Are your service charges too high?

So why does it cost so much to live in a block of flats?

Your lease details what you are paying money for and when, whether you like it or not! For example, you may be paying towards a lift despite living on the ground floor because it is written in your lease.

Your lease will also describe the frequency for cyclical site maintenance. Unlike owning a self contained freehold property, you cannot delay works because you don’t have the money. There is an obligation to carry out the work and your annual service charges should include a reserve fund (if allowed) to enable funds to accumulate to meet many future requirements.

For some new build flats initial service charge fees are unlikely to reflect the real ongoing cost of maintenance once the warranties run out Developers build flats to sell and the initial service charge costs quoted must not dissuade potential buyers.

There are many mandatory requirements you would not think about in a private freehold property, but can have a direct impact on cost. For example health and safety compliance, and maintenance required by insurers.

The methods required for residential block maintenance mean managing agents cannot always use the same contractors as for private freehold properties. Managing agents have a duty to ensure contractors have proper insurance, comply with health and safety and have the knowledge and expertise to carry out the work, especially when working at height.

What can be done to help bring the costs down?

Much expenditure occurs on minor repairs and maintenance that could be avoided if residents took more care. The bill for reactive repairs cannot be accurately predicted when budgets are set.

Regular, planned maintenance is the best way of keeping unexpected costs at bay. For example, regular maintenance of equipment can prolong its useful life and limit expensive call outs when they do fail.

Spread the costs of large scale projects evenly over the years via reserve/sinking funds.

Finally, talk to your managing agent! Flat living is about a partnership. Managing agents need to know when things go wrong, as they don’t live on site and may only visit on a monthly or weekly basis. The faster issues are reported, the easier and cheaper they are to fix, reducing the impact for everyone involved.

David Goldberg is Head of Estate Management for Chesterton Humberts.