Management company, deal breaker or not..........close to exchange

[DelGirl]

Am close to exchanging on a flat but today received some previous accounts and an expenditure statement for last year. There seems to be some entries which seem excessive with regards to communal electric and some repairs. If you thought the management company were less than white, would this be a deal breaker given there are more than 10 flats in the block. There are other exenses which the vendor is paying for which is great but they also seem excessive even though these don't directly affect me, i'm concerned about being fleeced in the future. The company appears reputable with over 100 blocks in their portfolio and are RICS and ARMA reg.
tia

btw i've raised these concerns with my solicitor but thought i'd ask you lovely helpful bunch.

Tricky one. We bought in a block where service charge has gone from 2.5 k to 5k due to litigation and other costs. Management co is not transparent and it is causing a lot of consternation amongst owners. We knew litigation would be costly, however, it was not a deal breaker as the flat was perfect and little else was on the market. I think being fleeced is to be expected with this set up.

1

I would certainly google the company's name and see if there are any negative comments about them; or see if it's possible to ask any of your potential neighbours. A management company working at the very limits of what's legal can make life very frustrating.

Also, find out if there's a residents' committee for the block and have a chat with one of the members if possible. A committee was formed in the block I used to live in (about 14 flats) because we all found the management company's agent a real piece of work to deal with. Plus, the annual statement of costs was a bit vague to say the least. Some costs seemed really unlikely - like an annual electricity bill for the block which was almost as much as the one for my own flat. This was despite the fact that the only 'communal' electricity used was for the stairwell lights - which were on a timer switch so never left on for long - oh, and for the cleaner, plugging her hoover in once a week or so.... Others we felt were downright unacceptable, like being charged for repairs to the roof terraces of the top floor flats, despite the fault lying with the builders who had installed them in the first place (a firm which coincidentally seemed to be affiliated in some way to the management co )

Anyway, the committee asked the management company for more justification for certain charges and more accountability generally, and it improved things to an extent. But it certainly left a nasty taste in the mouth and I swore I'd never buy a leasehold property again...

thanks both, gah it is tricky. There is very little in this price range and it ticks all the boxes just nervous about being diddled and all the hassle they can cause. what to, what to do

Management companies stink to high heaven. We have one for our FREEHOLD house (grrr) and have just had to pay our mgmt co £800 for a letter saying it was OK to do our loft extension, even though we already had all the planning permission etc in place and it's a freehold house. It felt like extortion to me - as if they were charging as much as they thought they could get away with without us turning around and taking them to court over excessive charges.

They are, however, unfortunately a fact of life in this country. If you really like the property, you might have to just take this on the chin.

yes I think that too. just done some more googling, nothing untoward and i have just seen a page on their site which gives some info on the staff and directors which is slightly schmaltzy but ok none the less.

I do have another flat with shared freehold but with a management company who couldn't be much better, they are really helpful and take a pittance from us in fees tbh. I shall be sad when the director retires (and nervous).

I'll see what the sollicitor says about my questions and think I will just have to dive in. You can never be sure when you are sharing a building and I do like it (though won't be living there yet)

why is there a management company for a freehold house, do you share communal grounds? The set up where this flat is has houses, retirement flats and this block and we share grounds which I assume the houses have to chip in for.

As far as I can tell all management companies are as bad as each other. I don't know anyone who has ever thought their man co was any good! Certainly the two I've jade at various flats have been rubbish. Even the better one is pretty bad for lack of transparency and arbitrary charges.

For me it wouldn't be a deal breaker if a flat was what I was buying. I would just assume it would be the case for any flat. Also when you get in you can talk to neighbours. If they're unhappy too you have the right to sack the man co and appoint one you prefer (or manage yourself).

My current management co are far more efficient and responsive than the first one but I still get really cross about some of the things they charge and the amount. You can find any number of complaints about them by googling.

I would say if you can't find any complaints online you've actually got one of the good ones

But I've loved living here. The management company have been an annoyance but they haven't made me wish I didn't buy the flat. And they've definitely fleeced me a bit, but nowhere near the capital appreciation on the flat.

Mind you, it's a factor in why I'm desperate to be a freeholder rather than a leaseholder next time :-)

thank you, yes I think I am resigned to buy what is essentially a good flat in a nice development but will still have the solicitor ask the questions if they deem necessary.

There are protections in law for residents who are cheesed off with a management company. Residents together can choose to ditch the old co and reappoint. I think it's called right to manage, and relates to the commonhold and leasehold act 2004. Your solicitor should know all about this.

There are also protections in law to ensure management companies act reasonably and don't overcharge.

Thanks for that information narmada, it may come in handy at some point