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 may be explained by considering in several factors. The method of calculation can differ for each block in accordance 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 significant impact on taking care and running costs. In addition, the maintenance and repairs history and sinking fund provision might also vary considerably making comparisons with the degree of freehold service charges very difficult. Not only will the freehold property and its particular condition be unique, nevertheless the property services necessary in managing and the structure can be quite different along with the requirements with the property lease.
In summary you should not compare apples with oranges and in some cases you can likely find good reasons for virtually any two landlord service charges being different. Here are some possible explanations which may be applicable in comparing one typical block management scenario with another.
(i) You may possess a more comprehensive set of services funded through your service charge (e.g. site manager or porter, all windows cleaned, lifts, vehicle, 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 may be charged for separately whenever they arise being additional to your regular landlord service charge.
(iii) How many individual flats come in the neighbouring building? Smaller blocks of flats with less units tend to use a higher maintenance charge per unit. Overall maintenance cost is often disproportionately higher priced the place that the cost is shared by fewer lessees. If service charges are spread around across a lot of flats it makes sense that this proportion for each and every leaseholder will probably be less. For example, a roof repair deliver to only 6 flats is pricey in comparison to the same facility provided for 32.
(iv) Do you have extensive gardens or is your block an older building? If so, marketing charge may be adversely affected. The presence of asbestos as an example can use a dramatic effect on the costs associated with a works being accomplished.
(v) What size is the apartment? The method of service charge calculation must be stated in the property lease. It could be apportioned by experience of the floor part of your apartment. If you own a two bedroom apartment plus your friend owns a studio apartment this can make a significant difference. Some leases simply share all costs equally and this can clearly alter the portion payable quite significantly from one block to another.
(vi) The location and access arrangements to carry out works can also have an affect on service charge. Where service contractors cannot erect scaffold, or accomplish their works inside a economical manner an extension cord and expenses will result. Difficulties with materials deliveries, parking, craneage, disposal of rubbish etc will all come with an affect whereas simple standard procedures without any special requirements will not likely attract reasonably limited.
Having checked your lease and the other matters described above, you'll probably still consider you're being overcharged. As a long suffering leaseholder there are numerous of solutions. Why not consider asking your landlord to employ a professionally qualified property managing agent. If property management clifton hill insist which a firm is appointed which can be Regulated by RICS (The Royal Institution of Chartered Surveyors) the service standards they have to work to are set in the RICS Code. This Code serves to protect clients from unscrupulous practices as well as requires auditing and protection measures are put available being subject to regular inspection through the institution.
Other options can also be open to disgruntled leaseholders including taking up their Right to Manage or indeed Enfranchisement in which the freehold may be purchased by the majority with the lessees. However these alternatives are not always possible and will take some time requiring the co-operation of others to initiate. Whatever solution is to be found, I trust that this above provides as being a useful point of reference to help those that feel they may be subject to overcharging.
I give further explore the topic of Enfranchisement and also the Leaseholders' Right to manage (RTM) in a very separate article since this particular rights are important and warrant specific attention and explanation.
It is needless to say prudent to look into all from the above matters either before or before getting a leasehold property in a very block of flats. Generally the management and maintenance costs will tend to be reflected within the service charge of any property a duration of years. A conveyancing solicitor should request these details in their investigation and search using the freehold block management agent. Please be aware however the opportunity and procedures involved will probably vary on location. The procedures described give full attention to England and Wales and they are therefore not applicable to other countries.
Additional service charge advice and support could possibly be obtained from an excellent block management agent providing residential freehold property services for blocks of flats. Readers are encouraged to search for block management agent services which can be benchmarked on the quality standards determined by The Royal Institution of Chartered Surveyors (RICS). These professional practices or management agents benchmark their property services towards the RICS Service Charge Residential Management Code. that has been approved from the housing minister in '09.
RICS Chartered Surveyors which are 'Regulated by RICS' must adhere to this code which can be rigorously enforced through the RICS which performs regular inspections of these member firms.
Regulation also secures a number of other benefits for freehold management companies, landlords and leaseholders. Service charge monies should be safely managed in the secure ring fenced client bank account with funds being insured and subject to regular checking and bank reconciliation. In addition the help provided must reach the required standards Typical block management agent duties are covered under the RICS Service Charge Code which will 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 from the Property Lease and
Company Secretary Services in Assisting Freehold, RTM and Property Management Companies with Essential Management Company Administration.
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