Typical service charge complaints and a little advice for home-owners
1. My service charge is too high!
We are all conscious about costs and home-owners who pay service charges will want to see that their agent is regularly testing the market in order to deliver routine services. Some agents are not working hard enough to get the best deal possible for their clients. Regular tendering is a must, especially for items like gardening and cleaning.
However, also beware of the managing agent that artificially sets low service charges. You have invested money in your estate as well as your individual dwelling. Don’t threaten that investment by allowing service charges to be lower than they need to be. You will only end up with large bills in the future and you run the risk of under-maintaining the property.
2. The flat above me is leaking into my flat – what should I do?
In most circumstances, this is not going to be a matter for your management company. Each flat-owner has a responsibility to ensure they repair their property and keep it water-tight. You should have a chat with your neighbour and politely ask them to investigate the matter. This usually does the trick.
Your agent should be able to assist by giving you insurance information when you need it. The agent is poorly placed to take sides in a dispute situation, however. In the rare event that you need to take formal action against another flat-owner to resolve a leak, you will need to fund the work. The alternative would be the other owners in the building spending their money on a flat-to-flat dispute which would be unfair and contrary to the lease.
LEASE has a useful guidance note on the issue:
Some flat-owners are reluctant to contribute towards works in the distant future by paying towards an annual reserve fund. It can be a bind handing over your hard-earned cash to your management company. However, almost all professional sources agree that maintaining a healthy reserve fund is beneficial to all parties to the property. The RICS code of practice compels your management company to include a reserve fund in the service charge where possible.
Some flat-owners who are short-term investors may feel hard done by in this scenario, but as any good solicitor will tell you, it will be easier to sell your flat if a sensible reserve plan exists.
4. The managing agent appointed by the developer is useless!
On new-build estates, the managing agent that works for your management company is nearly always put there by the housing developer who built the property. In many cases, the managing agent has a commercial relationship with the developer which means they are likely to win more business in the future by looking after the developer’s interests.
Most of these developer-appointed agents are doing their best to win you over but they are handicapped by their relationship with the developer. They are weak in negotiating good deals on warranty issues and building defects. They will also be unlikely to litigate against the developer when required. Often, the only way for the flat owners to ensure long-standing construction issues are sorted quickly is to sack the agent and appoint someone else.
5. I can never get hold of my Property Manager!
Some managing agents, particularly those who work for large freehold investors have built up reputations for very poor communication. Months may pass before written correspondence is returned. This is un-acceptable and managing agents should have reasonable time-frames set out for responding to letters and telephone calls.
However, the job title of ‘property manager’ can be misleading. The economics of block management mean that a typical property manager needs to run anywhere from 500 to 1,200 units on average to make profit for their firm. These units might be spread across 10-50 blocks/estates. So, while you should expect consistent levels of response, a residential property manager is not going to be able to offer the same kind of attention as a hotel manager, for instance.
Expect emergency issues to be dealt with right away, over the telephone from anyone in the firm. Typical turn-around times on voicemail messages are 24 hours, whilst you should allow up to 2 working days for responses to emails.
Joe Mallon MIRPM AssocRICS,
JFM Block & Estate Management LLP