Owners right to view Property Management Contracts

[landlady2016]

I have requested copies of the property management, cleaning and gardener contract for a residential estate. I am a part freeholder and therefore pay (significant) property management fees. The estate directors have ask me to explain why I need them and have not supplied. I appreciate they are sensitive documents but do I not have a right to a copy for services we pay for without needing to justify the reason? I'd simply like to know what I am paying for, so is requesting the 'services provided' list a good way of getting round  this? Are there alternative suggestions please?  

[Richlist]

I assume your property is leasehold.

Everything the leaseholders & freeholders can do, how, when and under what circumstances is contained in your lease. You may find the management company can make a charge for providing you with copies. Sometimes you have a right to view documents at their premises by appointment.

 First thing to do is read your lease.

As a leaseholder you should receive  annual accounts to show how the service charges are made up.

[landlady2016]

Thank you. Yes, I am a part freeholder & fair point re my needing to read the lease. Annual accounts are sent - no complaints there but REGARDLESS of what is written in the lease I do wonder how one is meant to judge re value for money based on an 'x' cost for  'Cleaning' or 'gardening'  without further detail. I don't know what that actually comprises of! Is our yardstick the fact that the place is 'acceptable' re cleanliness or the garden is not overgrown? The lack of re-tendering + directors who have remained in place for decades (and are justifiably tired) creates stagnancy. I live abroad so would not be viable as a potential director but I do like to know how exactly what we are getting for our service charges. The annual accounts are vague. Am I  being too analytical or do others out there obtain greater detail?  Thank you in advance for any comments.

[Richlist]

It's very difficult to give you a detailed reply because we haven't seen your lease. There are are rules that the freeholders needs to follow, they should get comparative prices for all works but the lease may give details on what specifically is required.....depends on the wording. 

If you live abroad you will struggle to get much info. I think company rules permit you to view all documents  but, at their registered office & by prior appointment....so you are already at a disadvantage.

If directors are appointed from the leaseholders I assume there will be a regular AGM .....although even that doesn't have to be every year.....again living abroad puts you at a disadvantage.

If there is a professional managing agent involved they should be well versed in buildings maintenance & housing and company law.

Read your lease......at least 3 times....they are not easy reading.

Find out about the last agm.....ask to see the minutes. They won't like sending you anything overseas.

From that you can put a picture together on how the set up should look and compare it to where it actually is. Beware some leasehold set ups are incredibly complex and will take a while to understand.

[landlady2016]

Thanks again. The AGM's are scheduled satisfactorily and I am 'virtually' present at most via skype or someone's phone! Minutes are sent by email - no complaints there. 

I travel to the UK for work (at least used to before covid!) so reading contracts at the registered adrs is feasible. Thank you for the idea.

One final comment (if I may) It's the full lack of  transparency that frustrates me. We are currently paying surveyors - chosen without tender - the sum of 11% of a circa £0.5mil roof project under the premise that a full tender and many quotes were submitted, therefore everything is above board. If the surveyor gets a percentage of the total works, surely there are conflicts of interest here (ie an incentive to invite/attract high quotes) as compared with a market rate flat fee for overseeing the project? As surveyors they should know what is involved and could quote a flat fee + time if needed. Ironically they hadn't cottoned on a change in permit laws end 2018, and we had to resubmit plans last year which meant we missed the summer of 2019 and construction costs went up (though my guess is they will plummet next year ). The winning tender itself has been now, approved despite the word 'estimate' being used!!!  It goes on...

I shall look for my lease!  

[Richlist]

Putting a job out to tender and receiving quotes doesn't mean picking the cheapest is necessarily the best route. Managing agents will often deal with a number of different leasehold property groups and build up a working relationship with contractors on whom they can rely based on the quality and timings of their previous jobs. The whole idea of having a group of people to organise and oversee work to  leasehold property is so that individuals dont have to do it themselves. Having fellow leaseholders appointed as directors who take day to day decisions on costs should ensure money is not wasted resulting in higher than necessary service charges.

We had someone like yourself who wanted to get very heavily involved by analysing the breakdown of costs for maintenance & service charges and it was a total and utter pain. The time, effort and cost of providing that info, answering unending questions and having the directors integrity questioned was not welcomed. 

Probably the best way to effect change is to become a director yourself.

[Grampa]

With your leaseholders hat on you are legally entitled to see copies of receipts for works which may give you more information of the scope of works the contractors are contracted to do. You may even be able to call them direct for further information once you know who they are but there is no guarentee they will give any info to you.

Any works that cost more than £250 per unit should only be done if the section 20 process is followed which has certain timescales and 3 (i think) quotes obtained but also giving the option  of the leaseholder to suggest their own contractor to tender.

Take a look at this website which is for leaseholders. https://www.lease-advice.org/