seem odd for those not to go up (bearing in mind that gas prices aren't capped for this sort of tariff).

Modern developments with what's called 'district heating' (or communal heating) normally have a 'Heat Interface Unit' in each property which has a meter that measures how much hot water / heating water you've used.

And you have a contract (separate from the lease) for paying for that hot water / heating - so it's not part of the service charge.


If there's a £30k charge relating to the 'central energy plants' in the service charge bill, I suspect that's more likely to be for something like repairing the system, or replacing the boiler, etc.


Or maybe this development has an older unmetered system (which is not such a good approach).

benky

I received my new rent\service charge prices from a2dominion on Saturday and was pretty shocked to see my service charge has gone up by 500%! Although it's only an £80 increase (£20 -> £100) and nothing compared to yours, I still can't see how they justify such a large relative increase. Not sure whether to kick up a fuss or not...

TH71

What is it with these massive Service Charge increases? As per my thread, ours has gone up 255% from previous years with no explanation why. We are also shared ownership but in a semi-detached home with Guinness Partnership

Shelldean

Having dealt with A2D about their service charge  I recommend you strap in for a long ride.

I wasn't shared ownership I was a tenant ( they've literally just sold us to another HA )

But in our service charge there was things they hadn't done but charged for. Gardening tree pruning an cleaning. I was in fact charged for communal lights and cleaning when I shouldn't have been. These were lights and  cleaning for the flats.

They ignore you and don't answer questions.

You have to keep at them  and really keep chasing them.

I did finally get a result and a refund but not was it hard work

Scooter_1978

Thanks everyone for your insights and advice.  So far we've done the below;

Spoken to our local councillors who said they'll email A2D also, attend any meeting we have with them and they will raise it with the council housing team.

We're hopefully getting everyone together to fight this from our block (3 floors, 12 flats).

Some of us have already individually emailed A2D and said we want a detailed explanation of the costs and provided specific questions we'd like answered.

I'd quite like to send them a 'pay under protest' email from the whole block once we have spoken to all our neighbours.

We've also emailed the Regulator of Social Housing to let them know about the situation.

I could also go to the media (I have good contacts) but I'm thinking I should hold that up my sleeve for now.

If you think we should we doing anything else do let me know.

RHemmings

Scooter_1978 said:

Thank you everyone, your words/advice are really helpful.

We have a central heating system (for the underfloor heatings/hot water) - that cost is called 'central energy plants' and hasn't risen in the new proposed costing (£30k).

We were built after the cladding issue so there's not a problem/costs on that side.

On the RPI rent side, it says the below

Each year, shared ownership rents usually rise in line with the Retail Price Index which is published in September. Some leases allow for an increase of Retail Price Index only (8.9%) and others allow an additional 0.5% to be added (9.4%).

In 2020/2021 the rent was £310 and service charge was £137 (£477 a month in total with sinking charge). 

4 years later for 2024/2025 they're now saying the rent is £389 and the service charge is £480.79 (£900.51 a month total with sinking charge).  It blows my mind, they can't be allowed to get away with this.  

My breakdown of the 2024/2025 costs and £900.51 a month is
£389.37 for rent (up £33.46 from current cost of £355.91)
£480.79 for service charge (up £260.76 from current cost of £220.03)
Sinking fund is up from £28.44 to £30.55

I'm aware that service charges can change independently of RPI based on predicted work and repairs that need to be done. 

But, for the service charge to go from £137 to £489 in 4 years is about 37.5% increase per year. And, as others have said, that's a big service charge. 

eddddy

Scooter_1978 said:

I'd quite like to send them a 'pay under protest' email from the whole block once we have spoken to all our neighbours.

That sounds reasonable - but it might be best to list the individual name and address of of each leaseholder who is protesting, and make sure that you have their consent.

And make it clear to the other leaseholders that if the HA doesn't back down before the service charge due date, it's safest to pay the service charge that's being demanded, and challenge it later.


Also, if individual leaseholders are contacting the management company, they need to be careful what they say.

Because the law says that if a leaseholder agrees or admits that the service charge is payable, they cannot challenge it later.

For example, one leaseholder received an email about service charges and replied "that's fine". The tribunal ruled that saying "that's fine" means that the leaseholder agreed to the service charge, so cannot challenge it.

ResourcesShared

Unfortunately, when government and housing providers state that shared ownership is "affordable", they mean that the mortgage deposit and 'year-one' costs are relatively affordable (compared to buying a property on the open market). There is an - arguably unfounded - assumption that ongoing affordability will follow. Even more unfortunately, as a shared owner, your housing provider can charge you 100% of all and any repair and maintenance costs. (Other than if you benefit from a 10-year 'initial repair period under the 'new' model for SO, in which case you get a little more help with costs).

You might want to look up the Social Housing Action Campaign (SHAC). They recently teamed up with an initiative called Find Others on a campaign to End Service Charge Abuse.

For info on shared ownership more generally (potential hazards and costs), you might also want to look up Shared Ownership Resources.

daveyjp

Time to get your paperwork out, lease etc and confirm as a shared ownership occupier if you are liable for what is being charged for.

In mixed tenure developments there can be differing charges for owner occupiers, affordable occupiers and shared ownership occupiers.  Over time these differences can be 'forgotten' and a one size fits all calculation is used which is incorrect.

Its one reason why in my local area housing associations refuse to take on apartments in mixed tenure developments.