Management charges on major works

by Readers Question

9:30 AM, 23rd December 2015
About 3 years ago

Management charges on major works

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Management charges on major works

Our block is currently being prepared for major works, the first since it was developed in 2002 (of course it should have been done every 7 years but due to a major fall out between leaseholders and freeholder/management the leaseholders refused to fund it – previous funds had been used for repairs that would benefit the retail units on the ground floor which are in the hands of family of the freeholder/management).fee

We are now raising funds again and have everything in place to start work – the management say that they are entitled to 10% of the cost of these works – £500,000. We cannot find anything in our leases that state this and the management say that it is inline with common practice. We have employed surveyors and quantity surveyors to cost the works prior to tender and the chair of the resident committee has found the contractor and been very involved with this – the management are sitting back and collecting percentages.

Is this correct? Does anyone have any experience of this – as the work has been done and paid for by other professionals I cannot see how the management can justify skimming off yet more money?

Elizabeth



Comments

tracey bowles

10:27 AM, 23rd December 2015
About 3 years ago

We own an ex-authority flat in a small block and major repairs are also due on the externals of the block.
The council are going to add a 15% management charge on to the cost of these works - sounds like you are getting it cheap!

Harlequin Garden

11:08 AM, 23rd December 2015
About 3 years ago

Is this in your lease?

S.E. Landlord

11:44 AM, 23rd December 2015
About 3 years ago

Ask for a copy of the management agreement.

If not happy with the management company or freeholder you could apply to self manage or possibly buy the freehold.

I suggest you contact The Leasehold Advisory Service who will be able to advise further.

Harlequin Garden

11:57 AM, 23rd December 2015
About 3 years ago

Thanks, we have asked but told that it is in our leases (it is not) and 'common practice' - clearly we have to get this sorted before the works can commence. We do have a Right to Manage but reluctant to put this in place as many leaseholders rent out and this will fall to just a couple of us interested - as it is now. Freehold purchase is too late now. Thanks for the help - I'll have them direct us to this agreement they say they have with us!

S.E. Landlord

12:08 PM, 23rd December 2015
About 3 years ago

See if you can appoint your own managing agents.

I would expect to pay a fixed amount per flat for routine management and for major works to be outside this where you could either appoint the same agents to prepare specs and oversee works or appoint external surveyors for this. For works of this size I would expect to negotiate on fee levels with surveyor company preparing specs and overseeing works.

I would want to be a signatory on any bank account that was holding the level of funds that you are referring to.


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