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Are your leasehold property management service charges too expensive ?
I wonder how many leaseholders out there repeatedly ask themselves the same question on a regular basis.
There are of course numerous reasons why it is difficult to compare the service charges levied by your block management agents. The property management company for the block of flats across the road may well currently charge less. But a like for like, fair assessment is unlikely to be available and even if it is, how would you obtain all of the relevant information to satisfy yourself that a good likeness existed ?
The method of calculation for maintenance can differ significantly between each block of flats or estates in line with any variance in the property lease or the leasehold arrangements.
The property characteristics will play a major influence including the overall size, type, height, number of stories, specification, condition and age.
Service facilities and plant, lifts and other equipment not only require to be maintained but will also require replacement and provision must be made for both.
The particulars of the lease will affect the maintenance regime and running costs. The frequency for maintenance cycles, responsibility for costs, and their apportionment is key to each leaseholder's annual bill.
In addition, the maintenance and repairs history will impact on the buildings insurance premium and the amount of any excess applicable to claims.
Health and safety legislation is increasingly having more of an impact on costs. Risk assessments are required for fire, general health and safety and any works which may be carried out at the property. Fire alarm installations, emergency lighting and other safety systems must be correctly maintained and proven to be in good working order to satisfy the current regulations. Inspections are now carried out by insurers, risk assessors and the local authority fire brigade to ensure compliance.
Sinking fund provisions may also vary considerably with some being more prudent and better provisioned than others.
All of the above makes like for like comparisons of the level of block property management services and leasehold service charges extremely difficult, if not impossible.
In summary you should not compare apples with oranges and there are probably good reasons why any two service charges may be very different.
Why should common sense not prevail and simply take a reasoned judgement on the matter ?
Having checked your lease, annual block management accounts and the other matters described above, you may still consider you are being overcharged. For those of you who may be long suffering leaseholders who still feel aggrieved there are a number of options available.
Why not consider asking your landlord or freeholder to employ a firm of professionally qualified property management agents. If you insist that a professional is appointed which is Regulated by RICS (The Royal Institution of Chartered Surveyors), you will be protected by the stringent RICS Regulations which are actively enforced by the Institution.
The block management service standards RICS members must work to are set out by the RICS in its Service Charge Residential Management Code. This Code serves to provide a benchmark for good property management standards protecting clients and leaseholders from unscrupulous practices and in addition requires that auditing and protection measures are put in place.
Regulated members of the RICS are subject to regular checking and inspection by the institution to ensure that their freehold and leasehold property management procedures are compliant.