Excessive management fees?

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    Excessive management fees?

    Hello,

    Since buying a leashold property 2 years ago I have been paying, as part of the service charges, a fee to the managing agent for their services. There was a change of managing agent towards the end of the first year. The first agent charged around £35 per month and the second charges around £220 per year.

    Now, I fully agree that a managing agent should be paid a fair fee for the work they do and I can easily image situations/properties where £200 to £400 per year per unit would be reasonable. However, in our case, as far as I can tell, they have done very little work. The only contact we have is when they send service charge bills, when they eventually respond to my occasional query and once when we managed to persuade them to actually visit the property, which was the only visit they had made in many, many years.

    The property is a converted house which contains just 2 flats. There are no contracts in place for cleaning, maintenance, gardening etc., they don’t arrange the insurance (this is done by another company) and the ground rent is paid to yet another company. As far as I can tell they do very little to justify any management fees at all.

    So, I was wondering, is £220 to £420 for doing next to nothing considered reasonable in the world of property management and what would my chances be of successfully challenging this at LVT?

    All comments and opinions are very much appreciated.

    #2
    Does someone (L) other than the two flats' leaseholders own the freehold reversion? If so:
    a. it's L, not the two flats' leaseholders, who appoints the Managing Agents; and
    b. the two flats' leaseholders, both confronted by the same problem, should consider RTM or RTE.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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      #3
      Hi Jeffrey

      Regisport are the freeholders.

      We have very recently successfully acquired the RTM and we have decided that, as we're a very small RTMco. with just 2 flats and 100% leaseholder membership, we'll manage the property ourselves. So, we won’t have any problems with excessive fees in the future. However, it's only through setting up the RTMco. and claiming the RTM that I've begun to think about and seriously question the various fees we've paid over the last few years (it's not just management fees that I think might be excessive) and I’m wondering whether I could challenge and try to reclaim them retrospectively?

      Bearing in mind that we've paid nearly £1400 (for both flats) in management fees over the last 2 years and the amount of service charge fund that has actually been spent on the upkeep and maintenance of the property is £0, would we stand a chance of re-claiming any money via LVT?

      p.s. I also think that we’ve been over charged for insurance and they are trying to charge us for a health and safety inspection which didn’t happen. They want £400 for a property valuation survey, which didn’t happen either (unless it was a drive by!), but I’ll save that lot for another thread/forum.

      Comment


        #4
        Originally posted by jogonchief View Post
        Bearing in mind that we've paid nearly £1400 (for both flats) in management fees over the last 2 years and the amount of service charge fund that has actually been spent on the upkeep and maintenance of the property is £0, would we stand a chance of re-claiming any money via LVT?
        I don't see why not. It also possibly sounds like fraud (obtaining money by decption), a criminal offence.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


          #5
          Thanks Jeffrey. Thats encouraging.

          Comment


            #6
            Check out the Fraud Act 2006 - Section 2 Fraud by Misrepresentation may fit the situation

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