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Mrs Bear

Horror stories re leasehold flats and service charges

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Big article in S Times Property section about skyrocketing service charges + lousy service/maintenance and gross mismanagement/malpractice  in the kind of flats that have concierges, gyms, etc. 

Typically,  deliberately reasonable sounding charges initially, only to shoot up a couple,of years later.  One cases quoted £2,500 p.a.  up to £9,500.  

But also at least one case of leaseholders taking management co. to court, and winning.  

Given the number of such flats recently built in London, should imagine the article will be chilling for any developer trying to flog them in a market that's been rapidly cooling anyway.  

Not just relatively new blocks, either - one case quoted was in my neck of the woods  - Charter Quay in Kingston, where residents took management to court and were reimbursed over £500k.  

Not that this sort of thing is news, but it's the first time I've seen a major, really hard-hitting article about it in a property section, rather than a much smaller one in the money or Ask an Expert sections. 

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Meanwhile, in San Francisco, this story is exciting the Schadenfreude team https://www.bloomberg.com/news/articles/2017-02-01/who-will-pay-for-san-francisco-s-tilting-sinking-millennium-tower

"The 58-story tower's shine faded on May 10, 2016, when Agabian attended a homeowners association meeting and was informed that the building had sunk 16 inches into the earth and tilted over 15 inches at its tip and 2 inches at the base, according to suits filed by residents and the city of San Francisco. “You can imagine how distressed we were to know that, for one, our lifetime investment and savings are at risk,” she said. “And we have no idea whether or not there’s a fix to it, and if there is a fix to it, what it will entail.The building, meanwhile, continues to sink"

 

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I recently saw a one bed flat in E14 - looked quite nice with pool and gym and steam room in the development - for a mere £370000

I then I saw the service charge - £4200 a year for a one bed. Wouldn't it just be a lot cheaper to join Virgin active or Fitness first?!

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As Democorruptcy has pointed out in the past, it appears that people entitled to some types of welfare payments can have seemingly limitless leasehold charges paid by the taxpayer on top of other entitlements.

 

Wonder if people out there have eg bought freehold house, cut it into leasehold flats, retaining the freehold in a different company. Comedy leasehold charge, let flats out to qualifying benefit recipients, taxpayer backstopping it all.

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23 minutes ago, The Knimbies who say No said:

As Democorruptcy has pointed out in the past, it appears that people entitled to some types of welfare payments can have seemingly limitless leasehold charges paid by the taxpayer on top of other entitlements.

 

Wonder if people out there have eg bought freehold house, cut it into leasehold flats, retaining the freehold in a different company. Comedy leasehold charge, let flats out to qualifying benefit recipients, taxpayer backstopping it all.

Although the online benefit checkers don't have a limit attached to service charges or ground rents, maybe LHA acts as the limit? I'm not sure what happens if people are claiming Pension Credit.

One firm that must take a huge amount per year in Service Charges is McCarthy & Stone for retirement properties. I've noticed locally that new developments have live-in managers but later ones don't. Let's hope people had a large reduction in charges,  when the live-in manager moved out. 

 

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