Why Is My Service Charge Much More Expensive Than My Neighboring Block?

The difficulty with comparing service charge costs between individual blocks of flats might be explained by considering in a number of factors. The method of calculation may vary for each and every block consistent 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 affect on taking care and running costs. In addition, the constant maintenance and repairs background sinking fund provision could also vary considerably making comparisons with the a higher level freehold service charges very difficult. Not only will the freehold property and its condition be unique, though the property services necessary in managing and looking after the structure can be quite different combined with the requirements of the property lease.
In summary it's not necassary to compare apples with oranges and in many cases you can probably find explanations for 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 pair 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 may well fluctuate dramatically from year to year as large expenditure falls due. Large items may well be charged for separately as and when they arise being additional to the regular landlord service charge.
(iii) How many individual flats are in the neighbouring building? Smaller blocks of flats with less units tend to use a higher maintenance charge per unit. Overall maintenance costs are often disproportionately more expensive the place that the expense is shared by fewer lessees. If service charges are dispersed across many flats it makes sense the proportion per leaseholder will probably be less. For example, a roof repair ship to only 6 flats is costly when compared to same facility deliver to 32.
(iv) Do you have extensive gardens or perhaps your block an old building? If so, marketing charge may be adversely affected. The presence of asbestos by way of example can use a dramatic effect on the expense from a works being carried out.
(v) What size can be your apartment? The method of service charge calculation needs to be stated in the property lease. It could possibly be apportioned by reference to the floor area of your apartment. If you own a 2 bedroom apartment as well as your friend owns a studio apartment then this can certainly produce a significant difference. Some leases simply share all costs equally this also can clearly customize the portion payable quite significantly from one block to another location.
(vi) The location and access arrangements to handle works may also have an impact on service charge. Where service contractors are unable to erect scaffold, or perform their works in a very affordable manner additional time and charges will result. Difficulties with materials deliveries, parking, craneage, disposal of rubbish etc will all provide an affect whereas simple standard procedures without special requirements will not likely attract a premium.
Having checked your lease and the other matters described above, you may still consider you might be being overcharged. As a long suffering leaseholder there are a variety of possibilities. Why not consider asking your landlord to employ a professionally qualified property managing agent. If you insist which a firm is appointed that's Regulated by RICS (The Royal Institution of Chartered Surveyors) the service standards they must work to are set out in the RICS Code. This Code serves to protect clients from unscrupulous practices and likewise requires auditing and protection measures are put in position being be subject to regular inspection with the institution.
Other options could also be offered to disgruntled leaseholders including taking up their Right to Manage or indeed Enfranchisement the location where the freehold may be purchased with a majority with the lessees. However these alternatives are certainly not always possible which enable it to require time requiring the co-operation of others to initiate. Whatever option would be can be found, I trust how the above will serve like a useful point of mention of help people who feel they are often at the mercy of overcharging.
I give further explore the subject of Enfranchisement as well as the Leaseholders' Right to manage (RTM) in the separate article simply because this particular rights are crucial and warrant specific attention and explanation.
It is needless to say prudent to look into all in the above matters either before or at the time of getting a leasehold property in the block of flats. Generally the management and maintenance costs will tend to be reflected within the service charge of the property in a period of years. A conveyancing solicitor should request this information in their investigation and look while using freehold block management agent. Please be aware however that the opportunity and procedures involved are likely to vary on location. The procedures described concentrate on England and Wales and are therefore not applicable to other countries.
Additional service charge advice and support may be extracted from a fantastic block management agent providing residential freehold property services for blocks of flats. Readers are encouraged to search for block management agent services which are benchmarked towards the quality standards determined by The Royal Institution of Chartered Surveyors (RICS). These professional practices or management agents benchmark their home services towards the RICS Service Charge Residential Management Code. that was approved from the housing minister in 2009.
RICS Chartered Surveyors that happen to be 'Regulated by RICS' must abide by this code which is rigorously enforced by the RICS which does regular inspections of these member firms.
Regulation also secures many other benefits for freehold management companies, landlords and leaseholders. Service charge monies has to be safely managed in a secure ring fenced client banking account with funds being insured and be subject to regular checking and bank reconciliation. In addition the assistance provided must achieve the required standards Typical block management agent duties are covered underneath 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.
property management Carlton  and Compliance Procedures in Upholding the Covenants in the Property Lease and
Company Secretary Services in Assisting Freehold, RTM and Property Management Companies with Essential Management Company Administration.