Western Mail Property Doctor Column #21
By admin
Issued on behalf of Emyr Pierce Solicitors
I’m planning to buy a flat which I’m told is subject to an ongoing service charge. What is this – and how much could it cost me?
With buildings in multiple occupancy – whether it’s in two or 222 flats – they will each be let on individual leases with the individual tenants responsible for the internal repair and maintenance of their own flat. However, when it comes to the question of the maintenance and repair of the roof, external walls, foundations, landings, staircases, lifts, entrance halls, car parking areas, footpaths and general landscaping, then that should be the responsibility of the landlord or a management company. In such circumstances the individual tenants will be required to make an equal contribution towards the cost of any maintenance and repair works. This is what is meant by “service charge” and this is what your service charge payments will be used for. This will be an annual payment, usually payable in two six-monthly payments. The service charge will vary depending on the size of the development and the facilities enjoyed and can range from £600 to £1,800 a year. This is something that anyone thinking of buying a leasehold flat or apartment should consider very carefully because the service charge will by definition never come down – it can only go up. If the development is effectively managed, part of the annual service charge should be allocated towards a Sinking Fund in order to provide a safety net for large items of expenditure due in years to come, such as repairs to roof, exterior redecoration and the resurfacing of access ways and pathways. In all cases where you are considering buying a flat you MUST check the last three years’ accounts to establish that the current maintenance regime and service charge budget is adequate for the development and that these payments have not fluctuated wildly. In cases where inadequate service charge payments have been demanded, the tenants can be called upon to pay an excess service charge contribution once the management accounts for the previous year have been finalised. On buying a flat, your lawyer should always retain a sum on account of the current financial year as the accounting information is always six months behind. Unless this is done you may be called upon to contribute towards payments for a period during which your seller occupied the property.
I am interested in buying a property, but would like to ensure the owner includes all the carpets and curtains in the sale. Are they likely to be included as fixtures and fittings?
When you’re buying any property you must ensure that the estate agent’s particulars contain all items that you believe or understand to be included in the sale. You need to be absolutely clear from the outset what’s included and what isn’t – it can save a lot of arguments later. Sellers who get knocked down on their price will sometimes try to charge extra for the fixtures and fittings, so that’s why it’s important that a list is supplied detailing all items included in the purchase price. Fixtures and fittings can include carpets and curtains, curtain rails, wall units, bathroom fittings such as toilet roll and toothbrush holders, bathroom cabinets, mirrors, blinds, built-in kitchen accessories like washing machines and dishwashers. Other items could be included – like an antique chandelier or a settee or dining table and chairs – but at an additional cost. It is for this reason that the fixtures and fittings form provided by the seller is so essential in differentiating between items included, excluded, items for which an additional price is required and, of course, items that the seller might want to take with him – like a greenhouse or garden shed. This ensures that both parties are absolutely clear from the outset as to what is staying and what is going.
