management and maintenance costs for parking court

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    management and maintenance costs for parking court

    sorry this may in the wrong forum but I could not see a forum title which was relevant
    my wife and I own (leasehold) two flats in a block of 3 flats
    each of the 3 flats has two parking spaces in a 30 space parking court
    in 2018, we became the RTM for the building but the parking court remained with the original management company
    the freeholder for the building and the parking court remains the original developer
    the lease state that each flat is responsible for paying 2/30th of the costs arising from the parking court
    are we also responsible for the huge management fees that the management company is charging?
    we feel that we should only pay maintenance not management
    thanks

    #2
    What does your lease say?
    What the lease says is what you do.

    I doubt the lease and RTM order say that they can charge a massive fee for managing the car park.

    Comment


      #3
      Thanks for your help

      There are a number of references to the 'parking court' in the 38 page lease
      On page 8, in 'Particulars', the lease states under 'Service Charge Proportions' :
      '2/30ths of the Annual Maintenance Provision attributable to the Parking Court for the Parking Court Services set out in Part III of the Fifth Schedule'
      for details see below

      Part Ill
      Services attributable to the Parking Court

      Repair and maintenance

      1. As often as may in the opinion of the Company be necessary to repair and maintain the surface of the Parking Court and to keep the same properly swept and cleaned

      Lighting of the Parking Court

      2. To keep the Parking Court adequately lighted and supplied with electricity

      Risk Assessment

      3. To carry out periodic risk assessments of the Parking Court in accordance with good
      etate management practice

      Other services and expenses
      4. To provide and supply such other services for the benefit of the Lessee and the other
      lessees of parking spaces in the Parking Court and to carry out such other repairs and improvement works and additions thereto and to defray such other costs as the Lessor shall consider necessary or otherwise desirable in the general interest of the lessees of those parking spaces

      The bulk of our annual £400 charge for the two spaces that we own is not for maintenace but for management fees which we do not tink is reasonable

      Comment


        #4
        And what is the total management fee compared to before RTM?

        Why did the RTM not include all aspects under the lease?

        Comment


          #5
          Whoever is managing the car park should be able to charge a reasonable management fee for their services - so it depends how much the reasonable management costs for a 30 space car park are
          Personally, I don't see how annual management costs can be more than the cost of a staff member visiting twice a year (say half a days wages each time, and a maximum of 3 days wages for sending out bills and arranging maintenance work - so £1600 per year at most for 32 hours work, even if the employee earns £50 per hour!).

          2/30ths would be a little over £100 per year, and even that is likely to be excessive, so if you are being charged £400 annually, and the bulk of that really isn't for maintenance work, I would say that the charges are unreasonable.

          Comment


            #6
            The fees charged to us for the parking court have risen slightly in the last few years and there was no reduction when we took over the management of the building.
            The management of the parking court remained with the original management company even though the management of the building itself changed to our RTM Company.
            I think this may have something to do with the Tri-Partite agreement set up by the developer when the estate was built.
            I suppose someone had to take responsibility for the entire parking court even if the management of the building(s) changed
            latest figures as of July 2020 (entire parking court)
            Insurance - Terrorism £5.00
            Insurance - Estates £255.00
            Electricity £20.00
            Grounds Maintenance £475.00
            General Maintenance £250.00
            Contribution to Reserves £675.00
            Management fees £3989.00
            Accounts Preparation fees £593.00
            Audit fees £130.00
            Total £6392.00 2/30th 6.66% = £426.14

            your further comments would be welcomed

            Comment


              #7
              Without knowing what your "parking court" is like, I would think that all of the charges that you list would likely be considered reasonable - apart from the management fees (personally I would consider the accountancy/audit charges to be of no value whatsoever to leaseholders, and therefore unreasonable, but so called 'best practice' would mean that these are considered 'reasonable').

              If I was you, I would ask how the management fees are justified, i.e. what it is that the management company is actually doing for this money.
              If the parking court is nothing more than an open tarmac area, with walls/hedges, a few lights, and perhaps gates and a few trees/shrubs, there is very little management that will be required - which is reflected in the low maintenance costs (the reserve fund presumably being to cover the bulk of the cost of resurfacing when eventually needed).

              Although tribunals will consider it reasonable for management fees to be high enough to cover staff wages (including the contributions and pension costs paid by the employer), stationary, postage, and other office costs (including a contribution towards the cost of renting office space), as well as allowing a profit to be made, I really can't see how 'management' costs of over five times the cost of the actual maintenance work can be justified.
              £1000 per year for management fees would be reasonable, in my opinion. £2000 per year would be generous.

              Comment


                #8
                thanks
                this is very useful
                the parking court is very much as you describe
                maintenance seems to be minimal
                i'll get back to the management company and begin negotiations

                Comment

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