Have your say: Service Charges

Do you think your retirement home deal is fair?

Do you think the service charge imposed by your landlord is justified?

The pressure is growing on the companies that own and manage more than 100,000 leasehold flats and houses which are designed for older residents.

The companies that run them charge significant annual fees for maintenance, services, management, and repairs.

And when the leaseholders sell their home there is an exit fee to pay. They start at 1% of the sale price, but other charges are added on top and they can be considerably more.

The Office of Fair Trading is investigating these exit fees which it says could be unfair.

How high are the service charges in your retirement accommodation?

Do you believe the fees are justified?

Have you successfully reduced your service charge?

Tell us your experiences.

Send us your views

YOUR COMMENTS

My Father has recently moved into a bungalow which he has purchased freehold. The site, on which there are a further six similar properties, is owned and managed (external property maintenance, gardening, window cleaning, buildings insurance, emergency call facility) by a Housing Association. Dad pays a monthly fee for this. On the sale there is an exit charge of "whichever is the greater of 1% of the agreed value or half of one percent of the consideration to be paid by the transferee in each case multiplied by the number of years of the transfer or purchasers ownership of the property to provide a sinking fund.....". Particularly in view of the fact that the property is owned freehold is this reasonable/legal?
Stephen, Nantwich

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We are having problems with our scheme as a new housing association has taken over. We pay 1% of the value of the house per annum that we live in it, when ever the house is sold by either us or our families, plus other costs when the house is sold. We also pay service charges and these are altering every year and continue until the house is sold.
Marion & Ron, Belper

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How about focusing about the corruption at local authorities with leasehold properties, where work is disgusting, often corrupt (evidence available), and where some elderly leaseholders have the indignity in local authority blocks of receiving massive bills of thousands of pounds, as a result of 'refurbishment' whilst those who have contributed nothing, want everything, and get it all free.

I've seen companies repointing two metres of wall, charging £1,300 including scaffolding, and all they have done is smear mortar over existing.
John, South of England

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I am a Director of a Residential Management Company. The difference is that every apartment, of which there are 56, is a shareholder in the Management Company.

Unlike most Management Companies, we DO NOT exist to make a profit, but to cover day to day running costs & ensure any major works to be undertaken are taken into account when setting the Service charges. Any major financial expenses are agreed by shareholders at our AGM.

This set up gives all residents an equal say in how the Management Company is run & ensures that are costs are significantly lower than comparable establishments.
J Petersons, Preston

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I agree these sale charges are unfair. My mother-in-law lived in her flat for 16 years so the value had increased greatly when it was eventually sold giving the company a nice little earning for no outlay.
Barbara, Wirral

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My mother has dementia and was forced to leave her flat and go into extra care housing on ill-health grounds in July, 2007. I found a buyer for her flat but unfortunately the sale fell through just before the property slump. It remains unsold.

As my mother was still responsible for the fees (over £3000 per year) I decided to sub-let the flat until the property market improved. The fees for sub-letting are the same as those for selling i.e. 2% of the sale price - this is simply for putting the lease into another name. I had to pay £1600.

The rent I obtained was £575 per month. I still had to pay the management fees. Also, the letting agent. My mother gained only £35 per week.
Judith, Wellington

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Fair fees and reasonable charges are expected and justified. However, charging the House Manager's flat rental at more than double the market rates, insurance premiums with high commissions, installing unnecessary alarms at inflated prices, and trying to "encourage" people to have Sky at higher than market rates are all unacceptable.

The worst is the exit fee of 1% of value of the property + 1% contingency payable on sale, transfer or letting - when an owner has to sell to go into care or hospital.

Roll on the OFT investigation into these unfair charges.
Melissa, West Sussex

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My mother is currently residing in a relatively small complex in Derby.

It took a concerted effort from the residents to find their own alternative gardener who was some thousands of pounds cheaper than the resident gardener provided by the servicing agent.

Following some opposition from the managing agents the new gardener was accepted.
Mervyn, Derby

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We are currently paying £500 per month in Maintenance Fees and on leaving this Establishment for any reason, we would have to forfeit 1% for every year we are in occupation ad infinitum.
C Whitmore, Chandlers Ford

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My mother and I jointly owned her flat but Peverel were the leaseholders. When she died earlier in the year I inherited her 50%. I decided to obtain a tenant and put the flat on the rental market- hoping for a longterm tenant.

I sought the necessary permision from Peverel and they sent me an invoice for £3,774.75!! ie 2% of their determination of the market value of the flat with vacant possession. It means that it will be month 14 of the rental before I can break even after also paying Peverel's service charge and the estate agent's fees. If my new tenants decide the flat is not what they want and leave before this I shall have to find this 2% each and every time a new tenant moves in! This is draconian. I have written to my MP.
Penny, Hitchen

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I inherited the retirement home from my brother over two years ago.

I wanted to sell the flat so spent a considerable sum bringing it up to a saleable standard.

I was able to let it for a few months but it has remained unsold. In the meantime I have had to pay over £1,500 six monthly in Service charges and Ground rent, also Council tax of £112 per month.

This is completely draining me and my capital is very quickly diminishing.
Mrs Butterworth, Bridgwater

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McCarthy & Stone Assisted Living properties managed by Peverell require 2% of property value to be paid by owner on entering into a short-term let. When my mother died we could not sell the property and thus decided to let until market improved. We received a bill for £3,200.
Peter, Lingfield

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