About to buy house with management company and dont know any detail of it

[television]

I am about to but a house in an estate with a managment company. The solicitor has not really bothered doing much looking into the company or the management fees per year etc. He just says the accounts seem fine etc.

I want to know how much I will be paying in fees every year and will they increase etc and other details in relation the the managment company. How can I find this out as the solicitor seems clueless on the whole thing.

 

[mrblues]

I'd be very careful about buying into a mgt co estate again. We've had huge problems with handovers from developers and also getting a managing agent of any worth.
Certainly in terms of fees there is no real way of knowing where they will end up over time. In alot of cases there has been no provision for a sinking fund to cover large expenditure and as such at some point in the future there will be a significant increase in fees to cover these large eventualities.

 

[television]

I'd be very careful about buying into a mgt co estate again. We've had huge problems with handovers from developers and also getting a managing agent of any worth.
Certainly in terms of fees there is no real way of knowing where they will end up over time. In alot of cases there has been no provision for a sinking fund to cover large expenditure and as such at some point in the future there will be a significant increase in fees to cover these large eventualities.

Okay but how will know what the fees are now?

 

[purpeller]

Has your solicitor made the section 37 requisitions? This should have been done and if not, it should be immediately. This should give you details of last year's accounts, which will show you what each unit paid in service charges. There may not be a budget for the coming year but last year will be an indicator. You should only have to pay a portion of this year's fees (pro rata on when you close the sale). The things you should watch out for are: how involved are the directors, have the common areas been handed over, how much money is in the sinking fund?

 

[television]

Has your solicitor made the section 37 requisitions? This should have been done and if not, it should be immediately. This should give you details of last year's accounts, which will show you what each unit paid in service charges. There may not be a budget for the coming year but last year will be an indicator. You should only have to pay a portion of this year's fees (pro rata on when you close the sale). The things you should watch out for are: how involved are the directors, have the common areas been handed over, how much money is in the sinking fund?

The solicitor has told me that he has seen the accounts and that the fees taken in are used every year in expences. he did not mention there was a sinking fund or how much the fees are likely to be. I got a copy of the accounts myself and the costs were 15 grand more than the solicitor said they were. Althought this could be because that I cant read these documents properly.

 

[Yorrick]

The Section 37 requisition should be obtained from the Management Company by the solicitor. This should show sinking fund amount, management fees etc.

Why not go to the estate and start doing your own research by asking variuous house owners there about the figures ?

Unfortunately in this day and age we cant seem to rely on so called professionals to do their job.

 

[television]

The Section 37 requisition should be obtained from the Management Company by the solicitor. This should show sinking fund amount, management fees etc.

Why not go to the estate and start doing your own research by asking variuous house owners there about the figures ?

Unfortunately in this day and age we cant seem to rely on so called professionals to do their job.

He did get a copy of the accounts and said they were fine. But he did not tell me the managment fees. ON the accounts it does not give a breakdown of the fees.

I have thought about going to the estate myself but would people on the estate think it was strange that a random person rolled up and started asking them about managment fees.

And this guy is not going to be cheap!

 

[truthseeker]

I have thought about going to the estate myself but would people on the estate think it was strange that a random person rolled up and started asking them about managment fees.

If someone politely rolled up to my front door and told me they were thinking of buying in the complex and were wondering what the mgt fees were Id just tell them. Its not a big deal if you are polite and open about it.

 

[purpeller]

I agree with Truthseeker - I'd answer those questions too.

Is the problem with your solicitor? S/He should be explaining these details. If the mngt agent didn't clearly state what the service charge is, then the solicitor should go back and ask it.

 

[television]

I agree with Truthseeker - I'd answer those questions too.

Is the problem with your solicitor? S/He should be explaining these details. If the mngt agent didn't clearly state what the service charge is, then the solicitor should go back and ask it.

I know the service charges for this year but want to know if it will constantly changing over the next few years etc

 

[shesells]

Fees do not stay the same. The deeds to the house will commit you to paying a percentage of the total budget of the development. The budget is set by the directors of the management company and will vary according to what needs to be spent. This year we have to spend nearly 10k repairing the surface in our car park, we didn't have to spend that last year. We have a sinking fund but don't want to fully fund the job from that and reduce our emergency fund so there will be an increase in fees.

As another poster has pointed out, a big indicator in how much the fees will vary is how active the directors of the MC are. In our development we (I am an owner/director) are very active and get quotes for absolutely everything ourselves as well as getting them from our Management Agent.

 

[Yorrick]

Further to the earlier comment any prospective buyer should visit the area a number of times and at different times to get a feel for the estate. If you find that people wont give you informatioin about the estate, management fees etc perhaps it is a sign that you would be better off elsewhere.