About the service charge

Hi,

I think you all received the letter, demanding the service charge by the Adderstone Estate Management Limited.

In the letter, they said they will start the management from 1 July, but they demand the service charge from April 1, which means we pay the service charge (175.23) for three months for nothing. So, I wonder if you think it is reasonable, or they just spread the total amount estimated over the months ?

Comments are welcome.

Hi,

I've also been looking at the demand letters.

The 1st one says £175.23 for Period 01/04/2010 to 30/6/2010.

The 2nd says £351.43 for Period 01/07/2010 to 31/12/2010, but also brings the 1st one onto it as a balance brought forward of £175.23 making £526.66 in total asked for.

Making £701.89 in total if both paid as they are.

I am planning to email them about this and also it ask if it's possible to pay by monthly standing order, as a monthly fee will be easier to budget for.

Hi,

I have also had a look through the letter, I think basically it is going to cost just over £700 for the annual fee. when we 1st purchased the flats the management company was the McDonald partnership who charged £46 p/m so £552 per year which also included the buldings insurance. This makes the £700 per year without insurance look very expensive. I also notice that they believe they are going to receive all the money from all 18 flats. With some of these flats being unoccupied (1 of them on the market due to repossetion) then I am certain that they will not receive the money from all of them.

What happens then??? I no that the Powerminster Gleeson asked for a payment of over £500, which i paid and later found out that not many had and they subsequently terminated their sevices, with myself and whoever else paid well out off pocket as they did absolutely nothing on the flats. I questioned them and asked them on several occasions to send me the statements on what actually took place which they failed to do. My guess is that they probably used the money that they did receive on buildings insurance for all of the property while they were the management company and did little else with any remainder.

Obviously once bitten twice shy comes in to play, I do not want to be forking out all that money unless they are going to be receiving all 18 payments and I also want to see some results i.e. locks fixed, bulbs changed, carpets cleaned etc.

I haven't brought the letter to work with me but I plan to contact them to see what happens if they do not receive the full payments from everyone.

I do not know what everyone else's thoughts are regarding the charge, but I think it is very expensive seeing as though it doesn't take into account the buildings insurance.

Jason,

Very good point on the monthly repayments, as a smaller monthly fee will be easier to budget for.

Cheers.

Hi everyone,

I share in your concerns Steve. I always felt a bit hard done by when Powerminster Gleeson were responsbile for the building. Ultimately it is up to the management company to get payment for the repairs and upkeep of the building from each of the tenants. The payments we make individually should not be used to subsidise the people that they are unable to obtain payment from.

I would be much happier to pay on a monthly basis on a standing order as it will help to cover us against paying the full amount and risk losing that amount if the management company choose to move on.

I reckon that things should work more smoothly with the management company now that the freehold has been bought out. The new owners of the freehold will oversee things much more stringently than when Hazel Homes went out of business and stopped taking any interest in the property.

It will just be nice to get the building tidied up as far as I am concerned.

Thanks again everyone for the discussion. I'll be keeping a close eye on this forum.

Charlie

I sent an email on Sunday at 9:30pm as follows to Martin Knotts at Adderstone Group :-
----------------
Hi Martin,

I live at Primrose House, Cuthbert Bank Road, Sheffield and have received the invoices as regards service charges. However I have a couple of questions :-

1. The 1st invoice with a demand ref of 13324 has a due amount of £175.23 for period 1/4/10 to 30/6/10, then the 2nd invoice with demand ref 13325 for period 1/7/10 to 31/12/10 has £351.43 but then brings forward the previous invoice as balance brought forward £175.23 making for that invoice £526.66. I take it that if the 2nd invoice is paid at £526.66 this covers in effect both invoices and the £526.66 total on the 2nd invoice is only if the 1st invoice hasn't been paid.

2. Would it be possible to pay by monthly standing order, as this would be easier to budget for and would be an automatic payment monthly rather than a bill every 6 months.

Yours Sincerely,
----------------

I haven't heard back as yet, but will let you all know if I hear anything.

An interesting part of the Living in Leasehold Flats information is that in What are service charges section, it says that most modern leases allow the landlord to collect service charges in advance, repaying any surplus or collecting any shortfall at the end of the year.

Looking at Estimated Expenditure over 15 months, do we have emergency lighting that needs testing and maintaining at £700 a year. Will it cost £1,200 a year to maintain the smoke alarms etc.

Anyway we have over 3 weeks till 24/04/2010 before we need to pay anything, so hopefully we can sort any problems or fears out by then.

hi,

r there any upper limit for service charge? can they charge what they want?

when we bought the apartment, we were told that the service charge will be around 50 per month, we think it makes sense. But now, for the building size like ours, I don't see the point of paying that much, and it excludes the building insurance already.

And I am expecting them to say, its an estimation based on our experience, blablabla.

can we be united and huggle the price down?

Hi,

In the Living in Leasehold flats guide section about What are service charges, it says Leaseholders have powerful rights to challenge service charges they feel are unreasonable at the Leasehold Valuation Tribunal, so I imagine they can't charge what they like.

I think an important bit, also in the same section of the guide, it says about repaying any surplus or collecting any shortfall at the end of the year, so hopefully this means if the estimate is high then we would get a refund or the service charge lowered.

I still haven't heard anything back from Martin Knotts about the invoices or paying by standing order.

I would as I think everyone would prefer to pay by monthly standing order as it's less cash upfront in case of problems. I think this is the normal way to pay service charges as it prevents leaseholders having to find larger amounts, hence it also saves on the amount of non-payments and it's automatic each month.

Not sure we can haggle to much at this stage as estimates of expenditure are just that, but hopefully if too much is paid we can reclaim overpayment.

As regards estimates, has anyone got any accounts from the previous management company regarding their expenditure as this would naturally give some indication of expenditure.

Hi everyone - we definately agree about prefering to pay the charge on a monthly basis as you have raised that if they management company don't do what they are supposed/end their contract at least we won't have laid out £700 and struggle to get it back.

I don't think the fee is too bad (compared to Powerminster Gleeson) as the £46 that we used to pay was 3 years go (although this did include the buildings insurance) but i certainly don't agree with the proposed £1500.00 for smoke alarm maintenance & repairs (cant you get free smoke alarms from the fire service??)

I would also be interested to know when the cleaning & repairs will start. If we are paying them from 1st April i would hope to see some cleaning start next week. I will try & call them tomorrow.

Anyway, I have found the original budget when we moved in 2007:

Accountants £500.00
Bank charges £75.00
Cleaning £1950.00
Communal electrcity £500.00
Gardening £1500.00
Insurance £2025.00
Repairs allowance £250.00
Sinking fund £500.00
Sundries £50.00
Window cleaning £1000.00
Sub total £8350.00
Management 15% £1471.69
Total cost £9821.69/18 flats = £545.65 per year

Thanks
Kate

hi everyone,

I'm glad I'm not the only one who thought the smoke alarm fund was ridiculous. There's no way I'm paying for that and I also think the other charges are far too high.

As a single occupant you can't really fight the charges but if we unite and all disagree and perhaps find our own management company? we'll have a better chance of not getting ripped off. I must say I was actually quite annoyed when reading this 'bill' especially with the costs so high, the landscaping charge actually made me laugh seeing as i can rake pebbles myself. Anyway...

I hope everyone is in agreement that this is too much and we don't have to pay it! I'll try getting in touch with them too and see what they say to justify their costs.

Renee Flat 10

HI,

Thanks KATE for providing the 2007 budget, I can't see the point of their estimation increasing hugely above the inflation.

I also wrote them by email on last Sat complaining about the SKY signal issue for our flat, and got no reply since then. Can't help wondering what they are doing? The communication is bad.

We will see what happen next. If you don't sort out our problem, no way are we going to pay you.


Yikun

£1500 for the smaoke alarms is a crazy amount of money. There can't be more than a couple of them on each side of the building. It is a professionally installed system that is connected to the mains power (I believe) so there should be no need new batteries or anything other than occasional checks.

I do seem to remember that the 3rd floor back block fire alarm was damaged a few months ago so potentially they may be factoring the cost of fixing that into the total. Either way it is still a huge amount of money for not a lot of effort on their part.

Hi All,

Ok going down the two lists the new one and one provided by kate maybe the following would be a good estimated expenditure and allowing for different time frames 12 months vs Adderstone's 15 months, will adjust both to 15 month time scales :-

Standard Maintenance
Cleaning and caretaking - both have similar values so £2312.50 isn't bad,
but it maybe high how often would it be done and what did it cost Abi last time. 2312.50
Window Cleaning - quarterly seems ok 450.00
Landscaping - both high lets call it £250 to be kind 250.00
Total 3012.50 not much lower than before

General repairs/Maintenance
General repairs/Maintenance - one is 250 other 1250, hard to know this maybe
900 a good figire 900.00
Electrical repairs/maintenance - had to say call it what they say 437.50
Emergency lighting testing and maintenance - what emergency lighting 0.00
Smoke alarm maintenance and repairs- hmm 1500 to test for faults and repair, how
hard is it to press a test button, maybe it has to be tested call it 100 125.00
Smoke ventialiation Maintenance - think this must mean windows on
landings, 437.50 to have them checked etc somehow 100 125.00
Total 1587.5 this is a lot lower than 4500

Other
Electricity- Common Parts - one is 500 the other 1000, lets call it 900 900.00
Reserve Fund (Sinking Fund - one is 500 the other 2250, lets call it 1500 1500.00
Total 2400.00 is 1000 lower

Administration
Management fees - call it 15% of all other totals to be worked out at end
15% of 7375.00 1106.25

Audit and Accountancy costs - 350 seems ok 350.00
Postage- seems ok 25.00
Sub Total exclusing management fee 375.00
Total Admin total including management fee 1428.75 is a lot lower than over 5000

Main Subtotal 7375.00
+ Management fee = Grand Total over 15 months 8481.25
Over 12 months would be 6785.00

lol what do people think. Hope I've worked it out ok :). Sorry about text format it's ok here

that seems reasonable, so would that be 449quid a year each? though the smoke alarm i dont think we should pay them for any of that, we could do with everyone getting together and us all coming up with a list of needs and what we think they cost and then presenting that to the company i think?

also in the bill is a section -

Where can i get advice?
---The Leasehold advisory service, 31 Worship street, London, EC2A 2DX
tel:0845 345 1993 or 020 7374 5380 fax:020 7374 5373
email: info@lease-advice.org website: www.lease-advice.org

incase anyone wants to contact them?

Hi,

Just realised figures need a slight adjustment as think Kate's figures are for 12 month and Adderstone's are for 15 month. It doesn't make a massive difference though, but I'll have to seasonally adjust them as they say :).

I'll do it later tonight and edit original post.

i say we all grab a hoover and a wash cloth once a week and be done with it! lol we've managed this long without them! haha i wish

Hi All,

Has anyone else had a go at working out reasonable expenditure. I don't think my figures are too bad, but it's always nice to have a second opinion.

At the very most based on having lived in a previous flat I don't think we should be paying more than £45/month as in my previous flat I paid that and they had gardeners nearly everyday due to extensive gardens which where a big expense.

I think we need to get some decent figures prepared and as Renee has said present it to the management company and ask for a review of the expenditure.

Also try to get a monthly payment system setup. Anyway fingers crossed we as a group can get something done.

Hi All,

Has anyone got any updates ?.

Hi everyone - i got this reply from James on Thursday. He was visiting our site on Friday 9th & cleaning is due to start next week from 12th. James' responses to my questions are **


Kate

I apologise for the delay in response to your email.

I have provided my response to your queries inset below.

Abigail has made me aware of the various queries raised on the residents forum and I am happy to go through the various points with everyone; I appreciate there have been issues with management of the building in the past and as such I will satisfy queries in a prompt manner where possible however our priority is that the building is managed correctly and in a safe manner. The demands we have raised are based on a budget we expect will be required in order to operate and maintain the building, compiled following our inspection of the property and our experience in estate management. We will not know how the building will perform in respect of expenditure until a full financial year has passed at which point the initial budget will be reviewed and adjusted accordingly; please note that all monies demanded are held in a client account and are used on actual expenditure.

I note from comments raised in the residents forum that there have been queries raised in relation to emergency lighting also; there are a number of emergency lights in the building (these appear as normal fittings also) which require regular testing and maintenance.

I will be visiting Primrose House tomorrow in order to instruct various contractors but I will be happy to meet with any leaseholders also.

Please do not hesitate to contact me with any further queries you may have.

Kind regards

James T Atkinson BSc(Hons)Surveyor/Property ManagerAdderstone Estate Management Limited


Hi James - i called you today & left a voicemail as i have a few questions about the services that we are paying for. I will probably be unavailable to take your call next week so i thought i'd send you an email with my questions/concerns

As your services start from 1st April, could you tell me when we would expect to see the cleaning & repairs started?
**Cleaning is expected to commence next week (week commencing 12th April 2010)**

How frequent will the building be cleaned?
**The building will be cleaned on a weekly basis with for approximately 2 hours, 1 hour per block.**

Do you have keys to the electric meter cupboards as i believe that is where the communal plug sockets are (the cleaners will need access). I have a copy of the key for the front block should you need it.
**Last week I received various keys from the freeholder following their purchase of the development. I understand this has keys to various cupboards within the building and I will be testing these when on site. I am aware these will be required for cleaners to access plugs sockets. Will you be at the property at any point tomorrow in the event I require the key copy which you have suggested? This could be left in the gas box for your property if you are unavailable.**

The handrail that is missing on the 1st flight of stairs on the front block is also stored in the meter cupboard.
**Thank you for this information. We will be refitting the hand rail as soon as possible.**

I am also concerned about the £1500.00 (£100.00 per month) charge for smoke alarm maintenence & repairs - please can you explain why this is so high?
**I have inspected this system along with electrical contractors. The system is understood to be mains wired and linked which qualifies this as a fire alarm system; this is confirmed by our recently completed fire risk assessment. As such, we are required to periodically maintain the alarms and also test these on a weekly basis (testing must be completed by a competent person in line with regulation). Please note this figure is, as the other items, a reasonable estimate and does include for the repair of at least one smoke alarm which is damaged at present.**

A swift response would be appreciated.

Just to let you know that our experience with management companies for our property has been bad in the past so if you could keep in contact with us or at least acknowledge letters/emails whilst you are looking into matters that would be great. Unfortunately alot of us have paid maintenance charges before & the company has not fulfilled their obligations and we have been unsuccessful in getting refunds so we are all quite hesitant to pay all this money up front without fully understanding what service we should expect.

**Unfortunately we have received no information from the previous freeholder or any agent they may have appointed to act on this building. We have no choice but to address this as a new property as no history is available however please be assured all monies paid will be fully accounted for and our instruction on the building is for the foreseeable future. As suggested I am more than willing to address queries with items featured in our budget however payment must be made in order for our programme of works to proceed as planned; all demands raised have been done so in accordance with the terms of the lease and we are keen to get off to a positive start.**

Thanks
Kate Storey

Hi All,

Thanks for the update Kate, it's made things clearer.

I think when James was here in Feb, I gave him my electric cupboard key (back block) and he took a copy.

I haven't heard back from Martin Knotts as yet as regards the invoice payment queries and paying by standing order but will chase this up.

I have to admit regardless of upfront costs I really do prefer paying monthly as it's kind of the norm to pay bills monthly either by direct debit or if that's not possible standing order and is how I've paid service charges in the past. I'll email James about this and see what he says.

Hi All,

I've just received the following reply to my email from Martin Knotts :-

Link to my letter to Martin is https://primrosehouse.forumotion.com/back-block-f4/about-the-service-charge-t29.htm#178 .

-------------------------------------------------------------------
Dear Jason,

As per your point 1 below, I can confirm that the amount £526.66 does in effect cover the period 01/04/10 – 31/12/10.

As per point 2, we are able to accept monthly payments for your service charge. The monthly payment required would be £58.52 if the above charge is spread over 9 equal monthly payments. (starting April 2010)

Can you confirm by e-mail if you wish to pay your service charge monthly by standing order.

Regards,

Martin Knotts

Accounts Manager

Adderstone Estate Management Limited
The Exchange
Manor Court
Jesmond
Newcastle-Upon-Tyne
NE2 2JA
Tel: +44 (0) 191 212 5030
Fax: +44 (0) 191 212 5031
Web: http://www.adderstonegroup.com
--------------------------------------------------------

I've replied back saying I would like to pay monthly, either by direct debit or standing order.

hi all, thanks to everyone for getting involved with this by the way, but i still feel the charge is way too high for the service they'll be providing. I think they're ripping us of and I for one am not getting ripped off. The fact they are charging us from 01/04/10 when they've not done anythin yet is a joke, there's still 3 lights not working and the smoke alarm, so what are we paying for exactly?

anyway, i'm not sure about the rest of you guys but i know we dont have to pay all they are asking for so i'm still up for sending them the revised bill Jason came up with, and i still think thats a tad too high!

Serioulsy though, we've lived here and looked after this place for years and PAID for everythin ourselves, i'm not givin a penny of my hard earned money to any scammers, and i'll ring them tomorrow and tell them so, rant over lol :-s

ps if the fire alarm thing is such a big deal and they need a special inspector/engineer (whatever) how come that wasn't in the last management company's bill? and as Jason said he lived in a place with lots of gardens but all we have is pebbles -no need to landscape pebbles...anyway i'll let everyone knows what comes of the conversation

Renee

Whats everyone's thoughts ?

I have to admit from a previous post where it said about a client account to hold monies and those would be used on actual expenses, has lowered my concerns a bit.

However the management fees are quite high when the previous management company charged 15% on top of expenses as a management fee.

I'm popping out tonight and some of the people I will be seeing do accounts and legal stuff and they'll probably know a bit. So if I ask nicely they might look over the estimated charges etc as a favour :).

Yep think we have to get things right as no point blindly paying over the odds. Don't want to rattle the management companies cages either though :). I'll see what my expert friends say tonight.

sounds good, lets see what your friends say about it all, we'll be on a better position then :-)

Nice work guys,

I am more inclined to pay by a monthly standing order, rather than an upfront payment, then we can assess how much work is being done on a monthly basis.

As for the amount, I am also in the oppinion that this is far too much, £12 more per month that we was originally supposed to pay the MacDonald partnership and that included buildings insurance, whereas this one doesn't.

I think we have to all make a joint decision on whether we pay this amount, as if some are and some arn't then it's not going to work, if everyone is ok to pay the amount monthly then I shall too. I am still unsure that they will receive the money from all 18 flats though as there are only 10 of us on this message board, if they don't receive it from all then what happens then? Are we in another Powerminster Gleeson situation where they stop working on the property and subsequently the people who have paid lose out?

Any thoughts?

Cheers