Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Leedsbuyer82
    • By Leedsbuyer82 6th Jan 18, 11:32 AM
    • 5Posts
    • 0Thanks
    Leedsbuyer82
    Fair service charge costs?
    • #1
    • 6th Jan 18, 11:32 AM
    Fair service charge costs? 6th Jan 18 at 11:32 AM
    Hi, everyone

    I'm only a few weeks away from exchanging contracts on a leasehold 2 bed flat in a building of 11 leasehold flats plus 1 shop. Have just received the management account for one year and the totals are as follows, per year. Do these seem fair / standard costs?! I can't find any examples online. in the building, there are lifts and CCTV but no concierge nor gardens or anything extra. And no sinking / reserve fund?!

    As you can tell, there has been a leak which caused damage but I'm not sure whether there is a credit from each of those repairs from the insurance company as I'm still waiting for the next few years' statements.

    (FYI The management fees per flat are based on total area and ours is 705 square feet)

    Light replacements 108
    Lift maintenance! 3158
    Lift insurance 400
    Premises insurance 3498
    Internal repair (boiler leak in shop) 1386
    Internal repairs - water damage in shop. Faulty light in Flat 5. 1347
    Fire alarm!and emergency light testing 1572
    Management fees 2118
    External repairs - cleaning gutters 877
    Electric! 1228
    Bank charges 87
    Cleaning 2060

    Repair - redecoration of Flat 1 due to boiler leak 1982
    Lift phone 248
    Window cleaning 511

    Total = 20,580 pa (divided by 12 properties)

    Thanks in advance!
    Last edited by Leedsbuyer82; 06-01-2018 at 11:34 AM.
Page 1
    • HampshireH
    • By HampshireH 6th Jan 18, 12:57 PM
    • 700 Posts
    • 745 Thanks
    HampshireH
    • #2
    • 6th Jan 18, 12:57 PM
    • #2
    • 6th Jan 18, 12:57 PM
    Why as a leaseholder would your service charge cover repairs in other leaseholder flats?

    That's

    * decorating after a leak (Should be insurance)

    * fixing boiler leak - owners responsibility

    * Faulty light in flat 5 - owners responsibility

    * water leak to shop - insurance

    * why are there bank charges?

    As a leaseholder are you not all responsible for your own properties and insurance policies. Seems odd that a service charge would be made up if the aforementioned repairs but I am no expert.
    • HampshireH
    • By HampshireH 6th Jan 18, 12:59 PM
    • 700 Posts
    • 745 Thanks
    HampshireH
    • #3
    • 6th Jan 18, 12:59 PM
    • #3
    • 6th Jan 18, 12:59 PM
    Also .... If there is lift insurance that too is a lot in maintenance costs.
    • Mickygg
    • By Mickygg 6th Jan 18, 9:19 PM
    • 1,428 Posts
    • 1,174 Thanks
    Mickygg
    • #4
    • 6th Jan 18, 9:19 PM
    • #4
    • 6th Jan 18, 9:19 PM
    I too question the internal flat repairs. Why on earth is everyone Paying for each persons repairs.

    1700 with no sinking fund is not ideal. Whenever there is a big bill you will all be hit. What happens if the roof needs replacing? A huge bill is what that means.
    • Leedsbuyer82
    • By Leedsbuyer82 7th Jan 18, 10:32 AM
    • 5 Posts
    • 0 Thanks
    Leedsbuyer82
    • #5
    • 7th Jan 18, 10:32 AM
    • #5
    • 7th Jan 18, 10:32 AM
    Thanks, all - I did wonder whether this was normal procedure! As soon as I get the subsequent years' statements, I'll check whether these were reimbursed by insurance claims (which is what I'm hoping to see!). Otherwise I'll raise with my solicitor - he hasn't mentioned this as non-standard practice yet.

    Yes, we've been told that the service charge is due to increase by more than 10% due to roof maintenance, so I'm worried about that - they are withholding the cost details until the very last minute, which is worrying! Luckily I'm not in a rush to move, so can still pull out.
    • AdrianC
    • By AdrianC 7th Jan 18, 10:50 AM
    • 17,602 Posts
    • 15,967 Thanks
    AdrianC
    • #6
    • 7th Jan 18, 10:50 AM
    • #6
    • 7th Jan 18, 10:50 AM
    Is it a communal boiler providing water and heating to all flats? If so, then that's the freeholder's responsibility - and if that leaked and caused damage to the flats, so would the repair costs be.
    • AlexMac
    • By AlexMac 7th Jan 18, 11:20 AM
    • 2,043 Posts
    • 1,794 Thanks
    AlexMac
    • #7
    • 7th Jan 18, 11:20 AM
    • #7
    • 7th Jan 18, 11:20 AM
    Its a bit toppy,as I've paid anything from 450-1,400 pa over the five leaseholds I've ever owned, and the top one included a healthy contribution to a sinking fund. But none had lifts and as they were shared freeholds which we managed ourselves, that removed almost half the costs you quote (lift, fees, communal cleaning) so, in that context yours are consistent with my experience. (assuming you are happy to have chosen a nice new flat with lifts and a managing agent; I prefer "shared freeholds" as that gives me more control - but all three of those I've owned were coverions of 100+ year-old buildings)

    The other two (both leasehold flats in small Council freehold blocks with no lifts) have averaged 800-900 p.a but then I tend to get one off bills of 4-5k every few years for cyclical maintenance, external decoration or new windows. So again consistent with your quote?

    I too am puzzled by the cost of repairs after the leak; when that happened in a block where, as Company Treasurer I handled insurances, AVIVA who covered the building coughed up thousands for water damage from above my neighbour's flat, handled all the admin and contracting, and even paid for alternative accomodation/lost rent?
    • davidmcn
    • By davidmcn 7th Jan 18, 11:27 AM
    • 7,837 Posts
    • 8,019 Thanks
    davidmcn
    • #8
    • 7th Jan 18, 11:27 AM
    • #8
    • 7th Jan 18, 11:27 AM
    All the costs being split equally seems a bit odd - is the shop the same size as the flats? Does everyone have equal rights/need to use the lift and stairs? Might suit you but I can see scope for future arguments.
    • eddddy
    • By eddddy 7th Jan 18, 6:37 PM
    • 6,488 Posts
    • 6,377 Thanks
    eddddy
    • #9
    • 7th Jan 18, 6:37 PM
    • #9
    • 7th Jan 18, 6:37 PM
    You need to read the lease. It will tell you what the freeholder is responsible for maintaining and repairing, and therefore what costs will be recharged to the leaseholders.

    The lease will also specify how costs are split between each leaseholder and the shop.

    (You may think the split is unfair and/or the costs are unfair, but you won't be able to change them, if that's what the lease says. All you can do is walk away and not buy the flat.)
    • Leedsbuyer82
    • By Leedsbuyer82 16th Jan 18, 9:25 AM
    • 5 Posts
    • 0 Thanks
    Leedsbuyer82
    Thanks everyone.

    No - no communal boiler, so it looks like everyone has coughed up for the repairs and the amounts are split according to the area of the property - so we would pay 8.45% of the total cost. Our solicitor is checking this, however after having requested subsequent service charge accounts / an estimate for 2016/17, the (new) managing agents have said the following:

    "When we took over management in April 2016, we discovered that the previous managing agent left us with unreconciled estate and leaseholder accounts. We are still to this day working through what we inherited and right now, our FD cannot provide accurate estate accounts."

    Which means they've had 19 months to reconcile one year of management accounts, and still they are not available! This worries me...

    Also, some of the 12 flat owners have not paid the service charge but the MA won't give details about how much of a shortfall has been created, how many flat owners have failed to pay, the amount of the arrears involved, etc. The MA have replied as follows:

    "As a matter of process, we are always debt collecting for unpaid service charges. I will come back to you with details when our FD is back".

    Does anyone know whether this a common problem, collecting service charges?

    Cheers, all
    • NeilCr
    • By NeilCr 16th Jan 18, 10:04 AM
    • 1,813 Posts
    • 2,441 Thanks
    NeilCr
    In my experience it depends on the managing agent. Our current management company (we are changing) has a very robust system for collecting service charges and keeps on top of it. Consequently, non payment is very low.

    The previous agent had a slightly more laissez faire attitude and we had more defaulters.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

126Posts Today

1,625Users online

Martin's Twitter
  • RT @LaraLewington: ...and mine suggested I'd achieved a lifelong ambition of being sawn in half by a magician - at our wedding. Wasn't. Don?

  • We are working on it - I think BA has behaved awfully on this. Those flight were no obviously a glitch. It should? https://t.co/8pvtXtUEqi

  • RT @thenicolabryant: Absolutely. We need mental health and financial health as advocated my @MartinSLewis , to be taught in schools. So muc?

  • Follow Martin