Ground rent and services charges.... a query.
Discussion
I live in a flat and have the lease (3 flats in it).
We all pay £750 a year for the ground rent, etc...
Nothing has been done for the upkeep of the building/communal areas for years getting on for 10 according to the neighbour (its his BILs flat and hes had it 10 years)...
So what has happened to all the up keep money?
Should they keep a kitty and should it grow until we ask them to do something/need something doing?
I have asked for all invoices and the total amount in the kitty that has not been used so far, or do I fear that money not used for that particular year is classed as profit by the company holding the freehold?
Suprising enough they have been whinging about the missed payment of ground rent this morning (they are supposed to tell me when to pay and didnt as per usual), they dont like/accept SO and DD but do accept cheques (not had one of those in 8 years) and as such they keep forgetting to tell me when I need to do bill payments as per the agreement we reached. I thought I would ask them for proof of what the money goes on and then the complaints stopped and I cant get hold of them now....
If I asked them to redecorate the communal area can they charge me or should it come out of this kitty and only once the kitty is used up should they charge the owners of the flats?
Someone who can shed somelight on this would be much appreciated?
We all pay £750 a year for the ground rent, etc...
Nothing has been done for the upkeep of the building/communal areas for years getting on for 10 according to the neighbour (its his BILs flat and hes had it 10 years)...
So what has happened to all the up keep money?
Should they keep a kitty and should it grow until we ask them to do something/need something doing?
I have asked for all invoices and the total amount in the kitty that has not been used so far, or do I fear that money not used for that particular year is classed as profit by the company holding the freehold?
Suprising enough they have been whinging about the missed payment of ground rent this morning (they are supposed to tell me when to pay and didnt as per usual), they dont like/accept SO and DD but do accept cheques (not had one of those in 8 years) and as such they keep forgetting to tell me when I need to do bill payments as per the agreement we reached. I thought I would ask them for proof of what the money goes on and then the complaints stopped and I cant get hold of them now....
If I asked them to redecorate the communal area can they charge me or should it come out of this kitty and only once the kitty is used up should they charge the owners of the flats?
Someone who can shed somelight on this would be much appreciated?
As far as I know ground rent is simply that - rent for the space you occupy.
A service charge paid to a management company would be for maintainence - is this what you're paying?
Our management company send an annual report detailing the company accounts, where the money is spent and how much of it, and there's also an AGM and quarterly meetings where residents can have a say. If you don't have any of this, I'd look at removing the current management company from their contract.
A service charge paid to a management company would be for maintainence - is this what you're paying?
Our management company send an annual report detailing the company accounts, where the money is spent and how much of it, and there's also an AGM and quarterly meetings where residents can have a say. If you don't have any of this, I'd look at removing the current management company from their contract.
Neil_H said:
As far as I know ground rent is simply that - rent for the space you occupy.
A service charge paid to a management company would be for maintainence - is this what you're paying?
Our management company send an annual report detailing the company accounts, where the money is spent and how much of it, and there's also an AGM and quarterly meetings where residents can have a say. If you don't have any of this, I'd look at removing the current management company from their contract.
Ok... Im awaiting them to tell me what the money has gone on and whats in the coffers at the moment, should be quite a lot since nothing has been spent on the building and I assume they cant charge for things they havent done and if there is nothing in there I will be requesting a full breakdown for the previous X years.A service charge paid to a management company would be for maintainence - is this what you're paying?
Our management company send an annual report detailing the company accounts, where the money is spent and how much of it, and there's also an AGM and quarterly meetings where residents can have a say. If you don't have any of this, I'd look at removing the current management company from their contract.
I dont remember getting an annual report other than the insurance doesnt cover the building costs anymore so needs to go up and they re-evaluation fee is £400, I asked where the hell that was picked up from and got no reply.
Hi,
Are the chrges you get just for ground rent or for ground rent and service charges? Who are they collected by, freeholder or a management company set up for your block?
Management companies should be run as not for profit so anything collected (Management charges) should only be used for the upkeep and running of your block and if not spent should be either returned to you or put in a reserve fund for major works needed in the future, see below. Ground rent goes to the freeholder so you wont see anything done with that. Accounts should be available from the management company.
If you check your lease there will be clauses within that determine when the management company should be carrying out works on the block ie external decorations every 5 - 7 years, internal decorations every 5 -7 years etc.
If you need anything else or want me to have a look at anything give me a shout, for my sins this is what i do for a living.
Are the chrges you get just for ground rent or for ground rent and service charges? Who are they collected by, freeholder or a management company set up for your block?
Management companies should be run as not for profit so anything collected (Management charges) should only be used for the upkeep and running of your block and if not spent should be either returned to you or put in a reserve fund for major works needed in the future, see below. Ground rent goes to the freeholder so you wont see anything done with that. Accounts should be available from the management company.
If you check your lease there will be clauses within that determine when the management company should be carrying out works on the block ie external decorations every 5 - 7 years, internal decorations every 5 -7 years etc.
If you need anything else or want me to have a look at anything give me a shout, for my sins this is what i do for a living.
Links181 said:
Hi,
Are the chrges you get just for ground rent or for ground rent and service charges? Who are they collected by, freeholder or a management company set up for your block?
Management companies should be run as not for profit so anything collected (Management charges) should only be used for the upkeep and running of your block and if not spent should be either returned to you or put in a reserve fund for major works needed in the future, see below. Ground rent goes to the freeholder so you wont see anything done with that. Accounts should be available from the management company.
If you check your lease there will be clauses within that determine when the management company should be carrying out works on the block ie external decorations every 5 - 7 years, internal decorations every 5 -7 years etc.
If you need anything else or want me to have a look at anything give me a shout, for my sins this is what i do for a living.
Its a management company that own the freehold (3rd party as in not ourselves).... tho I want to change that.Are the chrges you get just for ground rent or for ground rent and service charges? Who are they collected by, freeholder or a management company set up for your block?
Management companies should be run as not for profit so anything collected (Management charges) should only be used for the upkeep and running of your block and if not spent should be either returned to you or put in a reserve fund for major works needed in the future, see below. Ground rent goes to the freeholder so you wont see anything done with that. Accounts should be available from the management company.
If you check your lease there will be clauses within that determine when the management company should be carrying out works on the block ie external decorations every 5 - 7 years, internal decorations every 5 -7 years etc.
If you need anything else or want me to have a look at anything give me a shout, for my sins this is what i do for a living.
There has been nothing done in years tom the property, externally or internally and the communal area has a carpet that was around when the neighbours BIL was there (10+ years), so its a fiar assumption that thats when the last internal redecoration was.
For external decorations, does that include the changing of windows? new sash or double glazing? Cause if im right and they have not been skimming on the pot, there should be a fair wedge to get rid of the rotten windows and put better ones in. Is that allowed?
Do they have to justify their choice of insurance companies and give the breakdown of the re-evaluation of the building insurance (£400 charged to the owners) as this is very high and I would like to see the certificate for the insurance and to prove it was not enough to rebuild and they had to get new insurance.
If the management company own the freehold they should still be accounting for your service charge payments seperatley. You should be presented with accounts specifically for your block at the end of each year. For a small block of three flats they are probably interanl accounts from the management company and not prepared by an accountant/audited so its worth having a close look at them. You could ask to have them audited every three to five years just to keep a bit of an eye on things.
Replacement of windows is going to depend on the terms of your lease and if the windows, frames, glazing is demised under your lease. This does vary so you need to have a read.
As freeholders they can choose the insurers for the building, they may be getting a bit of commision for using one company so its worth getting a comparison to see if what they are putting in place is at a fair cost. Re valuation is worthwhile if its not been done for a long time, £400 seems a little steep, but I'm not an expert on valuation costs. You will be able to compare the current insured sum and the new sum when the next certificate is issued to see if there was any differance, or ask them for a copy of the valuation.
Replacement of windows is going to depend on the terms of your lease and if the windows, frames, glazing is demised under your lease. This does vary so you need to have a read.
As freeholders they can choose the insurers for the building, they may be getting a bit of commision for using one company so its worth getting a comparison to see if what they are putting in place is at a fair cost. Re valuation is worthwhile if its not been done for a long time, £400 seems a little steep, but I'm not an expert on valuation costs. You will be able to compare the current insured sum and the new sum when the next certificate is issued to see if there was any differance, or ask them for a copy of the valuation.
Links181 said:
If the management company own the freehold they should still be accounting for your service charge payments seperatley. You should be presented with accounts specifically for your block at the end of each year. For a small block of three flats they are probably interanl accounts from the management company and not prepared by an accountant/audited so its worth having a close look at them. You could ask to have them audited every three to five years just to keep a bit of an eye on things.
Replacement of windows is going to depend on the terms of your lease and if the windows, frames, glazing is demised under your lease. This does vary so you need to have a read.
As freeholders they can choose the insurers for the building, they may be getting a bit of commision for using one company so its worth getting a comparison to see if what they are putting in place is at a fair cost. Re valuation is worthwhile if its not been done for a long time, £400 seems a little steep, but I'm not an expert on valuation costs. You will be able to compare the current insured sum and the new sum when the next certificate is issued to see if there was any differance, or ask them for a copy of the valuation.
Thats what Im currently doing as i think its time the internals/externals of the building need a spruce up as its not been done for a whileReplacement of windows is going to depend on the terms of your lease and if the windows, frames, glazing is demised under your lease. This does vary so you need to have a read.
As freeholders they can choose the insurers for the building, they may be getting a bit of commision for using one company so its worth getting a comparison to see if what they are putting in place is at a fair cost. Re valuation is worthwhile if its not been done for a long time, £400 seems a little steep, but I'm not an expert on valuation costs. You will be able to compare the current insured sum and the new sum when the next certificate is issued to see if there was any differance, or ask them for a copy of the valuation.
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