Increased service charge when let/unoccupied

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • eshroom
    replied
    ram,

    Thank you. Interesting. I don't agree, of course, but I do think we can agree some things it would make more sense to split equally. Maintenance costs are generally proportional to the size of a building, and as these tend to make up the biggest part of a service charge, it makes sense they should be allocated based on floor area of people's flats. Insurance is often done on number of flats and make-up of building so perhaps it would make sense to split that equally, same goes for administrative costs.

    One of the properties on the freehold is a house with a garden, so they have a particularly strong case to object to the service charge if they feel their house has low maintenance costs.

    I was the freeholder of a small building comprising two flats. I also owned the top floor flat. I extended and added another floor on top. On completion fo the extension, I voluntarily went from paying 50% of the service charge (which was just building insurance and any maintenance going forward) to paying 66%. I think the downstairs neighbour was pleased. The lease was quite vague on the point (of course).

    Leave a comment:


  • ram
    replied
    Empty Flat. P.S. to post number 12.

    You will be obliged to have the flat inspected every 14 days while unoccupied.
    This will normally be a buildings insurance stipulation ( a copy is with the owner of the flat, of course, isn't it ? ).

    Usually, the insurance companies also need to be told if the property will be vacant for more then 14 or 30 days ( see the insurance documents.

    You will also have to keep a record ( a just in case a future claim is made ) of every visit, what was inspected ( inspect as per your typewritten inspection list. ).
    Some insist the water is drained from the heating system and the water cut off from a stopcock.

    Legionnaires Disease.
    thrive at temperatures between 20 - 45°C if the conditions are right. And we have had nearly 2 weeks of hot weather and stagnant water in unoccupied flats.
    see https://envirochem.co.uk/publication...sease-for.html
    https://envirochem.co.uk/publication...sease-for.html

    The checks include for water ingress, and anything that would normally be noticed by residents.

    I have had to insist flats be inspected every two weeks. And when I found out they had not been checking, I gained access, and charged them £ 40 per visit, for 3 months. ( owners were abroad, but selling the flat )
    There was no court order. If leaseholders are assholes, and put the rest of the building in danger, I rectify that danger and will defend my actions in court if required ( If I am taken to court ).
    There was a history of that leaseholder ignoring the lease, and could not give a dam about anyone.



    Leave a comment:


  • ram
    replied
    Originally posted by eshroom View Post
    What are your thoughts on my second concern in a post lower down? Given the wording of the lease, should I object to the way service charge is calculated?
    I can't add much more to the information already in this thread.

    Me, ""reasonable proportion" would be for example, 4 flats, and all pay 25% of outgoings.
    Why ?
    Because "normally"
    • The roof keeps everyone dry.
    • The common garden, and shrubs, bushes, flowers, trees belong to everyone:
    • The driveway is for everyone to walk over, drive over.
    • The boundary walls are for everyone.
    • The underground drains serve everyone.
    • The buildings insurance is for the whole freehold ground and building, drive, walls, trees etc etc.
    • The accountant fees are for the whole freehold grounds and building.
    • A lift: even if you live on the ground floor, it is normal to contribute to "The building running costs", even if you don't use the lift.
    • If you don't use the communal garden, you still have to pay for its upkeep.
    • Repairs to the actual building exterior helps the building from eventually falling down, over time, even if the repairs are not on your side of the building.

    How far do people want to cut their service charges ?

    Seems it is now becoming,
    • ** Well, the re-pointing was on the other side and only on flat 1 and 3's side, therefore it is not reasonable for flat 2 and 4 to pay for that, and 2 + 4 should not pay, they say.
    • And the list and stupid thoughts continue to grow ( ** ).

    I building, one service charge split between the number of flats.
    There will be exceptions, but in the lease it must be.




    Leave a comment:


  • eshroom
    replied
    Thanks Ram, we will certainly query it. What are your thoughts on my second concern in a post lower down? Given the wording of the lease, should I object to the way service charge is calculated?

    Leave a comment:


  • ram
    replied
    Originally posted by eshroom View Post
    The service charge was £20 per month more for her as it was rented
    You should not be paying £ 240 per year to anyone for the ability to let a flat.
    Max is about £ 48 to get copies of the a.s.t. and subsequent admin work which is over and above looking after leaseholder, and THEN only once per tenant. NOT once per year.

    Tell them above, and you therefore are in credit in your payments.


    Leave a comment:


  • scot22
    replied
    Yes, I follow your logic. On what criteria is the tax decided ? Could this be considered significant in deciding service charge ?
    Not disagreeing but trying to consider different perspectives.

    Leave a comment:


  • eshroom
    replied
    Originally posted by scot22 View Post
    Ours is decided by what was council tax. If it says that, that's it.
    Yes, some leases mandate service charge is split like that, but our lease says service charges should be split according to a "reasonable proportion" decided by managing agent or accountant in case of dispute.

    I'd argue council tax band does not constitute a reasonable proportion, when my flat is less than half the size and less than half the value of the next flat up, which only pays 25% more than me.

    Leave a comment:


  • scot22
    replied
    Ours is decided by what was council tax. If it says that, that's it.

    Leave a comment:


  • eshroom
    replied
    Thanks for the replies. There is one more issue with the service charge. They have decided to split it based on council tax band. This is pretty unfair to us as our flat is approximately 35m2, while the other flats range from 70-110m2. Yet we pay 6.6% and they all pay 9%. Council tax bands also do not correlate to market value either, with the other flats being worth over twice ours, on average. Do we have any case to get this changed, given the lease says charges should be split according to a "reasonable proportion" decided by managing agent or accountant in case of dispute.

    I spoke to the managing agent who says the apportionment is fair.

    Leave a comment:


  • leaseholder64
    replied
    Leases often have clauses about not causing additional expenditure, particularly for insurance, so it might be possible to charge as administration charges, as well.

    Leave a comment:


  • Macromia
    replied
    Originally posted by eshroom View Post
    The lease does indeed say charges should be split according to a "reasonable proportion" decided by managing agent or accountant in case of dispute.
    Unless the lease makes it clear that this "reasonable proportion" only applies to the service charges as a whole, it could be argued that flats with non-resident leaseholders could be charged a higher proportion of the managing agents fees - but only if they can justify this as reasonable, which would mean demonstrating that it actually meant more of the agents time was taken up dealing with these properties.
    Insurance premiums for a block might also be higher if there are sublet, or empty, properties, so it might be considered reasonable to split any additional premium between all non-resident leaseholders.

    Originally posted by eshroom View Post
    It does allow for a "reasonable fee to compensate time spent" for each sub-lease that has to be sent to the freeholder. But the implication is a one-off fee for each time I rent the flat - something I have come across before, although don't really understand why it is needed.
    This should be a one off fee, and would be to cover the managing agents time for additional administration related to the sublet. This shouldn't require a large fee, but managing agents do need to be aware that they will need to send communications relating to the property to a different address if they are intended for the leaseholder, and they may need to have details of the sublet on file for insurance and/or health and safety reasons.

    You need to ask the managing agents to explain exactly what this additional monthly charge is supposed to cover, and how the amount has been calculated (compare this to annual service charge account summaries if you have them - and request them if you don't have them).

    Once you know how they are trying to justify the charge you will likely have a better idea of whether you are likely to be able to successfully argue that the charges are unreasonably high (or even not allowable at all).

    Leave a comment:


  • eshroom
    replied
    The lease does indeed say charges should be split according to a "reasonable proportion" decided by managing agent or accountant in case of dispute.

    It does allow for a "reasonable fee to compensate time spent" for each sub-lease that has to be sent to the freeholder. But the implication is a one-off fee for each time I rent the flat - something I have come across before, although don't really understand why it is needed.

    Leave a comment:


  • Macromia
    replied
    If the lease doesn't allow non-resident leaseholders to be charged any additional fees, then this should definitely be contested.

    What exactly does the lease say about how service charges are split? If there is no specific mention of additional fees in the lease, it might still be possible for the freeholder to argue that this additional amount is reasonable if the managing agent can successfully argue that it costs that much extra in staff time etc., to deal with non-resident leaseholders AND the lease allows the service charges to be split by "reasonable proportion" (or some sort of similar wording).
    I really can't see how it could be argued that it costs an addition £240 per year to deal with each non-resident leaseholder though. Non-resident leaseholders should be receiving exactly the same communications as resident leaseholders, and should be told that passing anything that residents need to know on is their responsibility - so there is no need for the managing agents to be sending out two copies of any communications.

    If you do decide that you need to take this to a tribunal, claim for past years as well (you can go at least 6 years back), and it might also be worth looking critically at other charges and, if relevant, considering contesting them as well.

    Leave a comment:


  • eshroom
    started a topic Increased service charge when let/unoccupied

    Increased service charge when let/unoccupied

    My mum has had her flat let out for some time, it is currently unoccupied and given COVID shall remain so for a few months.

    The service charge was £20 per month more for her as it was rented. She wasn't happy but went along with it. She asked to have it dropped now that it is not rented and got a response saying the fee applied to all non-owner occupied properties.

    I have heard of a one-off fee for management companies (not freeholders, unless they are acting as management too) for rentals to cover admin fees. But not a monthly increase of service charge. There is nothing in the lease to allow for increased service charge due to renting or non-owner occupying.

    Should she challenge this fee?

Latest Activity

Collapse

Working...
X