Service charge hike?

by Readers Question

11:14 AM, 17th June 2019
About a month ago

Service charge hike?

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Service charge hike?

I own a couple of properties where First Port are the property managers, but they seem to be raising service charges at an incredible rate.

As an example over the last 2 years the annual charge has gone from circa £1,100, which I thought was already quite high, to £1,600 which is crazy.

Is there something I can do, or rather is there a good way to question this with them as I’m concerned that at this rate the property will be unsalable in the future.

Many thanks

Mark

 



Comments

Neil Patterson

11:21 AM, 17th June 2019
About a month ago

From The Leasehold Advisory Service >> https://www.lease-advice.org/article/how-to-discover-whats-behind-your-service-charges/

"How to discover what’s behind your service charges

Most legal advisers and many leaseholders are familiar with the right to be provided with a summary of relevant service charge costs under Section 21 of the Landlord and Tenant Act 1985. However, a little-known legal right passes great numbers of leaseholders by every year owing to its relative obscurity.

Under Section 84 of the Housing Act 1996, residential long leaseholders who have formed a recognised tenants’ association have the right to appoint a surveyor to advise them on matters relating to service charges. The Act reveals a few otherwise hidden benefits: the right to inspect documents and the right to inspect the premises."

Mark Lynham

11:23 AM, 17th June 2019
About a month ago

Reply to the comment left by Neil Patterson at 17/06/2019 - 11:21
many thanks Neil, I'll take a look in to this.

jeanette Kirkby

9:03 AM, 18th June 2019
About a month ago

I also have a property with first port and am looking at forming an association with the mother residents to use another management company. The service charge very expensive for the service we receive.

Mark Lynham

9:06 AM, 18th June 2019
About a month ago

Reply to the comment left by jeanette Kirkby at 18/06/2019 - 09:03
from reading i think i need to try and do that, although i suspect most if not all the properties in this development are rented so i'd need to find out all the owner details, which i can try through land registry... my only concern is if people can be bothered..

Richard Adams

9:43 AM, 18th June 2019
About a month ago

Who appointed First Port in the first place? If they are the Management Company rather than Managing Agents is there not already representation from fellow owners on decision making like service charge levels? If First Port decide to re dec common areas say and owners don't think it necessary or vice versa for example there must be an existing method for your influencing them?

Mark Lynham

9:52 AM, 18th June 2019
About a month ago

Reply to the comment left by Richard Adams at 18/06/2019 - 09:43
i think they are appointed by the landlord, Solitaire, so assume they will be the managing agents.. i have to say that i find the lease side of dealing with property very complicated, as i suspect most people do.

Richard Adams

10:05 AM, 18th June 2019
About a month ago

I thought what you say Mark would be the case. Leases are indeed often complicated and different but in leasehold new developments where I am an owner - two - developers were bound to set up a Management Company which they did with their own cronies as directors. Then when development was completed and they withdrew owners were invited to become directors which I did on both occasions. Thus I and other like minded owners as directors appointed Managing Agents who we can fire. Latter work up the budget with service charge levels annually which we approve or not. Thus we have total control. While you are right that many owners "can't be bothered" I cannot believe that your scenario really does mean that decent concerned owners like yourself are completely powerless to influence anything. Is there an AGM in your situation where you can attend and at least voice concerns?

Dylan Morris

10:10 AM, 18th June 2019
About a month ago

First thing to do is compare the service charge accounts for the last few years and see where costs have increased. Buildings insurance is always a very high cost as this is taken out by the freeholder. The premium is decided by how much commission the freeholder wants to take. The more they want, the higher the premium. The premium is not decided by the insurance company but by the freeholder. It’s likely to be way more than what it should be realistically. The freeholder doesn’t have to disclose the amount of their commission so you won’t be able to find out exactly how much they are shafting you.
Management fees are another moving target.
Finding out what costs have increased over the last couple of years is your starting point.

Richard Adams

10:16 AM, 18th June 2019
About a month ago

Reply to the comment left by Dylan Morris at 18/06/2019 - 10:10
Dylan, you are not entirely correct about freeholders arranging insurance and setting the premium to reflect the commission they earn. On the two developments I have been involved in as an owner and Management Company director on one it was just as you describe. On the other the freeholder does not poke his nose in and the Man Co arranges insurance at best competitive premium.

Mark Lynham

10:18 AM, 18th June 2019
About a month ago

Reply to the comment left by Dylan Morris at 18/06/2019 - 10:10
I think then i should request accounts as it jumped up betweeen 2107 and 2018.. and its not anything to do with the insurance, that i know..

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