Service fees are insane.

mta999

Don't forget there is a lot of paperwork and compliance and inspection to do on flats, especially since Grenfell. You would not have this on a freehold house

Also of course youare paying for the salaries, overheads, travel costs and pensions of the people in the management company First Port doing the admin.

Finally, although you may be paying for 'cutting the grass' you are in fact paying for the management company to oversee a subcompany who run a grass cutting service all of which would be a lot more expensive than just you in your house employing a local gardener to cut your grass

Chief_of_Staffy

Chief_of_Staffy said:

We paid more than that for 'fountain and plaza maintenance', which apparently cost £60k per year total. In reality the figure would have been nearer £2k. Nice, but neither plaza nor fountain were visible from our windows, being 100 yards away surrounded by very expensive apartments and accessed by means of a palatial archway. Oddly enough, the gardens outside our window, which everybody had to walk through to exit or enter the development on foot, were paid for only by us residents in the immediate vicinity.

Again - just for balance...

Your lease would have said you have to pay a percentage share of maintenance of the fountain, plaza, palatial archway and gardens.

And you should have read the lease before buying it. If you didn't want to pay for those things, you could have walked away and bought somewhere else - without a requirement to pay to maintain a fountain, plaza, palatial archway and gardens.

That's not actually true. The lease normally states general expenditure like 'maintenance of communal areas'. There's no granularity as to which areas are paid for and which are not are not the on lease. I believe you can request the past year's expenditure but that's not something that's routinely provided, or something that solicitor would ever tell you.

eddddy

Chief_of_Staffy said:

That's not actually true. The lease normally states general expenditure like 'maintenance of communal areas'. There's no granularity as to which areas are paid for and which are not are not the on lease.

If that's the case it would be a defective lease.

If the lease and/or lease plan isn't clear about what area constitutes a "communal area" as mentioned in the lease, how would the freeholder, leaseholder and/or management company know where the "communal area" is?

A freeholder / management company cannot arbitrarily decide what constitutes a "communal area" and/or who pays to maintain it.

Chief_of_Staffy said: 

I believe you can request the past year's expenditure but that's not something that's routinely provided, or something that solicitor would ever tell you.

If you're buying a leasehold property, your conveyancing solicitor will always request the last 3 years of Service Charge Accounts, showing income and expenditure.

Here's the relevant request on the LPE1 form...



The buyer's solicitor would wave a big red flag to their client, if accounts weren't provided. (Assuming that the lease has existed for 3 years or more.)

Chief_of_Staffy

eddddy said:

Chief_of_Staffy said:

That's not actually true. The lease normally states general expenditure like 'maintenance of communal areas'. There's no granularity as to which areas are paid for and which are not are not the on lease.

If that's the case it would be a defective lease.

If the lease and/or lease plan isn't clear about what area constitutes a "communal area" as mentioned in the lease, how would the freeholder, leaseholder and/or management company know where the "communal area" is?

A freeholder / management company cannot arbitrarily decide what constitutes a "communal area" and/or who pays to maintain it.

Chief_of_Staffy said: 

I believe you can request the past year's expenditure but that's not something that's routinely provided, or something that solicitor would ever tell you.

If you're buying a leasehold property, your conveyancing solicitor will always request the last 3 years of Service Charge Accounts, showing income and expenditure.

Here's the relevant request on the LPE1 form...



The buyer's solicitor would wave a big red flag to their client, if accounts weren't provided. (Assuming that the lease has existed for 3 years or more.)

There's no requirement for that information to cover the kind of thing I initially brought up. I have my lease from 20 years ago and all the documentation. It refers to 'communal areas', 'gardening', 'external areas'. There's no specified level of detail that has to be provided, so stating "Maintenance of gardens and paved areas" would be acceptable even if those paved areas included a plaza and a fountain 100m away. And nobody is going to tour the entire development and say, "Wait, I really need to query if this fountain which I wouldn't be able to see from my apartment will be on my service charge list," and still less, "I need to verify that these gardens directly outside my apartment which everybody uses are contributed to by all leaseholders and not just the owners who directly abut them."

eddddy

Chief_of_Staffy said:
There's no requirement for that information to cover the kind of thing I initially brought up. I have my lease from 20 years ago and all the documentation. It refers to 'communal areas', 'gardening', 'external areas'. There's no specified level of detail that has to be provided, so stating "Maintenance of gardens and paved areas" would be acceptable even if those paved areas included a plaza and a fountain 100m away. And nobody is going to tour the entire development and say, "Wait, I really need to query if this fountain which I wouldn't be able to see from my apartment will be on my service charge list," and still less, "I need to verify that these gardens directly outside my apartment which everybody uses are contributed to by all leaseholders and not just the owners who directly abut them."

I don't really follow what you're saying in the first part of your post.

(But to be clear, the lease probably wouldn't specifically include the words "fountain", "plaza", "arch" etc. The lease and lease plan would more likely describe the communal area. You could then inspect that communal area, and discover that it contained a fountain, plaza, arch etc.)


And your lease wouldn't list all the leaseholders who contribute to the maintenance of the gardens, it would say something like you must contribute 5% or 1/20th (or whatever) of the cost.

That might mean that there are 19 other flats that contribute 5% each, or some flats that contribute 3%, some that contribute 8%, some that contribute 10% etc - as long as the total adds up to 100%, that's ok.

(But the annual accounts might list each flat and the percentage that they contribute.)

Murphybear

We live in over 60s sheltered housing owned by a charitable Housing Association.  The rent includes the service charges, we are given a detailed breakdown which is discussed at a regular meeting.  The service charge covers everything already mentioned plus unlimited use of Miele commercial washing machines and dryers and compared to some I have read about is very low.  

Some of these companies must be making huge profits 😿

QrizB

somerandomusername said:

So I'm looking at a leasehold flat that was built in 2008 for £65,000 and at the time the annual service charge was £958. Now it's £1,875, that's a 4% increase per year on average.

CPI inflation from 2008 to now would turn £958 into £1570, per the BoE calculator. So it's increased slightly faster than CPI.

https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

user1977

QrizB said:

somerandomusername said:

So I'm looking at a leasehold flat that was built in 2008 for £65,000 and at the time the annual service charge was £958. Now it's £1,875, that's a 4% increase per year on average.

CPI inflation from 2008 to now would turn £958 into £1570, per the BoE calculator. So it's increased slightly faster than CPI.

https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

But service charges aren't necessarily going to follow an average "shopping basket" of prices. Ancedotally at least, the inflation rate for things like insurance and tradespeople has been significantly higher than that.

The OP also seems to be ignoring that generally speaking everything else is going to go up too, including the value of the flat.

snowqueen555

£1800 is pretty common nowadays. I think it's slightly on the high side where I am and I personally wouldn't buy at that rate.

The one I'm looking at is around £1400pm at the moment. I really don't want to but what other option is there? The average service charge nowadays is +£100pm so anything below that would be going very good.

It is something you can't escape, unless you buy a flat with share of the freehold and therefore have control over who the company is. Or buy a freehold property. But near in mind if that roof needs replacing that's all on you. Even then, you'd have to employ a company who is for profit, and suffer the same issue. Self management is a headache I'm not sure people want to do, and tend to only exist in smaller build of 2-8 flats.

Some places have low service charges, they are rare to find, let alone finding a flat you like with that charge as well. Again you'll suffer from next to no maintenance, but that's something I'd prefer.

pieroabcd

MikeJXE said:

Never a good idea to buy leasehold imo 

Or anything with any kind of fee attached