Rent and service charges
24/07/2012 5:37 pm
If this is a repeat,sorry I pressed send and it didnt go through.So here it is again.
Does anyone know the correct legal answer,to strengthen my case.
Rent.for the last 3 years we have had rent increases of RPI plus 1/2 %that was supposed to be till they met the "Target" rent by 2012.I have asked the so called managemnt what it goes up by now and have blank expressions,one said it could go up 10% next year.Please someone tell me what they are allowed to do now after this 2012 target.
Secondly as i have metoned on the openess discussion,I am now told my service charge breakdown that we have had previous years wont be given to us,only the part owning leaseholders in here.They are not obliged to show us we are told.Plus the balance and distribution are all unfair,based on so called flat sizes for renters.you pay more for gardening costs if you have a 2 bed on the first floor than a 1 bed with patio and garden access with patio doors on ground floor.the same with all communal facilities.The same for leaseholders i believe.
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25/07/2012 10:52 am
Hi there, the basics are as follows, under the Target rent regime, Target rent is increased by the previous Septembers RPI + 0.5%, rents that are lower or higher than Target are increased by the same percentage plus or minus up to £2 with the view that rents shoudl be at the Target rent by 2012 (Ask if your rent is at target - if so your increase should be previous septembers RPI + 0.5%) - NB: There are a number of organisations that were granted extensions to the Target rent period - i.e. do not need to meet the Target rent until a later date.
Service Charges: Charge by property size is more common in the private market, however, if you signed up to a service charge where this was the basis of cost apportionment from day 1 you will be stuck there - as you agreed to it when you signed up for the tenancy.
I would guess you are being charged a "fixed Service Charge", if it were variable you would have more protection - however, they still have to provide a budget & and breakdown of previous expenditure - of course they have to show you a breakdown of what you are being charged for. Check your tenancy agreement to see what type of service charge you are paying and what services were included in the charge when you first took on the property - NB if it should be a variable charge please post again and I will provide further advice.
25/07/2012 8:04 pm
i have had a problem tring to send a longish message of all the details which I would like you to see,but it keeps saying page not found and i had to retype it over and over.In the meantime I can confirm its variable,but I need to give you more details.I will try again later
25/07/2012 8:23 pm
when we signed up and joined in march 2009 it said on our ;felong tenancy agreement tha we agreed to variable service charge,but not how they were allocated.We got a breakdown in April with the next years demand.but we were no told about the leaseholders accounts and what they paid,illega; apparently.In 2010 i was told they were increasing my service charge by £92 a month,(i currently pay £200 a month just in service charges.I found out fom a friendly leaseholder that they had been given a rise of £5 a month! I was told if u cant afford it leave or claim benifit.The leaseholders have to pay 0.9% of resale value for every year they have been here if they leave for the sinking fund.Works out at approx £1200 for every year.I think someone complaied they should try and get something off us even though renters dont pay a sinking fund.So they said my increase was for depreciation.After months of worry and being shown other places they had if we wanted to transfer,but we didnt like them.after legal threats etc they agreed to restructure the managers salary. (i will send this in parts as i take a long time to type and i think that is why it failed before)
25/07/2012 8:38 pm
The managers salary was allocated out of 20 hours a week,5 hours to 18 leaseholders and 15 hours to 8 renters.The difference was we paid £9 a week for a pull cord alarm and some renters are telephoned each morning by her.The leaseholders were no obliged to have anything,after pointing out she spent just as much time with them on general day to day stuff,they reduced the allocated hours to 50% for 8 tenants and 50% to leaseholders.This so called care is checking what meds we are taking once a year,the alarm service has been reduced to £6 a week now.Early this year we were told the council had reduced some subsidy to the managers salary,so renters srevice charges would now show costs to her take 50% of all our charges,but not of course leaseholders.When asked how everthing was paid in the remainder,they said we re arrange varoius pots,so you wont get amassive increse.It came in at approx 8% for total rent plus servc chg.But we would not be allowed to see the breakdown.They say service charges are split into 8 parts for renters,18 parts for leaseholders.
25/07/2012 9:20 pm
I pay £40 a month,rent +svce chge more than a fellow renter as his is supposed to be 2. sq metres smallerwhen I say I dont agree they say also mine is bespoke cos I have velux windows,which only make it hotter anyway.
I was given a sheet a couple of years ago it reads When the governmentintroduced target rent regimeit recognised that landlordsneeded some flexibilityin setting rents because of the different costs of maintaing properties therefore it indicated that landlords are able to set rents as
25/07/2012 9:26 pm
5% above or below the target rent for general needs properties and 10% above or below the target rent for retirement and supported housing properties.When I asked as senior manager at a meeting last week to explain this,she said yes we can put it up 10% next year.Please tell me she is wrong and what legal refernces can I qoute.sorry its so long this
31/07/2012 10:44 am
Hi there sorry for the delay - Rent - it is correct that rents for General Rented are permitted to be 5% above Target and for Sheltered 10% above Target - I would ask the following - what is the Target rent for your property, will they be apply the 5-10% on top of target, this shoudl let you know where you are. The increase should for this year should still beas per the target rent formula, which allows for a maximum increase of the previous september RPI + 0.5% + £2, in respect to legal references this is awkward as its government policy rather than law. They should be able to advise what your rent increase will be now and break it down as above.
31/07/2012 10:52 am
Service charges: If it truly is a Variable charge then they are obliged to provide you with the previous year(s) accounts, which must be provided at the latest 6 months after the end of the financial year, you can also ask to see 6 years backdated accounts.
A variable service charge is defined in the Housing Act 1985 and the Leasehold and Commonhold reform act 2002.
I would also question what you have called a depreciation charge, as under a variable service charge this does not work too well as you can have sinking funds and reserve funds, but a flat rate charge for depreciation is a little odd.
It sounds like you are being charged a support charge also, I would be interested in seeing the split of costs assigned to support as part of the budget setting process.
My main advice would be to request accounts, try to understand how the charge is worked and ask further queries from there in.
Please note that under a variable charge and over or under charge should be refunded/charged or carried forward to the next year, your description makes no reference of this?
31/07/2012 11:39 am
Thank You anonymous,I have now been told,thanks to qouting landlord and tenant act section 21 on disclosures,(as I was advised),that they will send me a breakdown,as it was overlooked.But all their hundreds of other people on fixed charges,wont be shown,as they never have been and dont confuse them if I speak to them.
As you point out,I suspected when they said it 2 years ago about depreciation,that some leaseholders here were jealous the renterswe were not paying into a sinking fund they only pay their sinking fund when they leave. as they pay 0.1 % of sale price for every year they have been here for their sinking fund.I think they complained ,I have no proof.My solicitor said renters do not pay sinking fund so they reworded it.but it was lowered and that has not been mentioned since,except yesterday I was told it was depreciation at the time.I really appreciate your help,can we keep this thread open on this please.
31/07/2012 5:57 pm
Service charges are audited, you are paying what it costs to maintain your building/estate.
Please note, if you and your neighbours want to keep costs low - simply minimise the services required by cleaning up yourselves, not graffiti painting, not urinating in lifts, not smashing windows or breaking locks - the list goes on.
31/07/2012 6:26 pm
I dont live on an estate,I live in a 3yr old retirement scheme,19 own there flats,or parts of,and 8 people have decided to rent,for one reason or another.The sceme is run by a housing trust.The vast majority are ex business or proffesional people.Everyone has been a home owner.We dont live on an estate,we live in a high income residential area.Not everyone who enqiures on here,lives on a sink estate with graffiti.Renting does not equate to taht.We know what service charges are for,the average service charge is over £200 a month.The unfairness has been the renters havent been given accounts.But the latest news is they will beSo end of.
01/08/2012 6:25 pm
I would like to contact you when i get the accounts.Is there a way to do that apart from here.
02/08/2012 4:25 pm
Thanks for that.I was told that because I share or pay into a variable service charge with the leaseholders/part owners then I would get them now.Still waiting.
But all the other schemes they have that are all renting and on fixed service charges are not to be shown,they say they are not legally obliged to show them to people on fixed srevice charges..As I dont live at the other schemes I am not affected.My question is are they correct.(this will be one of many questions as it rolls on,I am afraid),but extremly grateful.
03/08/2012 10:53 am
Hi there: fixed SC advice
Scrutinising Fixed Service Charges can be a little challenging because techinically there is not legal definition of a "Fixed Service Charge", in essense what the term means is that each year a Service Charge costs will be "fixed" each year. There is no obligation for accounts to be audited and provided to tenants, however the annual budget (i.e. the fixed charge for the current year) should be made available.
From the budget you can query provisions and charge amounts, but this would be in the form of asking about contract prices and the service provision, querying the basis of non-contract budget items and charges for use of assets / depreciation.
A well run fixed charge is cheaper for the managing agent to operate and if supported by appropriate policy and procedure can be a better option. In thoery the fixed charge should be based on - known contract costs (i.e. cleaning / gardening etc) plus anticpated non contractual spend (informed by the previous years expenditure in this area) plus any known additional items that are planned / expected in the year ahead. (Asset charges are often based on their initial purchase price with a charge derived from this spread over their aniticpated life - what happens to over / under recovery is a policy matter)
They are not obliged to refund any overcharge nor recover an undercharge, but where services are not provided or there is a significant overcharge it would be reasonable to have a policy to refund or carry forward a credit to the following year, but as stated this is not required. (However, if services are not provided there is a case for a refund)
03/08/2012 6:06 pm
Anonymous,you certainly know your subject.I am impressed with yor knowledge and very gratefu.AS I said earlier I await my breakdown of costs and they have told me that next spring they will review the wages costs.Because they have been completly unbalanced for the 3 years since opening.originally 8 renters paid for 15 hours and the wonderful leaseholders only paid 5 hours.After a big campaign by me to get that altered,last year they altered it to 8 renters paying 50% of hours and19 wonderful leaseholders pay 50%.I have recntly objected once more and they have said they will review it next spring for 2013/2014.
Orignally because renters were thought to reqiure more attention,which has proved untrue.because we are forced to pay a care elemnt and rent the call unit service off them.As I said I could be asking you a lot as things develop,if thats ok.