AIBU to nearly faint at management fees for Newish flat??

[Smallhorse]

Looking to buy a flat in Leeds.

Found one I love. I might just be able to afford it ...or so I thought ...
2 beds, 10 yo high rise building (15 floors)
Has lift and consierge.

“Management fees “ - £250 / month
WTF???
Plus residents factor fees £30/month

Is this normal ? Am I mightily out of touch ?
Ps having to bow out of buying this flat

My parents looked at a ground floor flat recently that had fees similar. When they questioned it they were told it was so high due to having a lift and having to pay a maintaince contract for the lift. They pointed out they'd be in the ground floor and not using the lift, but obviously they were laughed at. And they didn't buy the flat! Find somewhere without a lift and it should be cheaper!

I would avoid all new build flats as they charge exorbitant service charge. Look for a flat in an older building. Don’t even view the flat until the Estate Agent has told you what the service charge is. We own a flat in London in a block that was built in the 1970s and we pay £70pm.

Legally, there is a right to manage that leasehold flat owners can get together to do and you can sack an overpriced management company and choose who you want to do the managing. We did it. Then also once above a certain number of flat owners in your block you can also get together to buy freehold. There is a legal right to this too.

If it’s a new build yes. That wouldn’t raise an eyebrow in London.

This is a common racket. That and 95 year leases that need renewing every 15 years for a small fortune.

I'm a leaseholder in such a block. I'm also a director of our management company. I became one to help control our service charge costs but there is only so much you can do.

Our fees are similar but if you look at the budget the money is all accounted for : concierge 24/7 = a lot of money (we don't have 24/7)
Lift maintenance
Cleaning
Sinking fund
Regular checks on dry riser/smoke venting system
Fire Risk Assessment
Maintenance of door entry system
Maintaining our small bit of garden
Building maintenance - light bulbs, locks on cupboards in communal areas that seem to often get broken so people can store their belongings in beside the electricals (massive massive fire Risk)

Our block has on occasion been stung by overly expensive contractors- £250 to change a light bulb was a low point and contractors who do have half assed repair and then charge to rectify it. As directors we are now really pro-active about checking quality of work but there is stuff we canny check eg. Our abseiling system needed replaced. I didn't go up in the roof to check the eye bolts were correctly attached.

In addition everything needs to be done by insured/qualified contractors - stuff I would easily do inside my flat eg. Changing light bulbs needs to be done by a contractor as I'm not insured to get on a ladder on the communal areas.

Running a big building is expensive.

Oh and finding a reliable managing agent would be awesome.

I've worked with 4 now and they have all been fairly terrible.

Our block is unusual but not unique - we have a leaseholders company and employ our management agents to look after the day to day running of stuff.

I'm a director of the leasehold company and my neighbours and I who do that do an enormous amount of unpaid work that benefits everyone.

If you live (or own) in such a block pay attention to what goes on. We currently have an opportunity to save loads of money by gaining the right to organize our own insurance. At present that lies with the freeholder. My neighbours and I have spent HOURS trying to get primarily non resident buy to let landlords to return the paperwork to us. We are looking at a saving of around £500/ flat/ year which is a significant chunk of our annual service charge.

It is often the tenants in the rented flats who unthinkingly do damage to communal areas e.g. Jemmy locks off cupboards in the communal areas to put their stuff in, or trail paper shreddings from a leaking bin bag throughout the block on the way to the bin cupboard on the day after our weekly clean has happened.

I pay just over £250 a month, and I know I'm not being overcharged, because the management company is run by very competent residents.

That is for a three-bedroom flat in London. The charge was half that just before I moved in, but doubled when the building was coming up for fifteen years old, as it needed a roof replacement. (The new one will hopefully last quite a bit longer.)

There are newer, more conventional (easier to maintain) buildings being built all around me, and they have higher charges, even from new.

At least I don't have to contribute towards lift maintenance as only the flats that use the lift have that part written into their lease.

The moment you found it had a concierge you were going to be charged a lot! Say 3 full time employees on a shift system, plus someone back at the freeholder's office to administer their tax, NI, salaries etc. That's 100K right there. Plus maintenance, cleaning, ?gardening?. Someone to check all is well, administer your leases etc. Being a freeholder is a lot of work. Even when nothing much needs doing you still have to pay someone to check that nothing needs doing.

In order to run a full shift system (which is what 24/7 concierge cover needs you need a minimum of 6people to cover holiday etc.

Most blocks get concierge staff from a third party contractor which work out about 50% more expensive/hour than a direct hire but the provider company bear the recruitment, vetting, HR, payroll, maternity/sick leave cover costs.

Concierge services are awesome but you need to live in a big development for them to be remotely affordable.

Thank you all so much. It’s a freehold property.
I’m bowing out and quite sad about it as I thought I’d found the perfect placec

this is a similar flat

Ok I have a friend who is an estate agent in Glasgow.
Apparently this flat has very similar monthly fees - about £250 management fee and factor fee of about 25/a month.
It’s factored by the residents, not an outside company.

And it’s expected to fetch about 190k

Probably best decision to bow out...... however, a flat in a 15 storey building will not be freehold. Maybe a share of freehold but that is not the same thing.

We were about the same for a 1 bed in Cardiff. It had a concierge, gym and swimming pool which is why I think it was so expensive.

That seems fairly standard for a doorman building with a lift in a metropolitan area. Put it this way, would you rather pay half that and the lift goes out for weeks at a time?

I viewed somewhere last week with monthly fees of £1.5k. It was a one bed. Ye Gods.

I wouldn't buy a residential flat that had service-charges at this sort of level (property lawyer). In fact I wouldn't buy a residential flat at all tbh

Redastherose, why would you not buy a residential flat?
Thank you and everyone for your advice.
It’s been eye opening

That Glasgow flat - there are 61 apartments in the building .
That means maintenance charges are £183,000 for the whole property for a year !

I wouldn’t either redasrose (also a property lawyer)

In essence small - hard to control escalating costs; equally hard to ensure building is properly maintained which means you are at greater risk of depreciation etc.

I pay £200 a month with no lift or concierge so for me that would be a good deal!

Check what it includes though OP - mine includes water and buildings insurance so that's a fair wack each month.

mine is £280 / month over 10 months, it includes a lift (i'm on the 8th/top floor - not penthouse!) water and heating plus landscaping of the outdoor space maintenance, communal area cleaning and a sinking fund plus buildings insurance which was at one point astronomical due to several water leak claims from shoddy plumbing. I'm in London and very close to several tube stations and many bus routes so hopefully despite the charges it wont be too difficult to sell

True - but if you have a major repair, you only have to pay a fraction of the cost.

Buy a freehold house, need a new roof or damp proof course or heating system a few years down the line, or have problem neighbours who also own their freehold so there is no common landlord/clauses to control their behaviour (a bit anyway!), and it's all on you.

Basically, any property can be a bitch!!

I wouldn't do it OP. I was flat hunting a few years ago and came across similar service charges and its just too much of an extra bill every month. You're paying for the lift and maintenance and not really getting the value back.

Personally I would keep looking. Think what more you could do with that money.....good luck in your search.

Exactly what NeverTwerked said, you can end up paying thousands a year out for very little real benefit as a lot of it doesn't actually go on maintenance and repair of the property but on 'management fees'. It really depends on how the Lease is drafted but it is often very difficult to complain or dispute what are unnecessary expenses. In addition if the Lease when originally granted is only for 125 years then in reality that means that by the time the Lease has been running for only 45 years mortgage companies won't touch it unless you buy a Lease extension (further expense). Just not worth it.

You buy a freehold property and maintain it to an adequate standard and you will, most likely, only be paying a couple of hundred out a year in general maintenance costs.

For comparison, we are outer London, in a group of 18 terraced houses and 16 flats, situated in a park with old trees etc. the houses are freehold, but the park etc is leasehold. we pay around £50 per month for the private road, park upkeep and shared outbuildings upkeep. not too bad