AIBU to be absolutely devastated by this?

I’m in a similar scenario so me and another leaseholder are spearheading a right to manage proces as it’s only way out. We bought for £190k in 2012, now have a mortgage of £100k and I’d happily sell tomorrow for that much.

I will say though, we’re not actually sure RTM will reduce the service charge as the costs of running a building have just increased so much especially with all the building safety compliance. But we think we will get better service which is a win for us. It really is a terrible state of affairs.

@Malbab ManCo = management company.

So our set up is the freehold of the building is owned by all of the flat owners (everyone owns a share in the company thay owns the freehold), there is a mangment company that is run by volunteer directors elected by flat owners (and only flat owners can be directors).

That company employs managing agents to do the day to day work including collecting the service charge and dealing with the accounts. So we directors do not actually touch any of the money or have access to it. We just approve payments. As Chair I have set up a system that anything over a certain amount has to be approve by at least two directors. I would certainly block any "salary" type payment to a director.

Our block of 28, we all own a share of the freehold.

Therefore we also appoint the management company and a few of us are directors of the freehold company and liase with the management company. We are not paid.

Costs do rise over time and things like fire door regulations mean more surveys and remedial work, even on our 3 story high block.

So even if you self manage then I'd be very wary of not employing someone to do the day to day work and keep you legal.

(We pay around £1500 per annum per flat all in, no lifts, that also covers repainting communal areas inside and out every 5-7 years.)

YANBU. A lot of real estate are scams and traps. We know someone who had the same experience recently with a flat in an extremely good location (Zone 1) but very high service charges. Was on the market for 1.5 years and didn't sell. In the end they managed to get rid of it with a major loss.

Yes they were drawing enormous salaries , one of them was a leaseholder iwen d a flat the other had flat in his daughter's name , they pulled wool over everyone's eyes. Who blindly followed them , he doesn't hand over the accounts too and dunno know how to challenge
What is man co gimmonkeyagain?

I think this is also a good idea and write to any TV programmes/radio shows (Moneybox Radio 4. They have advisors who may help your situation.

The Government need to step in to help in this situation. I support you and I think many other people do too.

Your MP needs to bring this up in Parliament it is an urgent issue that needs resolving.

This ^

You're not alone with this problem, every other flat is also feeling this pain. Use that to your advantage. Contact every other flat to see if you can unite to find a solution to this

Feel so sorry for you. We are currently in the process of selling our flat. We've been lucky so far but still looking forward to when we have exchanged contracts!! It's been a great home to us but the leasehold stuff is criminal.

Oh OP I’ve been in this exact situation. Thankfully we got out and did sell eventually l.

Is there a residents association?
Local MP?
Local council?

Ensure their accounts have been audited for the prior years too? There was certainly funny business in ours. Estate management companies are a group of absolute thieves with no morals or ethics in my experience. Sending love.

@Malbab that is horrific - the lessee directors of your RTM drew salaries?

We are all volunteers and would never dream of such a thing, we are scrupulous about any expenses claims and all payments go through our ManCo to avoid such things. We do not have access to the service charge money.

This is the issue I alluded to share of freehold/RtM not being a magic bullet as you need energetic decent people and lessees who are all willing to engage

No advice. But could you film the garderners and cleaners secretly, and clock them. Just to have some sort of tiny evidence in case it’s needed one day.. And ask your neighbours to do the same. If it does get picked up by media or something.

Have you been to see your MP? Some are very helpful.

I used to live in a freehold house with service charges for maintenance of land we had no access to, it’s daylight robbery completely!! It is so unfair that companies can legally charge hard working people who actually contribute to society and the economy for doing nothing or very very little!

It must be very demoralising to actually work for one of these companies; getting paid to add no value to the economy or society or anything!!!

I thought as part of the leasehold reform bill (someone has already posted it here) you are now allowed to challenge costs? I believe this means you are able to ask for a full breakdown of their costs that go into the charge and can see how much they charge for admin/management fee (I.e. profit).

Here’s what I would do;

• The company should be part of a redress scheme such as the property ombudsman. To complain to The property ombudsman you need to have written a formal complaint letter to the company and if you do not receive a reply within 15 days you can complain to the ombudsman. Write a formal complaint letter and title it as such asking for a breakdown of charges and the fact you find these unreasonable, and if the company is as useless as the one we had they won’t reply to you and that will work in your favour and you can put a complaint in to the ombudsman. The reply from them must be a formal reply via letter. You have more rights than I did when I complained to the ombudsman because you are a leaseholder not a freeholder. Do not tell them your plan to sell the flat that is irrelevant I think and may weaken your position.
• Write a letter to your MP after the redress scheme has taken your case. The only way I ever got a reply from the company was when my MP wrote them a letter.
• Ask any interested neighbours to also do the same with separate complaints and separate letters to the MP to increase the pressure.
• Only communicate with the company in writing, start complaining about every little thing and asking them about every little charge on their breakdown. Use their poor or lack of responses to build a case against them. Make sure all of your communication from your side is reasonable and appears cordial and unemotional. Make a note of any times they have not responded, any unprofessional responses, lies or empty promises from their side, if they are as useless as the company I dealt with you will have a lot and this will work in your favour. In the end I had a huge paper trail of lies, no responses etc. and unprofessional conduct.
• When you do pay them the annual charge accompany it with a letter stating it is a payment under protest.
• Hopefully with the knowledge that the MP and redress scheme is on their case they will have to be transparent about their costs and pricing and if the costs are unreasonable which it sounds like they are then they will have to lower their charges.

Speak to your MP and your local councillors. Try to arrange a meeting with everyone else in the flats and all club together to get legal advice. Remain anonymous if you have to but write to your local paper, your local council, anyone you can think of to publicise the issue. Go to your local Citizen's Advice Bureau.

I can't advise you to do this because it's a big decision, but if it was me my worst case scenario would be to sell for whatever price I could get just to escape the situation. Maybe your tenants will buy your flat if you drop the price enough?

But don't despair. I know it's awful but all nightmares come to an end eventually.

We had similar. Planning to sell to buy family home when I was pregnant but cladding ussue happened and got stuck in the flat over covid with baby. Our flat were only something like 12cm over the heigh rules!

Fees are now something ridiculous like £280 a month for a permanently broken lift and a hoover run around the stairs once a year.

We ended up renting it out and moving up north to afford a house and continue our lives. Got done for extortionate amount of 2nd house tax despite the fact we couldn't sell the flat. Is this any kind of possibility for you?

After we got our safety certificate we tried selling but 2 sales fell through due to COL/ mortgage rates. So it's rented out again and we make a few hundred after all the costs. Only management now asking each flat for £7k for ceiling work and the boiler has just gone and will be £4k due to building regs changes.

We know a lot of our old neighbours in the flats and all their lives got really messed up/ stuck on hold. It's shameful the government didn't step in and hardly anyone is even aware of the cladding issue.

So sorry to hear about your situation we are in similar situation, although two years ago RTM was formed only the service charge doubled thereafter 😭 it turned out the directors were nothing short of conmen and drew salary for themselves from the RTM for doing nothing and lining their own pockets with commission from companies who provide sub standard repair work that led to repeated failings, lifts repair repeatedly for example - went from frying pan situation to fire really, those two rogues were forced to step down now my husband has stepped up to be a director but the other director who also volunteered has now stepped down and the whole RTM is in a mess , he does a very busy day job and trying to sort this out and losing his mind fast; he has managed to bring the service charge down for next year so it can be done if right people are showing initiative, the RTM is in a limbo now with lack of directors and scared to think it will eventually fold in😭

i would band together with the other building owners and tenants, form some sort of action group.

Not a helpful post. The solicitor would have explained that service charges are payable for sure, but future levels are an unknown. The OP didn’t have a problem buying at the levels of charge in 2020. A conveyancing solicitor is not psychic and they cannot predict future proposed work or have known the gardening and cleaning etc would be a rip off.

Join the National leasehold campaign on FB, there's loads of information on there, plus people in the same situation you're in. Management companies are law unto themselves, thieving bastards really.

Just a thought, and I don’t know if there would be enough people for a big action, but might be worth contacting someone like Keller Postman who take on class action type cases with no win, no fee. Maybe see what they say.

I think there has probably been people in your situation that have chosen repossession over the extreme fees and unable to sell. I would contact your local mp, maybe take it to the press? But yes solicitor will be needed. I’m sorry op it sounds like daylight robbery and should not be allowed. Could you form a neighbours meeting and fight against it. Extremely unfair.

@VanillaPlanifolia That can be a huge and increasingly common issue. We have some lessees who got in to debt refusing to pay their service charge for over a year "because they didn't know there would be one and hadn't budgeted for it" (our SC is a pretty reasonable £1.5k a year and covers things like insurance, electricity, cleaning etc...)

I think it can be a combination of naive buyers, shit solicitors (do not use those cheapo online conveyancing warehouses) and people over extending themselves and not budgeting.

Of course the OP is in a different situation and could not have anticipated the awful cladding shitshow she is now caught up in.

Further info here
https://www.housing-ombudsman.org.uk/centre-for-learning/fact-sheets/charges/#:~:text=Concerns%20about%20the%20level%20of%20service%20charge,-Service%20charges%20are&text=A%20dispute%20in%20respect%20of,the%20agencies%20below%20for%20help.

service charges must be reasonable by law.
if the managing agent is employed by the freehold landlord seek legal advice about the route of RTM. If you are already members or shareholders of the management company then sack off your managing agent and appoint another more competent one.

@Haveyouseenthischicken

if you head over to Facebook look up the national Leashold campaign

The group is full of people in the same situation
they can point you in the right direction of how you can obtain right to manage . they are really helpful

they can give you advice on solicitors and lots of other stuff

for right to manage you need at least 50 percent of the owners to agree

my son almost bought a flat where at the time the service charge was 2400 a year
its now over 5k
the people that live there are doing right to manage as not a single flats sold since 2022

this is due to the service charge and ground rent issues