Freeholder has suddenly impose a management agent, increasing annual charge by over 300%

BrettCollins

Is there anything that can be done to stop this.

anselld

More detail needed.

Annual charge for what?  New charge, old charge, etc. ?

Might be perfectly fair, eg freeholder previously diy managing for next to nothing, decides to appoint professional management co for whatever reason.  Perfectly reasonable if the manco is charging a fair market rate for the job.

Peter999_2

Percentages really don't help in cases like this.   If he was charging £3 a month then he'd now only be charging £12 a month.

How much, in pounds, has it gone up?   As has been previously mentioend if he used to do it himself and has now appointed a company it will go up a lot.   When I stopped doing my block of flats and got a professional company the monthly charge went from £25 to £75.

NameUnavailable

Yes the freeholder can appoint an agent assuming that you don't have Right to Manage?

Who managed the building up to this point?

A management company will charge quite a lot just to 'manage' - that's without any charges for actual works/maintenance. If you and other leaseholders don't like the arrangements then look into getting Right to Manage or buying the freehold if you are able to.

gm0

You can't make the Freeholder do all management actions for free.  They have sole agency on that decision.

So absent RTM - they can appoint an MA of *their* choice.  And recharge it subject to the provisions of the lease.

With RTM you get to choose the who. And the what (beyond basic obligations that must be in scope of the contract).

There are tribunal challenge processes for some categories of charges.  But don't expect to win a battle on there "not being one".  Or it being unreasonably expensive if it isn't 20k and up. Divided by N units.  Scope dependent obviously.

10k buys very little managing agent now after recent inflation.  The split of the bill make a huge difference (number of units).

Or you can collectively as leaseholders vote to implement RTM and follow the process to take control and appoint your own managing agent.  And will discover that hiring a managing agent is still just as expensive.  But as you only have one property - you can't attract agencies with more volume of blocks to contract for.  So it will depend on who you can find locally and what bids you can get.

Or your volunteer "director leaseholders" (who organised the majority of leaseholders vote and then arranged the RTM and would let the agent contract - can instead do all the work for free to the benefit of all leaseholders.  That would be their decision to take it on and donate their time for free.  Good luck with that idea.

Few would do it for anything bigger than a split house.  But in a split house - many do - as the economics are punishing if you don't.

100 units. MA. 
Multiple blocks and lifts.  MA.  

4 units in a house - no MA. 

Somewhere >4 and <50 is the break point. 

This is rough if you have 10-20 lots of stuff to keep on top of - and nobody wants to do it. So you need one.  But it's £1000 each for management overhead.  And then the actual day to day costs on top.

Even if a bigger site does try self manage via RTM - the arrangement will likely collapse in a few years when someone moves out and nobody wants to take over. Or just an ill timed critical illness and a lease change and suddenly no directors, no context and no handover.  And it's a crash where the situation needs to be cleaned up from scratch.  This is bad enough when there is an MA and volunteers keep changing as the volunteers learn "how it works" from the MA who is trying for maximum milk for minimum effort and acceptable levels of dissatisfied mooing.

eddddy

So I guess you're saying...

• You've received an estimated Service Charge Bill for the forthcoming year...

• That estimated Service Charge Bill is either 300% of last year's estimate, or 300% of last year's actual Service Charge Bill (you haven't specified which).

If so, you need to look at...

• The line items on last year's estimate or last year's actual accounts (things like Buildings Insurance, Communal Electricity Costs, Repair Costs etc)

• Versus, the line items on this year's estimate (things like Buildings Insurance, Communal Electricity Costs, Repair Costs, management fees etc)

... to see which things are estimated to cost more, etc


If you think any of the line item charges on this year's estimate are not reasonable, you can choose tp challenge them at a tribunal if you want.


BUT.,. sometimes what happens is: You have a disinterested freeholder who hasn't done any maintenance and repairs to the building in years. So they hire a Managing Agent to sort everything out. And there's a big backlog of maintenance and repairs to do - so the Service Charge jumps upwards (But maybe only temporarily, while all the overdue jobs are done.)

Hoenir

eddddy said:

BUT.,. sometimes what happens is: You have a disinterested freeholder who hasn't done any maintenance and repairs to the building in years. So they hire a Managing Agent to sort everything out. And there's a big backlog of maintenance and repairs to do - so the Service Charge jumps upwards (But maybe only temporarily, while all the overdue jobs are done.)

Rarely any sinking funds in place either.