Notes

Why Is My Service Charge Much More Expensive Than My Neighboring Block?
The difficulty with comparing service charge costs between individual blocks of flats can be explained by considering in several factors. The method of calculation can differ for each block in keeping with any variance in leasehold arrangements. The property size, type, height, condition, age, service facilities, plant, lifts, equipment and lease particulars can all have a very significant influence on the constant maintenance and running costs. In addition, the constant maintenance and repairs background sinking fund provision can also vary considerably making comparisons in the a higher level freehold service charges almost impossible. Not only will the freehold property and it is condition be unique, however the property services necessary in managing and the building might be quite different with the requirements from the property lease.
In summary you should not compare apples with oranges and perhaps you'll probably find explanations for just about any two landlord service charges being different. Here are some possible explanations which can be applicable in comparing one typical block management scenario with another.
(i) You may possess a more comprehensive list of services funded using your service charge (e.g. site manager or porter, all windows cleaned, lifts, auto parking, entry systems etc.).
(ii) Does your neighbour's service charge include sinking funds to allow for future repairs and maintenance? If not, their charge will probably fluctuate dramatically from year to year as large expenditure falls due. Large items could well be charged for separately when they arise being additional to your regular landlord service charge.
(iii) How many individual flats are in the neighbouring building? Smaller blocks of flats with less units tend to possess a higher maintenance charge per unit. Overall maintenance costs are often disproportionately more costly the place that the price is shared by fewer lessees. If service charges are spread across numerous flats the result is the proportion per leaseholder will be less. For example, a roof repair ship to only 6 flats is expensive in comparison to the same facility deliver to 32.
(iv) Do you have extensive gardens or perhaps is your block an old building? If so, your merchandise charge could possibly be adversely affected. The presence of asbestos as an example can have a very dramatic influence on the expense of any works being performed.
(v) What size will be your apartment? The method of service charge calculation ought to be stated in the house lease. It may be apportioned by reference to a floor part of your apartment. If property management Collingwood own a couple bedroom apartment and your friend owns a studio apartment than the can make a significant difference. Some leases simply share all costs equally and this can clearly alter the portion payable quite significantly derived from one of block to another.
(vi) The location and access arrangements to execute works also can influence service charge. Where service contractors cannot erect scaffold, or carry out their works inside a cost effective manner additional time and expenses will result. Difficulties with materials deliveries, parking, craneage, disposal of rubbish etc will all have an affect whereas simple standard procedures with no special requirements won't attract a premium.
Having checked your lease and the other matters described above, you may still consider you happen to be being overcharged. As a long suffering leaseholder there are a number of solutions. Why not consider asking your landlord to employ a professionally qualified property managing agent. If you insist which a firm is appointed which is Regulated by RICS (The Royal Institution of Chartered Surveyors) the service standards they must work to are set outside in the RICS Code. This Code serves to protect clients from unscrupulous practices and therefore requires auditing and protection measures are put in place being susceptible to regular inspection from the institution.
Other options can also be offered to disgruntled leaseholders including taking up their Right to Manage or indeed Enfranchisement the place that the freehold can be purchased by way of a majority in the lessees. However these alternatives aren't always possible and will require time requiring the co-operation of others to initiate. Whatever solution is found, I trust that this above will serve as a useful point of mention of help those that feel they are often susceptible to overcharging.
I offer further explore the main topic of Enfranchisement as well as the Leaseholders' Right to manage (RTM) in the separate article since this particular rights are very important and warrant specific attention and explanation.
It is obviously prudent to look into all with the above matters either before or during the time of purchasing a leasehold property in a block of flats. Generally the management and maintenance costs will tend to be reflected inside the service charge of any property over a period of years. A conveyancing solicitor should request this info in their investigation and look using the freehold block management agent. Please be aware however that this opportunity and procedures involved will certainly vary on location. The procedures described concentrate on England and Wales and therefore are therefore not applicable to other countries.
Additional service charge advice and support could be extracted from a great block management agent providing residential freehold property services for blocks of flats. Readers are advised to seek out block management agent services which can be benchmarked towards the quality standards set out by The Royal Institution of Chartered Surveyors (RICS). These professional practices or management agents benchmark their residence services to the RICS Service Charge Residential Management Code. which has been approved with the housing minister during 2009.
RICS Chartered Surveyors which are 'Regulated by RICS' must comply with this code which can be rigorously enforced through the RICS which does regular inspections of the member firms.
Regulation also secures all kinds of other benefits for freehold management companies, landlords and leaseholders. Service charge monies must be safely managed inside a secure ring fenced client checking account with funds being insured and subject to regular checking and bank reconciliation. In addition the services provided must attain the required standards Typical block management agent duties are covered within the RICS Service Charge Code which could usually include some from the following:-
Effective Procedures for Property Maintenance and Repairs,
Responding to Leaseholder Enquiries from Solicitors on Property Sales,
All Aspects of Service Charges comprising Financial Control, Expenditure, Budgeting, Service Charge & Ground Rent Collection and Accounting,
Regular Client Reporting to Freehold Management Companies, Residents, Lessees, RTM's or Landlords.
Independent Lease Management
Control and Compliance Procedures in Upholding the Covenants with the Property Lease and
Company Secretary Services in Assisting Freehold, RTM and Property Management Companies with Essential Management Company Administration.
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