Property Management Fees - Legal issue

[insurance_jon]

I own our offices, but they are on an estate so there is a management co.

The fees they are charging, and the exorbitant prices they are paying for stuff are costing us a fortune.

are there any legal precedents where we can challenge that they aren't acting in our interests? we all own a share of the management company.

[surveyor]

Get enough of you together and sack 'em.

No-one will want the hassle though as usually when you break it back to a per tenant charge it's not worth the hassle.

What % are they charging?

Charge might (not likely, but might) also be set-out in the lease

[soxboy]

Have a look on the RICS website for the Code of Practice for Service Charges. It probably doesn't tell you more than you already know, however it's worth a read and also mentioning to your managing agents that you are aware of it.

[Jockman]

Does this come under the Right to Manage remit ???

If so, it is worth looking at

[burwoodman]

Jon- Many years ago I owned an apartment on the thames. The management company charged insane amounts for gardening, insurance, you name it. When we collectively challenged them they supplied invoices. We checked these service providers and found they owned most of them. If enough of you get together you can buy the freehold and or fire them

[Billsnemesis]

If the owners of the buildings on the estate own 100% of the shares in the management company then control ultimately lies with the owners and as long as they get their act together they should be able to control the service charge regime and the managing agents. The problem is that most people really are boiled frogs and will just sit there getting poached until they croak.

If you can use the shareholder power to appoint some owners as directors they will have control over who is appointed to run the estate and some control of costs.

One some estates the developer retains a "golden share" with voting control which makes that more difficult but some more digging would be required to see which set up you have.

Ultimately your obligation to pay depends on the terms of the transfer or deed that set up the service charge regime and the agents have to stick to the limits set up by that process.

I act for developers setting up these sorts of schemes so if you PM the details I am happy to look over your paperwork to see what options are available to you.

[soxboy]

Although most of the comments above are helpful and useful, they look mostly to appear to be for residential properties.

The OPs is a commercial building, for which I believe different rules apply (although I may be wrong!).

[Billsnemesis]

There are extra rules for residential which deal with right to manage and enfranchisement but the principle still applies that if the owners of the buildings control the shares in the management company they do have some control over the process.

And both residential and commercial service charges must follow the terms of the transfer lease or deed which sets up the structure. They tend to be interpreted in a tenant friendly manner so there are some ways in getting back at an overpriced service charge budget

[petemurphy]

http://www.resident.uk.com/index.html

[insurance_jon]

Is commercial