AIBU to be absolutely devastated by this?

OP, do you not have an AGM with the management company?
You should be. A good management company will have one, and it will show where your money is going.
Your service charge doesn’t go to the management company. It should be going in to an account owned by you and the other owners of the flats, say Court Hall. All the money goes in there. Then the gardener, the cleaners etc get paid by yourselves from that account. The management company just get a fee from the account. They don’t get all the money and reluctantly pay out to people because they want to keep the money. It’s never their money it belongs to Court Hall.
This should all be gone over at your AGM. You can then discuss if you want to change cleaners/gardeners etc if you think they are crap. Necessary repairs to buildings etc can also be discussed. And you can vote if you want to get rid of your management company.
sorry you’re having such a tough time over it. Some management companies are indeed, crap.

this should have come up in the conveyancing...presumably your solicitor reviewed the lease and told you how the management charges work?

In your position I would start by challenging it informally if you haven’t already.

Email the management company and ask for copies of the three quotes they have got for the work on the report. You should be able to work out roughly how much they’ve asked for additional to last years service charge. Do the numbers balance? If not ask why. Do the quotes seem reasonable and genuine? If not ask why.

I would also probably pick a couple of areas where the service is poor - cleaning and gardening maybe - and ask to see copies of invoices. Check if the invoices match the amounts charged plus whether they seem fair for the service given.

Can you exercise your right to manage together with other flat owners?

It is categorised as a “high risk building” under the new building safety act?

Are there any charities assisting with those affected by the cladding scandal?

Those are a few questions to look into. This is a huge topic in the construction industry at the moment and and there is outrage amongst all of us who work in this sector about what flat owners are having to put up with and the ongoing trauma they’re enduring. It’s not my area of expertise but there is a lot of information out there.

That fee for a report is ridiculous. As a minimum I’d ask the management company to provide “the scope of the report and the qualifications of the professional who’s going to be writing it” which is a completely reasonable request. Absolutely ridiculous. Good luck.

It is a total scam now these associations work and can just put up service charges / it needs regulation. I’d suggest writing to each of the ward or local councillors in your area (you can google them for their emails) and write to your local MP. They can apply pressure to your hosing association. Write a letter to your local newspaper about the scandal and also post on social media tagging said company. What these tactics can do is highlight the company is bad light. If you can bear to do this get a local property solicitor to review your lease. What you want to see are levers in any of the clauses that enable you as lease holder to challenge poor services and challenge therefore thr costs of servicing. Plus your right to see a breakdown of the costs of servicing. What you are aiming to do is lower the one off payment and challenge and lower the service changes. This will take time and be more work which understand you may not wish to do. There are companies and individuals that can also review this who have high profiles which I’ll dig out too. Lastly - solidarity - it’s a total corrupt and awful system you’re caught up in all a result of lack of last government regulation and letting “the market sort it out S the market knows best”’

I understand your pain. We are in a similar albeit not as challenging, situation as you: bought flat in inner London through part buy part rent, staircased up, and just as we were getting ready to sell, the cladding issue arose. Like you we now rent out the flat, and we moved into a smaller flat out of London for school etc.
Unlike our first flat hasn't been fixed and likely never will be (the building owner keeps saying 'next few years' and has been for the last few years. Unlike you we haven't been screwed over for extortionate service charges, or any of the walking watch fees.
My advice for you is:

1. For cladding affected flat that you are renting out, please ensure that you are correctly following the laws on renting. It's both the morally correct thing to do, and can save you a fortune in legal costs if you make a mistake eg forget to serve the deposit certificate on the tenants- big trouble for you etc. It sounds like you can't afford this extra stress or legal issues. Remember you need to pay tax on the income too. You will need to ask your mortgage company for permission to rent out the flat and this will likely increase the mortgage by 1%. However, you will need permission from the leaseholder in writing that you can rent the flat out, so think very carefully about whether you will be able to obtain this before asking the bank for renting permission.
2. Maybe increase the rent when the contract comes up for renewal- no-one likes to do this but if you are that desperate for cash. Also it will be even harder to sell the flat with a tenant in situ if the figures don't look that good.
3. Service charges- you have to fight these. Our landlord was one of the larger housing 'charities' so not an out and out cowboy, but we were being charged for stuff that wasn't happening. We collected the evidence, challenged the fees, and some of them were refunded. It is possible. https://www.lease-advice.org/advice-guide/service-charges-other-issues/#:~:text=You%20and%20your%20landlord%20can,to%20an%20estimate%20or%20budget. We found that challenging and winning in some areas meant that like all bullies, they didn't take the piss so much afterwards. We never even had to go to tribunal, but if you do and you lose, my understanding is that it's free/very cheap. This is an area you will need to discuss with other residents, but you must challenge the fees.
4. Is your mortgage with Nationwide? Ours is on the cladding flat, and they said we would go on their really expensive standard rate once our tracker had finished. Howeve there is a legitimate way around this but it's really complicated to type....happy to do so though it if helps.
5. As others have said, look carefully at taking over the management of the building. We did but didn't bother in the end as the service charges were reduced.
6. Copy and paste what you wrote to your MP. As a teacher and a socialist, I detested the last government but that said, Micheal Gove was the only politician of either party who was really on it with cladding. I think if it wasn't for covid, cladding would have been the scandal of the decade. 7)https://endourcladdingscandal.org/get-involved/meet-campaign-partners/ This group is useful too.

I hope this is helpful- I know alot of other posts have this info- I feel your pain. You need to become militant and really push back on the service charges. This weekend speak to the other flatowners. I know it is a massive hassle, but unless you push back they will keep coming back for more.
And it is worth remembering that however bad we have it, it was a lot worse for those who died in Grenfell.
Good luck.

A friend was in a similar situation. She and the other flat owners got together and took the management company to court. It took a while but they won and now self manage!!! The management company were awful doing barely any maintenence and charging ridiculous amounts, similar to the situation you're in. Good luck OP. It sounds so stressful but stay strong. Ask for a breakdown of what they're paying for, meet with the other flat owners and go from there.

I am so sorry - horrific situation.

Is there any mechanism in your title deeds that allows you and the other owners to remove the management company and replace them? I’m based in Scotland so don’t know how it works in England but if they’re the equivalent of a factor it may be that a quorum of the owners can replace them?

I feel so much for you. The only other thing I can say is you’re still young, you can come back from this. But it’s terribly unfair you’ve been put in this position.

Appreciate this doesn’t help you in any way but I have learned so much from this thread that I was ignorant of. I’ve vaguely heard and knew about service charges and management company issues like this, but I had no idea of this sort of detail. It’s scandalous and feels like and Reads like extortion and fraud to me. I am angry on your behalf and I am astonished about the lack of regulation.

From someone who knows nothing, my gut feeling is that you are young, this will become a thing of the past, but I think taking some of the actions other more knowledgeable posters have suggested, including your MP, would mean that you won’t look back years later and regret you didn’t. But I totally get why you might not choose that. I also wonder about the timing of the build and cladding, would a no win no fee solicitor maybe take something like that on, for all the residents.

Hi OP,

You have evidence the service charge has resulted in over a 25,000 loss on your property and it’s obviously impacted your financial plans and life.

The increase in service costs seems unfair and unreasonable and exploiting their position arguably.

I am just making a guess as to what the argument is.

I know that it seems daunting but if you could find a lawyer the costs split between all of you wouldn’t be so bad.

I think you should ask the others if they want to pursue a class legal action. I would imagine they’ll reduce their service charge before it gets beyond letters.

This looks helpful

Ask the company for an FOI request on what they’ve spent their previous budgets on. I bet 80%+ is “admin”. Just keep asking for FOI requests on everything and then pull it apart. Challenge all their expenses and how they awarded the contract to XX external company. Was it via a tender or did they just give it to their mates company? Then if something is clearly dodgy, collectively speak to a solicitor for advice. I’d literally challenge everything. Good luck

Absolutely disgraceful, I feel for you OP. Don't know how this can be allowed..... surely by law there has to be a cap or these management companies could just pick any extortionate figure from the air?

Any new build developments near you who do part exchange?

I'm in a similar position to you @Haveyouseenthischicken , I own a flat with service charge around £3200 a year and just had a letter saying there's a £350,000 shortfall which will need to be paid as well. Also have cladding that needs to be sorted but I think there is a government scheme to help fund this so the cost isn't being passed on to the owners (but that isn't formalised yet).

What is the lease like on your apartment? If it's 90 years or less, that will be putting off people from viewing the property.

It's a shit situation and I'm burying my head in the sand about it all tbh.

Recently a friend of ours successfully challenged a management company and the proposal to put the service charge up by £300 month. It went up £50 instead.
The residents all got together and wrote collectively and challenged the costs. They complained about the gardeners (and had cctv evidence to support the fact they were spending only a fraction of the contracted time).
Get your neighbours together, get some advice, get an MP on your side
Good luck

Tbh the high service charges for all apartments in London put me off! Many are a crazy amount.

That's so fucking unfair

Don't do it. When we had a flat the whole building had to pay 10k each for works. We somehow got out of that because the old owners did it for us but I thought fucking he'll if we were plodding on in life then got stung for 10k upgrades that I don't ask for I would be in a shit situation. They can get you any time. Not worth morning into a flat for

Form a residents group.
Constitute the group.
Have a meeting with all the owners and then go to the MP.

Flats are always crap because of service charges which spiral out of control but go give your MP a sense of how many voters are suffering in one building.

Sorry for this horrendous position. Some good advice here.

One other place to try might be You and Yours (BBC R4). They’ve done a fair bit on this sort of issue.

I would just get rid of flat at auction and then buy small freehold property. This is legalised robbery and I feel so sorry for you.

Marine Court in St. Leonards has a service charge of £10,000 per annum.

The residents should band together with a solicitor to represent them collectively. Do contact shelter too.

Failing the above, I would definitely just get rid by whatever means possible. At some point, money is worth far less than your mental health and this has dragged you down far too much.

Is there a residents association?
In our flats the ra have an accountant go over the accounts from the management company every year to try and bring the service charge down. They challenge on loads of things and there are always mistakes.

We have just been through this and have gone through the Right To Manage process and our Service charge has magically halved with a new company.

Your life is not over but you’ll need to take action to sort it out

Good luck.

Group together with other homeowners to instruct a specialist solictor, so the litigation cost isn't all on you. You may be able to purchase insurance to cover litigation expenses/risk of costs if you lose, the solicitor should advise you about that.