Management charge increase

[leighv]

Hi all,

I've just received the management charge for 2009 - and it's increased by nearly 30% (!!) to just under £1000 per year. There are charges such as electricity for the block of 6 flats for £500 per year (there are 7 lights - only 3 of which are on all the time). When I spend under a £1000 on electricity (and I have dishwasher, washing machine, heating, etc), then this is extreme in my view. So is the cleaning bill (£1200 per year for a block of 6 flats). They only spend 5 minutes a week cleaning, and not surprisingly there are still dirty windows, cobwebs, etc, etc.

Anyway - what can I do about these increases. I am sure your answers will create more questions. Do I have to keep on paying the 80 per month until this is sorted? Thanks.

[manumark]

You and me too. If it makes you feel better i am being charged over 1,400 from 850 last year. I had a gardener and cleaner for just under 2,000 PA and they has sacked him and we are now paying over 4k???
I have found out if the freeholder appoints the Man. Co. Then they are the only ones who can dissmiss them. I am sure there is a law and i will look else wherr but for now voice you concerns and get a dialog on working together to get the cost down.

[schocca]

I would ask the managing agents for proof that they have appointed agents (i.e. people doing the work) at a reasonable price. Normally this involves getting several quotes from multiple service providers.

This happens for both blocks that I help run, so I would go back and request this information from your managing agents. They CAN get around this by requesting a service that is only available from one service provider and then state they only got a single response in regards to a quote request (i.e. quote for cleaning, gardening, painting, insurance, etc.. etc... - this can limit dramatically the numbers of service agents who can meet these requirements). So read carefully any response that you get.

Additionally, if enough of you in the block are unhappy with the MA, then RTM the landlord and run it yourself... See the RTM legislation for the relevant details (and the government produces a useful guidebook about this).

[robbyp]

I have had similar problems mine has gone from £960 pa to £1199pa and there are some ridiculess charges on there. what I have done so far is wrote to them asking for the reciept for the works. which I still haven't had a reply nearly a month after sending it. wrote to all the landlord of the other property looking for support. if you get support form the other landlords it will help you in challenging the charge.

I ve also wrote complaining about the fee to watchdog, still awaiting a reply.

speak to the citizens advice they're always willing to help.

the management company isn't CPM by any chance

[leighv]

CPM - depends on what CPM stands for. Do you live in Hounslow?

[robbyp]

not sure, my property is in lincoln nut CPM manage lease's all over the country, check this site out. even if you management company isnt cpm it got some good information on it.

http://www.cpm-asset-management.co.uk/

[Gordon999]

Send a list of your problems to your local MP and ask him/her to forward to the All Party Parliamentary Group looking at Managing Agents.

[Gordon999]

You and me too. If it makes you feel better i am being charged over 1,400 from 850 last year. I had a gardener and cleaner for just under 2,000 PA and they has sacked him and we are now paying over 4k???
I have found out if the freeholder appoints the Man. Co. Then they are the only ones who can dissmiss them. I am sure there is a law and i will look else wherr but for now voice you concerns and get a dialog on working together to get the cost down.

You need to organise a RTM to take the management powers from the freeholder. A jump from 850 to 1400 in annual service charge demand is too much to accept. Who is the managing agent for your block ?

[antonio111]

Send a list of your problems to your local MP and ask him/her to forward to the All Party Parliamentary Group looking at Managing Agents.

Gordon,

could you please tell me a bit more about this parliamentary group as our managing agents dont seem to have done much for the 4 years since the property was built, allowing arrears to accumulate etc.We havent even had a budget, they have just collected the same amount per quarter . they were appointed by the builders originally but is it going to be difficult get someone else to take us on with arrears on the service charges?

Ant

[jeffrey]

Our managing agents dont seem to have done much for the 4 years since the property was built, allowing arrears to accumulate etc.We havent even had a budget, they have just collected the same amount per quarter . they were appointed by the builders originally but is it going to be difficult get someone else to take us on with arrears on the service charges?
Do a LandlordZONE search for RTM (Right To Manage). This should apprise you of how it works.

The existence of arrears should not deter suitable Agents from considering appointment. The only drawbacks of RTM are:
a. the need to incorporate a company complying with detailed statutory requirements [see 2002 Act]; and
b. the fact that the f/r stays owned by L, so the RTM Co. cannot itself threaten forfeiture- it would need to own the f/r if it wanted to do that.

The lessees could instead opt for RTE (Right To Enfranchise) which is similar to RTM but involves buying-out the f/r from L. The statutory requirements (item a above) do not apply to the same extent if RTE is used.

[antonio111]

Do a LandlordZONE search for RTM (Right To Manage). This should apprise you of how it works.

The existence of arrears should not deter suitable Agents from considering appointment. The only drawbacks of RTM are:
a. the need to incorporate a company complying with detailed statutory requirements [see 2002 Act]; and
b. the fact that the f/r stays owned by L, so the RTM Co. cannot itself threaten forfeiture- it would need to own the f/r if it wanted to do that.

The lessees could instead opt for RTE (Right To Enfranchise) which is similar to RTM but involves buying-out the f/r from L. The statutory requirements (item a above) do not apply to the same extent if RTE is used.

Thanks Jeffrey,

I have read up on RTM but in this case I dont see it as an option as the number of appartments is far too great. We just need a managing agent who will actually work for the 28K a year they are charging us.

Ant

[jeffrey]

Yes, but the Agents work for L (whoever L is, from time to time) and not- I fear- for you and the other flats' lessees.

[antonio111]

Have I understood this correctly that we could apply for the Right To Manage and then appoint an agent to do it on our behalf instead of the agent working for the landlord?

Ant

[jeffrey]

Have I understood this correctly that we could apply for the Right To Manage and then appoint an agent to do it on our behalf instead of the agent working for the landlord?
Yes. You do not need all the lessees to join-in. By s.72(1)(c) and s.75, RTM requires that at least two-thirds of the flats be held by qualifying tenants (all entitled to participate) of whom- by s.79(5)- at least half agree to participate and become members of the RTMC.

[antonio111]

Yes. You do not need all the lessees to join-in. By s.72(1)(c) and s.75, RTM requires that at least two-thirds of the flats be held by qualifying tenants (all entitled to participate) of whom- by s.79(5)- at least half agree to participate and become members of the RTMC.

So we would need 34% basically to agree! One of the major problems is a lot of the flats are rented out and most of the arrears are by errant landlords!

3. For a flat which does not want to pay service charge, after the last payment date has past and become "in arrears", you should serve notice on the mortage lender and tell them the flat is not covered by building insurance due to non-payment of service charge and ask the mortgage lender to pay.

I read the above paragraph in another post on here, is it true?

Ant

[jeffrey]

So we would need 34% basically to agree! One of the major problems is a lot of the flats are rented out and most of the arrears are by errant landlords!
Noted, although you'd need just at least 33.333%.


3. For a flat which does not want to pay service charge, after the last payment date has past and become "in arrears", you should serve notice on the mortage lender and tell them the flat is not covered by building insurance due to non-payment of service charge and ask the mortgage lender to pay.

I read the above paragraph in another post on here, is it true?
Sort-of. The property insurance block policy covers all flats, not only those of which the lessee has fully-paid service charge.
The mortgagee should nevertheless be pressed hard for payment in order to avoid itself being dragged into possible proceedings re the debt or even threatened lease forfeiture.

[antonio111]

Thanks for your advice Jeffrey,

It doesnt seem to me that the managing agents are doing a very good job for the landlord either!

[andydd]

Hi all,

I've just received the management charge for 2009 - and it's increased by nearly 30% (!!) to just under £1000 per year. There are charges such as electricity for the block of 6 flats for £500 per year (there are 7 lights - only 3 of which are on all the time). When I spend under a £1000 on electricity (and I have dishwasher, washing machine, heating, etc), then this is extreme in my view. So is the cleaning bill (£1200 per year for a block of 6 flats). They only spend 5 minutes a week cleaning, and not surprisingly there are still dirty windows, cobwebs, etc, etc.

Anyway - what can I do about these increases. I am sure your answers will create more questions. Do I have to keep on paying the 80 per month until this is sorted? Thanks.


You are entitled to inspect the accounts/invoices, etc so I would ask to do this, surely this would explain how much is being paid and to whom, if you feel the amounts are excessive then you can apply to an LVT for them to decide if they are 'unreasonable' or not. Have a look at the Leasehold Advisory Site and also view their list of previous LVT decisions I found it very helpful and my landlord has suddenly gone very quiet since I started querying charges, previoulsy he was sending threatening letters all over the place.

Andy

[thevaliant]

So we would need 34% basically to agree! One of the major problems is a lot of the flats are rented out and most of the arrears are by errant landlords!

Is it still in both there interest and yours that you sort out RTM. It would reduce both your costs and theirs. Presumably, they are being pressed by the landlord as well for payment, unless the landlord is an odd sort who only presses owner-residents?

You could start by knocking on doors. This will take time if it is a large block, but you should be able to:

For owner occupiers, speak to them immediately.
For rented out flats, ask who their agent is (or landlord) and go and see them.

You then set out what you want to do in a letter and seek support. If everyone is being fleeced, you may just get the support you need. Then see a solicitor to get RTM sorted.

[jeffrey]

For rented out flats, ask who their agent is (or landlord) and go and see them.

You then set out what you want to do in a letter and seek support. If everyone is being fleeced, you may just get the support you need. Then see a solicitor to get RTM sorted.
You could also use LR Online, to obtain the leasehold title registers (@ £3 each). These will state name/address of each flat's proprietor.

[leighv]

Maybe I'm wrong, but the initial costs for RTM and RTE are quite high (anybody have any guide prices???). And of course, nobody wants the 'work' that will be created after either of these.

What are the 'rules' of management agents, in terms of number of meetings, what they are allowed to charge, etc, etc?

[thevaliant]

Maybe I'm wrong, but the initial costs for RTM and RTE are quite high (anybody have any guide prices???). And of course, nobody wants the 'work' that will be created after either of these.

What are the 'rules' of management agents, in terms of number of meetings, what they are allowed to charge, etc, etc?

In terms of what? The ones you appoint or the ones at present?

The short answer is none, unless your lease is very detailed about what management can and cannot charge (which is unlikely given the fleecing going on). They charge what they like. If you don't like it, regretably, your only options are RTM, RTE or challenging service charges if the proper notices have not been served.

I agree about RTM and RTE though. It generates work for the residents/owners after completion, which makes living in the flat (for those involved) more a job than a home.

[jeffrey]

I agree about RTM and RTE though. It generates work for the residents/owners after completion, which makes living in the flat (for those involved) more a job than a home.
Yes. The lessees must choose either:
a. to leave things as they are (expensive); or
b. to use RTE/RTM but contract-out the donkeywork to their own contractor/managing agent (perhaps a cheaper option); or
c. to use RTE/RTM and do the donkeywork themselves (cheapest option but more onerous).

In any event, the work needs doing! It's simply a choice of whether DiY is manageable- but don't buy dog then bark oneself!

[thevaliant]

I would agree with Jeffrey. Whilst somewhat off topic, it is a sad state of affairs that with RTE (or even RTM), it appears that you will end up with a small group of volunteers which other owner occupiers 'fleece' in other ways (most noticeably time).

I think Mark Hassel has said it best elsewhere. The problem with all flats is that either you end up paying too much for outsourced management (or get a poor level of service) or else bring it inhouse and then have the satisfaction of knowing that you are looking after other people's property for free/very little reward.

With the increase in flats (certainly in my area) I'm surprised that people aren't waking up to the problems that they pose (or perhaps they are?).

[leighv]

Apologies - my previous post was not clear. The two things I have had push back on were a) the time/hassle of going to the RTM direction, once it was done b) the time/lack of experience and cost of going in that direction.

Does anybody have any time and cost real examples of getting RTE or RTM? I have read websites of organisations that will do this kind of thing - but it seems to be extremely expensive, and I can't imagine any of my fellow landlords in spending that kind of money. But as we have zero experience - then.... Catch 22....

[leighv]

Can anybody help? Thanks.

[Poppy]

Perhaps the reason no one has shared their RTM/RTE experience with you so far is because those members join the forum, ask a couple of questions and then fade away.

Suggest that you search through threads on this forum for any member who mentions that they have exercised their right to manage. You can then encourage that member using the private message facility to post their experience on this thread so that everyone can read it. Does that help?

[thevaliant]

Can anybody help? Thanks.

Technically, we went through RTE back in 2005, but not like what you experienced. The original builder was the freeholder, didn't want to know and had granted 999 year leases with £1 ground rent. The freehold was practically forced upon us because the lease specificed if the management company didn't do it, the freeholder would. And the builder had no intention of ever visiting our flats again in his life, let alone do maintenance on them.

I can comment on what life is like AFTER the process (not much fun for me really) but not on how RTE/RTM works properly were the freeholder might resist (or at least price such purchase) properly.

[leighv]

I guess my questions are:

Where can I find more plain English information -i.e. a dummies guide rather than paying a company thousands of pounds...

&

How much.....

Thanks....

[jeffrey]

Where can I find more plain English information -i.e. a dummies guide rather than paying a company thousands of pounds & how much.
Look at Leasehold Advice Service website: http://www.lease-advice.org

[antonio111]

Send a list of your problems to your local MP and ask him/her to forward to the All Party Parliamentary Group looking at Managing Agents.

Ive written to my MP and he tells me that this group doesnt exist!

Ant

[jeffrey]

Ive written to my MP and he tells me that this group doesnt exist!
Nor do your apostrophes! Is this 'Gordon' the one who lives at 10 D*wn*ng Str**t?

[antonio111]

Nor do your apostrophes!

Is that relevant?

[jeffrey]

Is that relevant?
No, it's just me being pedantic. You'll soon accustom yourself to it!

[antonio111]

I had a letter from passed on from my managing agent telling me that the communal electricity may be cut off due to non payment of the bill so my mind was elsewhere.

Its just really frustrating when they charge so much money but don't seem to give much service.The accounts would not be depleted if the agents had chased up arrears, some outstanding for four years!

I am having a similar bur smaller problem where I live, a problem with the drains, the managing agents and insurers have been supposedly sorting it out since last summer but with no results as yet. As this is only a small complex I am very seriously considering doing it myself, I do most of the work getting estimates in etc already then just tell the agents who to use!

[thevaliant]

I am having a similar bur smaller problem where I live, a problem with the drains, the managing agents and insurers have been supposedly sorting it out since last summer but with no results as yet. As this is only a small complex I am very seriously considering doing it myself, I do most of the work getting estimates in etc already then just tell the agents who to use!

If you are seriously doing this (ie, most of the donkey work) but are STILL using a managing agent then:
Consider getting rid of them and doing it yourself, or farming out to a better agent OR if you don't have RTM for some reason:
STOP doing this! You don't help yourself, merely other lessees for no reward.

[pankajmittal2004]

Is there any benefit after formation of RTM (Right to manage), I don't think so. I live in a block of 16 flats and we voted for formation of RTM last year and formed one but the previous Directors (or rather bunch of crooks) put there name on register immediately without asking to join anyone and they appointed new managing agent themselves for us. Now it's the same old story that Directors and managing agents joined hands and all other residents get no proof of where money is being spent every month. I have written 100 times to managing agents and they say receipts are only issued to Directors of the block and Directors say that speak to managing agents. So I would suggest until you have complete hold don't waste your money in forming RTM. Otherwise you just feel helpless and angry as before.

[thevaliant]

Is there any benefit after formation of RTM (Right to manage), I don't think so. I live in a block of 16 flats and we voted for formation of RTM last year and formed one but the previous Directors (or rather bunch of crooks) put there name on register immediately without asking to join anyone and they appointed new managing agent themselves for us. Now it's the same old story that Directors and managing agents joined hands and all other residents get no proof of where money is being spent every month. I have written 100 times to managing agents and they say receipts are only issued to Directors of the block and Directors say that speak to managing agents. So I would suggest until you have complete hold don't waste your money in forming RTM. Otherwise you just feel helpless and angry as before.

You need to look up your rights properly. I assume you are a shareholder/member? Holding 6.25%. Get two of you together, request a General Meeting. Sack the existing board, appoint better ones.

[antonio111]

If you are seriously doing this (ie, most of the donkey work) but are STILL using a managing agent then:
Consider getting rid of them and doing it yourself, or farming out to a better agent OR if you don't have RTM for some reason:
STOP doing this! You don't help yourself, merely other lessees for no reward.

I realise it is helping other lessees, but the reason I do it is that we get a work done for a reasonable cost rather than the managing agent just using their own sources(friends?) and depleting our resources. I don't intend stopping here forever and want the place in good condition to sell when I am ready to move on.

The idea of doing it myself is on hold at the moment pending a sale going through and the drains being sorted as I am do not intend picking the problem up part way through. Because it is such a small developement, 7 flats, most companies arent interested!