What is a management fee?
A management fee is part of the service charge payable to the landlord or manager in return for managing the leasehold property. This fee is the only part of the service charge that goes directly to the landlord or manager and the remaining income received is for the cost of services, repairs, maintenance, improvements, insurance or set aside as a reserve fund. Management fees or similar charges can only be recovered from leaseholders if a term in the lease specifically allows for this.
What services do I receive?
The duties listed below are what we provide within our management fee (where applicable). The list is not exhaustive.
- We collect service charges to ensure there are sufficient funds to provide services.
- We set service charge budgets.
- We produce annual accounts.
- We recover service charge arrears.
- The cost of providing service charge information to residents.
- The cost of carrying out periodic health and safety checks but not specialist checks and tests (such as asbestos surveys, specialist structural surveys etc).
- The cost of holding meetings with residents (when required).
- The management and supervision of staff
- The storage and safekeeping of resident and tenancy details.
- Providing information to advice agencies and ombudsman services.
- The administration of buildings and other insurances.
- Providing and managing maintenance contracts.
- Carrying out consultation on management matters, major works, and long-term agreements.
- Drawing up and reviewing risk assessment plans.
- Lease management
Why am I charged?
Your lease or agreement allows us to charge for the cost of providing the services you receive.
Will management fees increase each year?
It is very unusual for a lease to state that the management fees will be fixed and therefore as the cost of management is included in the definition of a service charge, which may vary from year to year, according to the costs incurred it can be increased. There is a requirement for the level of management fees to be reasonable, and any increase should reflect the costs the landlord or managers incur. The landlord or manager will usually find that the costs of providing the services rise each year and that this will be at a rate higher than inflation.
How is the fee calculated?
The management fee is calculated by dividing the full cost between all the leasehold and shared ownership properties that we manage.
For further information on service charges please go to The Leasehold Advisory Service