Control a rampant Property Management Company or even better replace them altogether?
I own 2 leasehold flats within a block of 27. The building includes a Medical Centre on the ground floor and a Pharmacy on the same site.
In October 2022, the Freeholder appointed a new Property Management Company (PMC). I think at least 3rd agent in a 4-year period!
This Leeds-based property management company were already infamous for its poor performance, with 94% of reviews being 1-star on Trustpilot.
Early signs confirmed my worst fears when they immediately increased the annual Service Charge by 57% and demanded full payment in advance.
Despite the lease dictating Services Charges being payable Monthly in advance. Adding insult to injury, they then started adding reminder notices after 7 days with added fees and increasing late payments charges.
On being challenged by the lease terms, they later didn’t refund any charges but simply deducted them against future service charges.
The latest catalogue of improper conduct includes the following:
They have tried to insist that they have a legislative duty to be solely responsible for informing subtenants of Building Safety Information, especially pertaining to Fire Safety. For which, they want to charge an annual administrative charge of 60.00 to keep subtenants’ contact details on their company information platform.
Whilst I’m sure there is legislation requiring all occupants of the building to be fully informed on all matters regarding safety legislation. I’m not convinced that the managing agent is solely responsible for this duty. They are already threatening to add a £90.00 fee to my account for sending email reminders to add my tenant’s details to their register. I have no objection to doing so, but I object to being charged to do so, as I consider I’m capable of relaying information from the agent to my tenants. Proving their inability to perform the above communication task, they are demanding to do.
This month, they contracted Engineers to carry out work for the Medical centre. To do this, the engineers have installed at least 3 large storage containers and 3 separate sections of security fencing. Several plant machines and large gas cylinders. Numerous large and unsightly pipes appear to have been attached to the exterior of the building, before running across the path and into the drains.
All this outside the only entrance to the residential apartments.
Yet no leaseholder or tenant was informed of these major works, which were organised by the property management company.
On contacting the freeholder’s office, they were initially also unaware of what was going on! Before conceding that, they were aware the works were being done, adding the following explanation. I presume, from their PMC.
We are replacing the boilers. This is ahead of schedule and will be completed by the end of March. There is very little disruption to the Tenants, all work is in the plant room. We do have a temporary facility on-site and plant to be used during the switchover.
I have visited on numerous occasions to carry out contractor checks and feel that there is no impact on the flats, the site has been well managed and all safety considered and adhered to.
Finally we have just received lasts years reconciliation of accounts and a request for an additional payment of £1,020.00. Increasing last years’ service charge to £3,398.46. per apartment. Which may not sound excessive until you realise these are 19 sqm studio apartments in Bradford, not Belgravia.
They have justified this 30% + increase by informing us of the following:
The main reason for the overspending is the communal water supply. Business stream has sent a quarterly invoice which totals approximately 31 times the annual budget which PMC, the freeholder and the broker are currently investigating. Unfortunately, Business Stream has said that this invoice is payable despite this, which has meant that we have had to include the invoice within the year-end reconciliation and this has led to an overspend on the All Units Schedule. We will continue to liaise with the freeholder, the broker and Business Stream and should there be a refund this would be applied in the next year-end reconciliation.
All 27 apartments were purchased on BTL basis and with the service charge now around 75% of the available rent. They are not financially viable and are in negative equity.
So, is there any way of holding the freeholders PMC to account and reducing the Service Charges to a realistic amount?
Robert
Comments
Have Your Say
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
Previous Article
Councils reap £327m from landlord licensing feesNext Article
Will incorrect EPC rating affect my eviction case?
Member Since February 2011 - Comments: 3453 - Articles: 286
9:55 AM, 17th March 2025, About 1 year ago
1. Challenge Legality of Charges and Conduct
Service Charge Increases
Request a breakdown: Under the Landlord and Tenant Act 1985 (s.19), service charges must be reasonable. Demand a full breakdown of costs, particularly the alleged water bill overcharge.
Challenge the reconciliation: They cannot demand retrospective payments unless properly accounted for and justifiable. If the Business Stream invoice was an error, the PMC should have fought it before passing costs to leaseholders.
Check lease terms: If the lease specifies monthly service charge payments, their demand for a lump sum is unenforceable.
Additional Fees & Admin Charges
Unfair tenant registration charge (£60 per year + £90 threat for non-compliance): The Building Safety Act 2022 does place obligations on leaseholders regarding fire safety information, but it does not mandate paying an arbitrary fee to a PMC. Request legal justification in writing.
Late payment penalties & admin fees: If these charges were never in the original lease agreement, they are likely unenforceable.
2. Engage Legal and Regulatory Avenues
First-Tier Tribunal (Property Chamber)
Challenge Unfair Charges: Leaseholders can take the PMC to a tribunal to determine whether charges are reasonable.
Request Inspection of Financial Records: Under the Landlord and Tenant Act 1985, you are entitled to see invoices and contracts related to the service charge.
Complaint to the Redress Scheme
Check if the PMC is registered with The Property Ombudsman (TPO) or The Property Redress Scheme (PRS). If they refuse to engage, you can escalate the case there.
Trading Standards & CMA Complaint
If the PMC is using unfair business practices, you can complain to Trading Standards or the Competition and Markets Authority (CMA).
3. Enforce Freeholder Accountability
The freeholder is ultimately responsible for the PMC’s actions. Given the rapid turnover of agents, they may be aware of mismanagement but unwilling to intervene.
Organize Leaseholders: With all 27 flats owned by investors, collective pressure could persuade the freeholder to replace the PMC.
Right to Manage (RTM) or Enfranchisement: If leaseholders own 50%+ of the flats, you could remove the PMC and take over management.
4. Financial Strategy
Negotiate Fees: If many leaseholders are refusing to pay disputed fees, you may have leverage for a reduction.
Insurance & Utility Audit: Get independent quotes to see if costs are inflated.
Member Since October 2022 - Comments: 403
12:29 PM, 17th March 2025, About 1 year ago
Section 21(1) Landlord and Tenant Act 1985 request to the Landlord to provide summary of costs in accordance with provisions in your lease. Template from LEASE within one month or 6 months from end of account period which ever later.
Section 22 gives right to inspect invoices etc. failure to do so an offence.
Who is identified as the Landlord in your lease?
Is the service charge paid to your Landlord? This may be the reason for failure by landlord to perform their obligations in your lease, a legally binding contract.
If so application to First Tier Property Tribunal under s. 27A LTA 85 and 20C so legal fees not allowable cost to service charge
Member Since October 2013 - Comments: 1630 - Articles: 3
1:05 PM, 17th March 2025, About 1 year ago
I imagine all the landlords are in the same viability boat. We were the same and used RTM to remove our managing agents. Our costs have reduced significantly, and we have control. But we didn’t have any commercial property in the block. You say there is a medical centre and pharmacy on the ground floor. For RTM to be valid, the commercial property must be no more than 25% of the overall floorspace (this may increase to 50% when leasehold reforms go through).
Member Since April 2022 - Comments: 3
7:54 AM, 2nd April 2025, About 1 year ago
Reply to the comment left by Neil Patterson at 17/03/2025 – 09:55
That’s really helpful advice Neil. Although as I’m just one of 15 landlords who own these 27 flats and we all want a solution to this problem.
Do you know of any type of organisation that are experts in this field and might help and represent us collectively. ?
Member Since April 2022 - Comments: 3
4:50 AM, 3rd April 2025, About 1 year ago
Reply to the comment left by NewYorkie at 17/03/2025 – 13:05
That’s useful to know, I’ll check the percentage of residential & comercial area.
Did you use an outside body to set up the RTM ?
Member Since April 2022 - Comments: 3
5:04 AM, 3rd April 2025, About 1 year ago
Reply to the comment left by Kizzie at 17/03/2025 – 12:29
Thank you for that info, which is useful.
The landlord’s company, specialises and owns a large portfolio of other medical facilities and properties.
I suspect he didn’t want the 27 residential apartments, but was forced to take them, when buying the Medical Centre.
As I’m just one of 15 landlords who own these 27 flats and we all want a solution to this problem.
Do you know of any type of organisation or individual who are experts in this field.
Who might provide more specific information and represent us collectively. ?
Member Since October 2022 - Comments: 403
9:42 AM, 3rd April 2025, About 1 year ago
Your leases form the legally binding contracts with your landlord. You paid a premium for long residential leases that is your right to occupy the flats conditional on your compliance with the lease and performance of obligations in the lease by the landlord.
You are leaseholders aka tenants with legal rights under landlord & tenant act and Commonhold and Leasehold Reform act etc.
Your post suggests the appointment of the Managing Agent is for a period of longer than 12 months and if the charge to service charge per tenant is more than £100 pa then a breach of contract if the landlord did not consult under s. 20 LTA 85.
You can apply to FTPT under s. 27A LTA 85
that the service charge is not reasonable but first serve a Section 21(1) LTA 85 on the landlord to inspect the accounts. Template on LEASE website.
Then look for solicitors specialising in Property Law specifically leasehold law