Managing Agents overcharging for nothing?

Managing Agents overcharging for nothing?

16:25 PM, 21st April 2021, About 3 months ago 16

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I own two flats in a small block of four flats. There is a Managing Agent for the Freeholder. They don’t do anything, there is no cleaning of the communal areas, no window cleaning, no gardens to maintain etc.

However, last year they suddenly started to charge ‘Service Charges’ of over £500 per flat. We questioned it, and they said that ‘if there are no maintenance costs over the year, we will give it back.’

The Buildings Insurance Premium is also very high – £2,200 for the building. I manage 3 other Freeholds of a similar size and, shopping around, the insurance cover is less than half that.

Anyway, I paid for it reluctantly last year. I have just got this year’s accounts, and they are asking for similar amounts. I asked to see the Expenditure Account to show what they had spent the money on, but they said their accountant had not yet prepared it. I do not want to pay again and add to the communal pot year-on-year when I can’t see how it will be spent, or how it was used last year.

Also, can I contest the cost of the insurance?

Can I delay payment until I have sight of the accounts?



by Helen

21:15 PM, 24th April 2021, About 3 months ago

Thank you Ian Cognito. I asked them to show me what the service charges related to and they said it is in the accounts which haven't yet been prepared. However, I have not seen the accounts relating to the service charges for the year before, when they started to hike them. They told one of the lessees that if it wasn't spent it would be 'returned.' This was in a telephone conversation and not backed up in writing. Your advice has been helpful.

by Ian Cognito

12:40 PM, 25th April 2021, About 3 months ago

Reply to the comment left by at 24/04/2021 - 21:15
Hi again Helen. Based on what you are saying, this stinks, and in the unlikely event that the managing agent is acting within the terms of the lease, I would be challenging my converyancing solicitor for allowing me to sign.

You say that there are 4 flats of which you own 2. I would want to know who owns the other 2 flats. Have you spoken to the person or persons? Could it be that the freeholder has a direct or indirect interest?

by Puzzler

20:05 PM, 25th April 2021, About 3 months ago

Further to the link above about insurance this will tell you how to get the information you need

by Helen

22:53 PM, 25th April 2021, About 3 months ago

Thank you for the advice Ian Cognito. I know the other two flat owners and they are also indignant. However, they are inexperienced in property matters so are not sure what to do. Also, I am paying double the charges, having two flats. When I bought the flats they were managed by a different company and there were no service charges or management fees at that time, just ground rent and insurance. I know the Freeholder's details. Can I approach them directly and tell them their MA (who I am sure are charging them a lot) are doing a crap job. Also one owner told them about a cracked step 6 months ago which could be a hazard and they have not acted. Neither have they serviced the fire alarm. In fact when I asked them about it a year ago they said they didn't even know there was one! How can they take over management of a building without even visiting it????

by Ian Cognito

11:12 AM, 26th April 2021, About 3 months ago

Hi Helen. If the freeholder and managing agent are limited companies, you will be able to find out who the directors are Does the same person appear in both companies (scroll through existing and current officers)? Also check for existing and previous addresses. Do make sure you also Google the companies, in case something comes to light.

If you can find no obvious link between them, then perhaps contact the freeholder to make them aware. A distant freeholder may not have visited the block for years and may wrongly believe that the managing agent is doing a good job looking after the freeholder's assets.

As has been mentioned previously, do have a detailed read of the lease so that you are clear on the leaseholder and landlord rights and tresponsibilities.

by Gracie

14:35 PM, 26th April 2021, About 3 months ago

Reply to the comment left by Gracie at 26/04/2021 - 14:33
"get away with doing so little & charging so much"

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