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  • FIRST POST
    • Anntbs1
    • By Anntbs1 14th Mar 18, 5:16 PM
    • 2Posts
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    Anntbs1
    What are reasonable management fees?
    • #1
    • 14th Mar 18, 5:16 PM
    What are reasonable management fees? 14th Mar 18 at 5:16 PM
    I have a property which I have managed for many years. I moved the management to a local company last year but that have had difficulties with the residential leasehold tenant (won't agree budgets, won't pay and won't allow access) and now they have decided not to renew the contract. I want to resend the service charge budget to the tenant but want to include a management fee 1. so that he accepts that it should be paid (it is in the lease) and 2. so that when I find another management company he doesn't complain about having to pay it in the future.
    The lease just states a "reasonable" amount - anybody any idea what is reasonable for a two bedroom maisonette in a city centre location.
    Hopefully somebody out there can advise!
Page 1
    • eddddy
    • By eddddy 14th Mar 18, 5:37 PM
    • 6,483 Posts
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    eddddy
    • #2
    • 14th Mar 18, 5:37 PM
    • #2
    • 14th Mar 18, 5:37 PM
    So just to clarify -
    • you own the freehold of a building?
    • I'm guessing from your post that the building comprises of 2 maisonettes - you own the lease on one, and somebody else owns the lease on the other one.
    • And you're asking what a reasonable management fee is for the building - of which you would pay 50% and the other leaseholder would pay the other 50%.

    If that's all correct...

    The easiest way to find out what a reasonable management fee would be is to get quotes from management companies - maybe 2 or 3 of them.

    You already have a price from the company you used last year, so that's a start.
    Last edited by eddddy; 14-03-2018 at 5:53 PM.
    • Anntbs1
    • By Anntbs1 15th Mar 18, 10:06 AM
    • 2 Posts
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    Anntbs1
    • #3
    • 15th Mar 18, 10:06 AM
    • #3
    • 15th Mar 18, 10:06 AM
    Thank you for your reply. To clarify
    I am the freeholder. I occupy one floor for commercial use, two floors are leased for commercial use and two floors are a single maisonette.
    The management company I used last week have had so many difficulties dealing with the residential tenant they have decided not to renew the contract. The tenant argues every point so the service budget for the year beginning Sept 2017 has not been agreed and no payments have been made on account. The tenant was unhappy about the management fees and was not happy with the company's explanation. He is hardly going to be happy about paying them to the landlord. I am trying to find another company to take it on but it's difficult with outstanding debts and the problems this year so far. I want to include a fee in my accounting but struggling to find what would be reasonable and that I feel I can justify.
    • eddddy
    • By eddddy 15th Mar 18, 12:51 PM
    • 6,483 Posts
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    eddddy
    • #4
    • 15th Mar 18, 12:51 PM
    • #4
    • 15th Mar 18, 12:51 PM
    OK... so like I say, a 'reasonable' fee would be whatever other management companies would charge.

    If the leaseholder takes you to a tribunal claiming that the management fee is unreasonable....

    ... I don't think the tribunal would be very impressed if you said the fee was based on peoples opinions on an anonymous internet forum.

    Saying that you got 3 quotes from management companies, and took the average would be more compelling.

    Or even saying that you just charged the same as the management company you had last year might be OK.


    There's quite a few legal things you'll have to get right, to ensure that the leaseholder has to pay up. Especially if the leaseholder is looking for 'technical errors' as excuses not to pay you.
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