Agent charging 40%

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    Agent charging 40%

    I bought a freehold flat in a block of four. So far so good. I have received the following from a local firm of Estate & Letting Agents. (Service charge) there is no service.They list the following bearing in mind the flats are well built, local builder, in good state of repair and no work has been done on them in the past year except cutting of two small patches of grass in summer.
    Building insurance £650. Building repairs (completely unspecified) £108 Gardening £230. miscellaneous (totally unspecified) £100 Agents fee £432. My contribution to be £380. I calculate that they have added £208 completely unaccounted for and then given themselves a charge of 40%. Of £432.

    I have not signed anything giving them the right to charge 40% and have forced them to meet me next Wednesday as I want details of what, why and when. I will be saying I refuse to pay until I see what they are charging for here. Does anyone know the procedure for taking action against the agent when behaving in this Dick Turpin manner? Is the PRS the way to go or or Is there a better/ different avenue to pursue. The other residents are single old women, frightened of disputing anything.

    #2
    Just disinstruct them, surely?
    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

    Comment


      #3
      That list of items is the service charge, so it is nonsense to say there is no service charge.

      If this is a an isolated block of four flats, I think I could believe the agent fee. London fees are high, and four flats is really too small for most agents, so their overheads will be high. For 30 flats in outer London, typical quotes are £200 + VAT, and an additional markup on major works, but, with only four flats it is going to be much more.

      The level of detail you are getting is about par for the course for service charge budgets or accounts. After the fact, you can ask to see the actual invoices, from the previous year.

      Comment


        #4
        I have calculated the service charge expenditure for your block of 4 flats as :

        Building insurance = £650
        Building Repairs = £108
        Gardening = £230
        Miscellaneous = £100
        Agents Fee = £432

        Total expenditure = £1520 = £ 380 per flat which is reasonable for one year.

        The agents fee at £432 = £108 management fee per flat is also reasonable ( compared to £200 +VAT for outer London figure reported by L64).

        I don't think you can compare the £432 agent fee to 40% of expenses. The agent's work has to include preparing the service charge budget and collecting the service charge contribution from each flat, and getting quotations from service suppliers, placing the order and giving account of expenditure after the year end ( which is the purpose of your meeting next wednesday ).

        Comment


          #5
          Thanks everyone for your input, this block is one of six, (24 flats) all are together, it’s in the North East. There is little to no competition between Agents, only really two doing it. I will see what happens next Wednesday, Previous to this which I’ve posted about they were simply sending out single pieces of paper to each flat saying pay £X with nil other explanation. I also note there is no sign of their membership of any PRS, either on their paperwork or website, which is mandatory now with separate client account I will be enquiring which they have joined and what their membership number is.

          Comment


            #6
            You say a freehold flat ? Do you mean leasehold ?
            Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

            I do not accept any liability to you in relation to the advice given.

            It is always recommended you seek further advice from a solicitor or legal expert.

            Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

            Comment


              #7
              No freehold, there are a great number of freehold ones in the area.

              Comment


                #8
                Then what is the contractual basis on which you pay the charges ? and to whom ?
                Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                I do not accept any liability to you in relation to the advice given.

                It is always recommended you seek further advice from a solicitor or legal expert.

                Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                Comment


                  #9
                  If you have some form of lease or other agreement you need to read and understand it before your meeting.

                  Comment


                    #10
                    Originally posted by Tipper View Post
                    If you have some form of lease or other agreement you need to read and understand it before your meeting.
                    I agree with this. Whatever the situation is regarding your flat, you need to know exactly what you are contractually obliged to pay for with regards to insurance, maintenance, etc. (if anything).

                    It sounds like some sort of estate charge may apply, which can be the case with some properties, but this would not usually include block insurance or any repairs to individual blocks.
                    If your flat really is freehold, you need to know who is responsible for any repairs/maintenance to your block that is needed, whether or not this is shared by all owners in the block, and if so, who pays what share.

                    If there are no legally binding agreements in place for any of this, you shouldn't need to pay anything - but you will likely have problems selling unless you find a buyer who doesn't use a competent solicitor, or ignores the solicitors advice.

                    Comment

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