Tag: service charges

Freedom

So many of the leaseholders we meet for the first time tell us of the lack of freedom they experience with their developments and the things they feel unhappy about. 99% of the time, these experiences are negative and have created a hostility towards their current managing agent and a reluctance to pay service charges.  This is understandable when leaseholders don’t see any tangible evidence of how their service charges are being spent, alongside the lack of information provided to the leaseholder of what their money is spent on.  Furthermore, leaseholders do not feel listened to.

So many of the leaseholders we meet for the first time tell us of their experiences with their developments and the things they feel unhappy about. 99% of the time, these experiences are negative and have created a hostility towards their current managing agent and a reluctance to pay service charges.  This is understandable when leaseholders don’t see any tangible evidence of how their service charges are being spent, alongside the lack of information provided to the leaseholder of what their money is spent on.  Furthermore, leaseholders do not feel listened to.

We recently met a lovely lady who lives on a large development in Essex, who expressed huge regret over buying her flat, all because of parking issues.  From our discussions with her, the parking issues could have been managed more to the benefit for those people who live on the development, but it appears that the managing agent has chosen not to listen to the concerns of the residents and have fallen behind with understanding of how the lessees feel.  Whilst speaking to this lady, it saddened us to hear one phrase from her of which was; ‘there’s nothing I can do about it’.  Hearing this expression of hopelessness was heart breaking.  The fact of the matter is that there is something that can be done.  Leaseholders can have control and they can have a say and they can have freedom from issues such as this dominating their lives.

From a ten-minute conversation, the lady we spoke to was empowered to become a director of the management company for her flat, so that she could then take forward her concerns and use the options and solutions discussed to make the parking situation better.  The development is home to lots of people, and their homes need to work in the best way for them.  It is acknowledged that leases can sometimes provide restrictions on solutions, but if that is the case, then surely communication with the residents is a must to explain the lease and ensure everyone is informed.

It was obvious to us that the residents at this development could and should have been better served by their managing agent. With her newly acquired knowledge and pending directorship the lady will soon be able to influence change for her development.

This is just one of many sad stories. Everything from badly maintained communal gardens to broken entrance doors that remain insecure for months, to dirty communal interiors and bad lighting. We hear these things and many more on a regular basis.

The other thing we hear is that lessees feel helpless and don’t know how to change their managing agent. More can be found out here about appointing a new managing agent. Often contracts are incredibly restrictive, with the onus on the lessee directors to identify a small window of opportunity in any given year to serve notice.  Concordia offer flexibility for leaseholder Directors and don’t tie people into a contract that is difficult to exit.  Our contracts are initially for a year – we do this as it normally takes a year to get a development working the way it should and to get everything right.  We get to know your development and find out which facilities are working to your satisfaction and which are not.  We look at why and what solutions there are available. This time enables us to make any necessary changes and then for you to experience those changes.  If you wanted to change from our service, you can do so easily with a short notice period of a month at any time. We believe you deserve the freedom to choose the services that are best for your development, whether that be a managing agent or any other type of contractor.

We have witnessed the visible effects on directors and leaseholders who have chosen Concordia Residential and achieve freedom.  From our initial meetings where the atmosphere in the room is one of anger and suspicion to, quite literally, an hour or so later, one of relief and anticipation of a much happier future with smiles all round! They have found that breaking free, with our help was a far easier process than they feared. Often, it’s the worry of the hand over process and the thought of a confrontational response that holds them back. Nobody wants to deal with those scenarios. We at Concordia will help leaseholders every step of the way. We are talking about people’s homes and lives.  Freedom to enjoy both should never be in question. Contact us now to find out more.

The Ethics of Credit Control

A service charge for a leasehold property is one of those bills that has to be paid as per the terms of the lease agreement. It is what the leaseholder agreed to when they signed the lease to their property. The payment of the service charge means of course, that the building and any common parts to the development can be suitably maintained. However, what happens when the service charge isn’t paid? Managing agents, like us here at Concordia Residential, are employed by developments to carry out credit control of the service charges as part of their management remit. This includes estimating future service charges, issuing service charge demands (although we feel demand is not the nicest word to use), collecting the monies and of course having to chase leaseholders when service charges are not received. This blog is about the ethics of that credit control and Concordia Residential’s opinion on the matter.

The Process of Debt Collection

Most managing agents, rightly so, will have a process in place to carry out the collection of unpaid service charges, also called debt collection.  This of course has to be adapted to be in line with any terms of the lease agreement being managed. Click to find out more about service charges.

Many would assume that the debt collection process and any relevant charges are explained fully to the directors of a development prior to the directors selecting that managing agent.  Unfortunately, it is all too common that many directors do not know the full extent of a managing agents debt collection process or charges, nor are they informed if either of these are changed at any time.

Experience has taught us that debt collection charges against individual leaseholders can be extortionate and completely unjust in this industry.  There are no apparent ethics, nor is there regulation over the amount of such costs and it can be sickening to see how some leaseholders are treated when faced with difficult times.

Potential Charges for Debt Collection

Managing agents can charge huge amounts of money for a simple letter chasing any service charges due – £100.00 in some cases for a first letter!  Thereafter the letters get more expensive and are sent out in quick succession, seemingly without a care for the fact that debt is now increasing against the leaseholder.

Furthermore, managing agents can then charge to refer a case to a professional debt collection agent.  We have seen charges for this referral run up to £250.00. 

So far, 3 letters at £100.00 each, then a £250.00 referral fee, and the leaseholders debt has already increased by £550.00 and they may not even know about it.  How is this ethical or justified and where does the money for the letters and debt referral go?  We are sad to reveal that the money more often that not goes directly to the managing agent and is normally classified as an ‘income stream’ to them. 

Concordia believe the ethics of this is simply not right or justified.

Additional Aspects

There are some additional aspects to consider with the above, in that most managing agents will need to employ people within a credit control team and those people need to be paid a salary. Indeed there is a cost to this, but surely the cost should be covered in the management fees charged to the development? Also, many will argue that the need to have a credit control procedure is essential. This is agreed with, however Concordia do not think this should be an aggressive process, nor should it be classified as an income stream to the managing agent. Surely the excessive fees and hard-lined approach are most beneficial to the managing agent and not to the development? It is indeed true and prudent that the development needs the service charge in order to operate, but our view is that there is a right way to go about it without exploiting leaseholders and in turn creating a more harmonious development. Debt collection fees are some of the hidden charges many managing agents have which we at Concordia find utterly immoral.

Ethics First

If you are a leaseholder, would you not prefer some empathy and understanding if your financial situation meant you got a bit behind in paying your service charges?  Wouldn’t you wish to have ethics put first, with a phone call to simply say your service charge hasn’t come through this month and is everything ok? Would it not be better all round to have a managing agent who you can talk to about it all and who doesn’t simply send you down their debt collection process in order to generate more income for themselves? This is what we believe is ethical and this is what Concordia can give you. Get in touch with us to find out more.