Service Charges

Posted on June 29, 2016 by Mark Batty

If you own a flat or an apartment it is most likely that you are obliged to pay a service charge – a charge for services. Nobody likes paying these charges, not even me.

I console myself by looking at what it costs to keep my own house maintained. There always seems to be some job to do, whether it’s cleaning out gutters or painting the windows – it always costs me money. It’s a service charge in another guise.

These service charges are administered by the managing agent, under strict direction of those individuals who are responsible for looking after your building. These people are the appointed directors of the management company, usually fellow owners/leaseholders. There is a distinct difference between a managing agent and a management company.

In many circumstances the managing agent is appointed by the freeholder, which only has an interest in collecting ground rent and not how the building is managed. Unfortunately the freeholder has the ultimate say and not the flat or apartment owner.

To give you examples, there are some easy ‘wins’ if you know what you are doing and are in control. Question why you are paying so much for buildings insurance, electricity, accountancy fees and the like.

Next month, I shall explain what you can do to beat this archaic system and gain control of your own destiny when it comes to looking after your building and the level of service charges you need to pay. The good thing is that you can gain control if you are prepared to rally a few other owners and seek advice from managing agents that know how to beat the system.

This week, I shall be replacing my fence at home – another cost!

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