Dispute with Management Company Over Fees / Fee Increase

[wales01man]

With a possible near 200 homes involved why are they consulting solicitors must be easier and quicker than drip feeding info on to here?

[jonnyBoy1975]

Ok will read through, thank you for your help so far.

[atticus]

1.3.2 The Management Company covenants with the Transferee that it will:-
(i) Subject to the payment by the Transferee of the Service Charge above....
1.4.1 Pay to the Management Company in advance on the 1st day of January in every year the Service Charge estimated by the Management Company as being required to enable the provision of the Services as defined in the Transfer...

What are the terms of the provisions relating to (a) Services and (b) Service Charge. Note the reference to estimates by the Management Company. You need to get your head around a lot of text! Understand these and you can then see whether and how you can bring your various points to bear.

[jonnyBoy1975]

I have looked through our TP-1 agreement and pasted a few areas that may be of interest. I do realise that this area is very complex but I guess I wanted to know is are there any areas we can challenge based on the following things we have learned :

• Unreasonable Fees: we believe the fees to be inflated, can we challenge this?
• Lack of Transparency: There has been a distinct lack of transparency and inadequate documentation regarding how the fees are calculated or what they are for.
• Service Not Rendered: Work on the site has yet been completed due to the state that the developer has left the site. We believe that the work that is currently been applied should have been done before a handover or the work contract was accepted.
• Error in Calculation: Prior to latest fee presented our previous invoice was considerably higher (4x) the amount we were led to believe and had paid. This error was rectified but no clarity on the breakdown of what the new fee covered or how the error happened in the first place.
• Variation from Original Estimate: Our original fee from SM (the developer) and charge taken when we completed the sale was significantly different from this price.
• Disproportionate Costs: As we have no breakdown of how the fees were generated we feel that this could support our view that the current fee is Disproportionate.

Here are a few sections from our TP-1 covenants:

1.3.2 The Management Company covenants with the Transferee that it will:-
(i) Subject to the payment by the Transferee of the Service Charge (a) provide procure and perform the services referred to in the Transfer and (b) enter into a Deed of Covenant in the terms of this Deed

1.4 The Transferee covenants with the Management Company that he will:-

1.4.1 Pay to the Management Company in advance on the 1st day of January in every year the Service Charge estimated by the Management Company as being required to enable the provision of the Services as defined in the Transfer during that year and forthwith upon demand to pay to the Management Company any underpayment in respect of any previous calendar year.

1.4.2 Observe and perform all of the covenants on the part of the Transferee contained in the Transfer

1.4.3 Not transfer the property to any person or persons or company without first procuring that any transferee has entered into a Deed of Covenant with the Management Company in the form hereof


Very much appreciate any help, or any experience people have with dealing with management companies. We are considering seeking legal representation but I guess wanted to get a sense of what this looks like legally before committing... as I'd imagine this could get costly.

[atticus]

The starting point has to be the documents. You need to look at the covenants in your purchase documents. Those set out the parties' rights and obligations.

[jonnyBoy1975]

Anyone any ideas on what we can do or where we should start?

[jonnyBoy1975]

PS. Sorry for how long this message is - there is so much to share but this is the cut and thrust of it all ^