Are stocks of keys a legitimate use of service charge funds?

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    Are stocks of keys a legitimate use of service charge funds?

    Hi all,
    Our managing agent has included a cost in last year's service charge for buying a stock of keys so that future tenants can buy them from the agent instead of the actual supplier.

    I maintain that this is trading and it is an inappropriate use of service charge funds since I have paid for (or at least towards) the cost of the stock but some future leaseholder may get the benefit of the proceeds of the sale of any keys.

    They have also included as costs in this period a duplicated payment they made in error which will be refunded in the next period. Again, I say they should have excluded that cost in this period.

    I've challenged them but they're simply denying they've made any mistakes. I'm so frustrated with them that I'm tempted to go to tribunal but I can't find any records or precedents online that support either position (mine or theirs). Does anyone here have any insight?

    Many thanks,

    IP

    #2
    No experience or knowledge of this but impartial observation. No benefit buying keys from them rather than supplier other than profit for them. As you say, trading. Should put double charge right asap.

    Comment


      #3
      I doubt that there is anything in your lease that would require you to contribute to the cost of this - but you would have to check.

      I would suggest that the cost of keys that are for individual leaseholders/tenants should be met by the leaseholder/tenant who requires the key, even if the keys are for communal areas (e.g. the door to a refuse room, or a gate that provides access to the property).
      This would be an insignificant cost when purchasing a lease, and anyone renting out their flat should allow for the cost of replacement keys in the contract they give their tenants.

      Comment


        #4
        Apart from anything else, if you pay for a 'stock' via the service charge and then have to pay to buy them off the MA you would be paying for the same thing twice.

        Comment


          #5
          Replacement keys for a Banham locks for example are not able to be cut anywhere, this is of course part of their security measures.

          It makes it easier for the managing agent if they have a few spare keys in stock and provided when keys are sold to the residents the money is credited back to the service charge account then I think that is acceptable. It may not be the correct interpretation of the lease but some latitude has to be afforded when dealing with problems that arise in the real world where the sums are very modest.




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