How are management fees worked out?

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    How are management fees worked out?

    Hello, I was wondering how your management fees are worked out as some seem to be a unit price per flat - is this a RICS requirement? or they are paid in apportionment to the Lease percentages? Its seems a mixed bag?

    Based on market forces. The RICS guidelines advise, but don't require flat fees, although most agents seem to use flat flees to cover basic administration, regular maintenance and small repairs, and charge a percentage on larger works.


      Yes, sadly managing agent fees aren't regulated so, they can charge you whatever they want and/or can get away with. That said, managing agents are required to join a property redress scheme which somewhat makes managing agents being regulated.


        My new MA have just sent me a service charge demand with £30 bank charges. It is a fee for them having a separate “client trust account” for the property. Because interest is earned and passed on the bank charges for the banking facility which charges are passed to us via the maintenance account. Anyone had this fee before?



          Sounds like a bit of crookery. Unless the bank actually charge this as a banking fee.


            Ask the freeholder to justify the fees being charged by their managing agent.

            There should be a contract between the freeholder and their agent and this should set out fees charged which should be as set out in your lease.



              Thanks for that, I am still confused as the FTT tribunals often state that the fees should be fixed per flat?



                Thanks Tipper, they wont let me see the contracts so I have no idea what has been discussed...



                  The ARHM have stated the following: The management fee should be calculated on an average cost per unit for the development in question. The per unit cost should then be multiplied by the number of units and added to the total annual service charge. The total annual charge should then be apportioned in line with the lease requirements.

                  Costs should be fair, reasonable and comparable. Management Fees can be challenged at a First-Tier Tribunal.

                  Management Fee Caps for Registered Providers

                  Registered Providers are subject to a management fee cap for retirement housing built using public subsidy.

                  Whilst management fees should still reflect actual costs, as outlined above these must not exceed the figure published annually by Homes England.


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