The difficulty with comparing service charge costs between individual blocks of flats can be explained by considering in a number of factors. The technique of calculation can differ for every block consistent with any variance in leasehold arrangements. The property size, type, height, condition, age, service facilities, plant, lifts, equipment and lease particulars can all have a significant affect on the maintenance and running costs. In addition, the maintenance and repairs history and sinking fund provision may also vary considerably making comparisons from the level of freehold service charges extremely difficult. Not simply will the freehold property and its condition be unique, however the property services necessary in managing and maintaining your building can be quite different along with the requirements of the property lease.
In summary you should not compare apples with oranges and in many cases you’ll probably find good reasons for just about any two landlord service charges being different. Here are some possible explanations which can be applicable in comparing one typical block management scenario with another.
(i) You might have a far more comprehensive group of services funded through your fee (e.g. site manager or porter, all windows cleaned, lifts, auto parking, entry systems etc.).
(ii) Does your neighbour’s fee include sinking funds to allow for future repairs and maintenance? Otherwise, their charge is likely to fluctuate dramatically from year upon year as large expenditure falls due. Large items may well be charged for separately whenever they arise being additional to the regular landlord service charge.
(iii) How many individual flats have been in the neighbouring building? Smaller blocks of flats with less units generally have a greater maintenance charge per unit. Overall maintenance costs are often disproportionately more expensive where the price is shared by fewer lessees. If service charges are spread across a lot of flats it follows the proportion for every leaseholder is going to be less. For instance, a roof repair provided for only 6 flats is pricey when compared to same facility provided for 32.
(iv) Have you got extensive gardens or perhaps is your block an older building? If so, your merchandise charge could be adversely affected. The presence of asbestos for instance can have a dramatic effect on the costs associated with a works being carried out.
(v) What size is the apartment? The method of service charge calculation should be produced in the property lease. It might be apportioned by reference to the ground area of your apartment. Should you own a 2 bedroom apartment and your friend owns a studio apartment then this can make a significant difference. Some leases simply share every cost equally and this can clearly affect the portion payable quite significantly in one block to another.
(vi) The place and access arrangements to carry out works may also have an impact on fee. Where service contractors cannot erect scaffold, or execute their works in a cost effective manner additional time and charges will result. Problems with materials deliveries, parking, craneage, disposal of rubbish etc will all have an affect whereas simple standard procedures without any special requirements won’t attract a premium.
Having checked your lease and the other matters described above, you might still consider you are being overcharged. Like a long suffering leaseholder there are a number of possibilities. Have you considered asking your landlord to train on a professionally qualified property managing agent. Should you insist that a firm is appointed which is Regulated by RICS (The Royal Institution of Chartered Surveyors) the service standards they must try to are positioned out in the RICS Code. This Code serves to protect clients from unscrupulous practices and in addition requires auditing and protection measures they fit in place being subject to regular inspection by the institution.
Other options may also be open to disgruntled leaseholders including trying out their Right to Manage or indeed Enfranchisement in which the freehold can be purchased with a majority of the lessees. However these alternatives are not always possible and may take time requiring the co-operation of others to initiate. Whatever option would be found, I trust that the above will serve like a useful reason for reference to help those who may be subject to overcharging.
It’s of course prudent to check out the above mentioned matters either before or during the time of investing in a leasehold property in a block of flats. Generally the management and maintenance costs will tend to be reflected within the service charge associated with a property over a period of years. A conveyancing solicitor should request this information within their investigation and search with the freehold block management agent.
I have further explored this subject inside a separate article entitled ‘Service Charges Excessive? How Can Leaseholders Start Challenging Them?’ that we trust will help.
Additional fee advice and support might be from a good block management agent providing residential freehold property services for blocks of flats. Readers are encouraged to look for block management agent services that are benchmarked to the quality standards set out through the Royal Institution of Chartered Surveyors (RICS). These professional practices or management agents benchmark their property services to the RICS Service Charges Residential Management Code. which was authorized by the housing minister last year. RICS Chartered Surveyors which are ‘Regulated by RICS’ must adhere to this code that is rigorously enforced by the RICS which performs regular inspections of the member firms. Regulation also secures many other benefits for freehold management companies, landlords and leaseholders. Service charge monies must be safely managed inside a secure ring fenced client banking account with funds being insured and susceptible to regular checking and bank reconciliation. In addition the help provided must reach the required standards Typical block management agent duties are covered under the RICS Service Charge Code which may usually include some of the following:-
Effective Procedures for Property Maintenance and Repairs, Answering Leaseholder Enquiries from Solicitors on Property Sales, All Aspects and services information Charges and Financial Control involving Expenditure, Budgeting, Service Charge & Ground Rent Collection and Accounting, Regular Client Reporting to Freehold Management Companies, Residents, Lessees, RTM’s or Landlords. Independent Lease Management Control and Compliance Procedures in Upholding the Covenants from the Property Lease, Company Secretary Services in aiding Freehold, RTM and Property Management Companies with Essential Management Company Administration.
Residential Freehold Management and Maintenance Services for Blocks of Flats
VFM’s property management services are benchmarked towards the quality standards put down through the Royal Institution of Chartered Surveyors (RICS).
Property Management, Maintenance and Repairs
- Solicitors Lease Enquiries
- Building Repairs & Maintenance – Service Contracts – Servuce Charge Financial Control
- Expenditure
- Budgeting
- Service Charge & Ground Rent Collection
- Fee Accounts
- Client Reporting
- Lease Management & Compliance
- Company Secretary Services
Contact VFM Property Management Chartered Surveyors, Property and Development Consultants Tel 020 8658 6824 Fax 0871 990 2366.
Residential Freehold Property Services for Blocks of Flats throughout London and also the East
For further information and advice concerning the management of residential freeholds or other property matters contact us or visit our website by clicking Lease Management. VFM provides block managing agent house services for freeholds, landlords, leaseholders and residential management companies including service charges, building maintenance and lease management
With regards to maintaining and ensuring the graceful running of freeholds for blocks of flats, few situations are more essential than securing the services of an expert block management agent. VFM Property Management is delighted to be considered among the UK’s top suppliers of block management services for landlords and freehold management companies. Having its insightful experience, VFM has the capacity to deliver property services solutions for problems that might arise facilitating more efficient leaseholder procedures. VFM’s property services have proven immensely popular with time pressed landlords. directors and leaseholders of freehold management companies.