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Peverel OM - Shared ownership at Salamanca Place, Albert Embankment - 146% service charge increase!!!

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Monday 29 January 2007 12.18pm
The whole point of this thread is that PEVEREL are charging a ridiculous amount, regardless of sizes of flats or anything else. Why Peverel gets away with it, I'm at a loss to understand.
Monday 29 January 2007 1.42pm
Richard has a good point. Even with a freehold house there are some major cyclical bills: roof, drains, windows, exterior painting etc. It is quite popssible that mainting one of the areas Georgian houses would amount to an average of £5,000 a year. There is always something that needs doing. And I can believe that similar applies to an office conversion such as Metro Central.

The issue surely is what you are paying for routine services, including cleaning of the common parts, or the concierge. Here I understood that the affordable housing sectionn of the development on Albert Embankment has a seperate entrance and does not have access to the communal garden. Certainly not the one that private owners pay a lot for. The point of this should be to enable bills to be lower than they are for the private housing. So worth asking for a breakdown, and perhaps go through item by item to see if you or the HA could take on responsibility for some, eg cleaning. (It has worked elsewhere.)
Monday 29 January 2007 4.40pm

Not sure if you are all just talking about estimated charges or actual charges?

If your actual bills have come in at £thousands, then you should request a detailed breakdown of what costs were incurred. I believe that individual costs have to be capped at £250 unless you have been given prioir notice of the cost, i.e. a major repair (its sometihng like section 20 of the landlord and tenant act).

If you have been given notice in advance then, I guess the large bills shouldn't be that much of a surprise???
Monday 29 January 2007 4.51pm
This is a new building so there should not be large on-off bills, and any that occur should be claims under the building guarantee, so I assume the problem is the routine cost.

Getting the HA to ask for a breakdown and then a group of you going through line by line should be useful. Maybe you dont need fresh flowers in the reception. Or daily cleaning, or whatever they are spending the money on. In tenant run blocks it is sometimes possible to find a resident to maintain any planting, especially if the alternative is high costs. The fact that the affordable housing has a seperate entrance should help this process.
Monday 29 January 2007 4.56pm
It might also be worth someone calling the Housing Corporation. The whole point of Key Workers loands is affordable living.

It woulnd't surprise me if the grant the developers were given from the Housing Corporation had certain clauses attached to it.

I work in a Housing Association and although we don't deal with Key Workers, I know that on receiving HC grant for other reasons there is a whole list of conditions we must comply with?
Monday 29 January 2007 5.09pm
I think the problem is a bit more fundamental from looking at the original post.

As I understand it, in the first year the service charge for the key housing was calculated on the basis of the services that were just used by the key housing (not the reception and gardens).

The Managing Agents now say this calculation was in error and that the wording of the leases requires them to charge everyone on the building the same percentage of the total costs - so the key housing are in effect paying for services they do not use.

If this is right - I seriously doubt it was the intention of the original developer that the key housing should be required to pay service charge for services they don't use.

That said, in the block I live in, the lease actually requires everyone on the block to pay an equal share of the costs of the garage area, even though only 16 out of 32 flats have parking spaces and use those facilities. As we run our own management company, we agreed that only garage users should pay the costs of the upkeep of the garage area. So, Peverel might be right - but it seems to me you need to establish the basis of the costs beyond doubt, before challenging the reasonableness of the costs.

A few suggested avenues to explore:

Your housing association needs to get some urgent advice as to whether Peverel's interpretation of the lease is correct and that they are obliged to divide the service charge equally (but pro-rata) between the flats, regardless of whether they are key worker or private. This won't cost much and I would say it's essential if you're going to fight this. I have seen several examples of leases for key worker housing in private developments, and all of them have made very clear that services for the key worker element are calculated on the basis only of the services being used by those flats - not the whole development.

What does your shared ownership partner say about this ? Can they exert any pressure ?

Who was the original developer of the land (i.e. the person you purchased the land from). Definitely worth getting in touch with them and telling them what is going on. Whilst their immediate reaction may be it's nothing to do with them, they will not want bad publicity along the line of "Key workers priced out of development by *****". Similarly, did they get any public funding when they did the development in respect of key worker housing - if so, that's another line of attack / publicity.

Did you get a report on title from your solicitors when you purchased the property ? This should have explained the basis of any service charges you are due to pay - if your solicitors got it wrong, you may have a claim in negligence against them.
Monday 29 January 2007 5.50pm
Cant believe how much the service charges have gone up at MCH - it still looks less than ideal due to the lack of uniform window dressings (one of the jobs of the managing agents to enforce the lease?).

I lived in MCH a few years back and there were known drugs dealers on one of the floors and it was actually rather handy.

Getting back to the original posting. Surely this is political/press dynamite? The whole issue of affordable housing is sensitive - i suggest writing to your MP, councillors, Ken livingstone the Evening Standard... Some **** will hit the fan. As has been stated it is not just having to pay the exorbitant charges but this will badly hit your chance of resale - i looked at a 3bed in Imperial Court but was put off by the £4k service (24h concierge - feel of a posh hotel - 2 car spaces etc.).
Monday 29 January 2007 7.37pm
The Leasehold valuation tribunal (LVT) has the power to force landlords to alter unfair leases with regards to service charges especially. If anyone has to pay for services they were not warned about or it is not clearly a fair proportion or however the lease words it, then the LVT can not only order a change to a lease but also if requested award arrears! The law has now actually moved to greatly favour tenants rather than landlords, it does require the effort to research and use it, so time for those tenants who are complaining to take action. Take this as a warning for those of you who have arranged the buying out of your freeholds, you have inherited these problems!!
Saturday 10 February 2007 11.52am
Thank you all for your views and thoughts, they are much appreciated.

I might add that it has been reported that re-sale of the flats might be problematic as the proposed service charge is considered large (even if the flats were private, let alone HA) - and may lead to flats being down-valued!
Saturday 10 February 2007 5.03pm
This is all pretty grim. I suspect, reading through the thread, that while everyone on your site pays an estate service charge - the same for you as for the folks in the expensive penthouses - the people who live in the private section have to pay in addition another charge for the services that are exclusive to that building.
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