Management Fees

  • Filter
  • Time
  • Show
Clear All
new posts

    Management Fees


    I'm a leaseholder in a block of flats and our freehold was recently sold to another company (after being offered first to all the leaseholders). This new company has recently sent out their first invoice for service charges. The service charges are broken down into 2 components. A management fee and the actual costs of the services themselves. By and large the service charges are exactly what they were before (they have just continued using the same services/charges as the previous freeholder - insurance, etc.). However their Management Fee is significantly higher than the previous freeholder - it's effectively a 1000% increase.

    We've spoken to them about this increase and their justification is that it's their standard charge and is because of new legislation adding more onerous conditions they have to meet. They couldn't/didn't explain why the previous freeholder was able to charge a lot less (and presumably also needed to meet these new conditions).

    Do we have any recourse to get these management fees reduced? What is considered fair management fees (We have a fairly low maintenance building)?


    As a starting point, say £ 120 per year per flat.

    if the previous freeholder did it "in house" without a Managing agent,
    then 1000% increase could be right.

    I know I only break even at £ 120 per flat per year.



      My biggest client's man fees are set at £150-£170 per unit


        LVT's have the power to decide if a management fee is 'reasonable' or not, this would depend on the amount of work done, the property and the local area, my local LVT often concludes that a managemnet fee of £150-200 is reasonable, above that they may concklude it should be reduced.

        Have a look through previous LVT decisions and especially ones involving your MA, your locality, similar properties, etc. >

        I would of thought a 1000% increase would be a bit much !

        There may be 'new' conditions to meet regarding haelth & safety, etc..especially in a large block but most of this cost would normally be seperated out and shown in the service charge (i.e £1000 Asbestos survey) and not added to the management fee.

        Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

        I do not accept any liability to you in relation to the advice given.

        It is always recommended you seek further advice from a solicitor or legal expert.

        Always read your lease first, it is the legally binding contract between leaseholder and freeholder.


          Fair point by andydd - does the lease even allow for the fees to be recovered?? This could have been missed if the previous agent's dealt with in house.


            Originally posted by dant View Post
            Fair point by andydd - does the lease even allow for the fees to be recovered?? This could have been missed if the previous agent's dealt with in house.
            the other issue is if the contract is for more than 12 months then it may be subject to consultation.

            Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.


            Latest Activity


            • Reply to Recurrent leaks from flat upstairs
              by JK0
              Do you have insurance for the contents? Maybe there is loss of rent cover included there.
              18-05-2022, 06:11 AM
            • Recurrent leaks from flat upstairs
              by Ldawg
              The flat I rent out has suffered from recurrent leaks from upstairs since I purchased it, 4 leaks in 4 years. It's caused me to lose one tenant already. I feel like there is no incentive for the owner upstairs to sort the problem (check the plumbing etc) as the cost is always covered by insurance and...
              24-01-2022, 19:48 PM
            • Reply to RTM director service charge arrears
              by fos333
              This is the important question, what are the reasons for non payment?

              Have demands been correctly served including the correct summaries of rights and obligations?

              Are the landlord obligations under the lease being carried out?

              Have service charge end of year accounts...
              17-05-2022, 21:48 PM
            • RTM director service charge arrears
              by ARG
              Hello, I am new here so please excuse me if this question has already been asked, but a search has drawn a blank.

              I am a director of an RTM of a property with 25 flats. I would be very grateful if anyone here can advise whether a resident who is more than six months in arrears with his...
              17-05-2022, 15:38 PM
            • Reply to Neighbour Dispute over Bins
              by vmart
              Is there a restrictive covenant in the title of the commercial-property owner (CPO) giving you and the other lessee a right of way over the land?

              Is the CPO a freeholder or leaseholder of the land?

              With regard to the point related to '20 years' you are referring to adverse...
              17-05-2022, 21:06 PM
            • Neighbour Dispute over Bins
              by Tony-Edwards

              I could do with some guidance if anyone has any knowledge on this.

              I have a 100 year old flat that was split from a larger building in 2000 and has a 999 year lease, it is next door to a commercial premises.

              The only way to get to my flat is across their...
              17-05-2022, 14:40 PM
            • Reply to RTM director service charge arrears
              by vmart
              The RTM can make a money claim online but as this enquiry concerns service charges the lessee will have the right to have the service charges determined unless already agreed. Depending upon the lessee's response to the claim, the County Court may refer the claim to the FTT.

              What are the...
              17-05-2022, 20:54 PM
            • Reply to Recurrent leaks from flat upstairs
              by Ldawg
              Thanks for your response.

              All costs are being covered by the management company. So currently I'm not actually losing out so I'm not really sure what I'm claiming for! More just the stress of it all. And the potential loss of earning and making unrentable/saleable as you say. Yes the floor...
              17-05-2022, 20:22 PM
            • Reply to Lease Extension - Relativity
              by comm1985
              I for one would appreciate a more stable approach in deriving the premium...

              In this instance what would

              1. The sensible premium be?

              A)£32000 (based on the value the actual short lease was just sold for i.e Relativity 65%)
              B)£20,000 (based on graph...
              17-05-2022, 20:19 PM
            • Lease Extension - Relativity
              by comm1985
              Hoping to get some clarification,

              If a flat (Outside Greater London) with 60 years left is sold for £110,000 and comparable properties with longer leases attain £160,000

              What is the relativity in this case?

              Would it be £110000 less 5.5% (to estimate for no act...
              17-05-2022, 15:12 PM