Question: We've owned a leasehold flat in a block of 24 homes for nearly 10 years. However, a new managing agent has recently taken over the building's maintenance and, almost overnight, the annual insurance cost has ballooned from around £150 to £420 with no explanation.
The agent won't tell us why except to cite "rising costs", with other service charges mushrooming, too; we've tried complaining but have got nowhere. Can you help?
Stephen Riverest, Woking
Answer: Price-comparison sites have propelled the "shop around for best price" mantra high up our priority lists. So a hefty insurance price rise imposed by a new property management company as fait accompli will stick firmly in the craw.
Unfortunately, as you've discovered, the transparency used as a selling point by comparison sites is often shunned by shoddy property management agents. Leasehold flat owners pay for their buildings' insurance – protection in the event of structural damage after a fire, say – via their annual service charges to the block's freeholder owner. Yet the policy for a block of flats is bought by the managing agents acting on behalf of the freeholder, freezing leaseholders out. The lack of transparency over exactly how you're being charged and how your money is spent can lead – sadly, too often – to cases where managing agents choose insurers paying the highest commission to their staff, rather than the best-value cover.
The consumer group Which? has recently backed calls for increased transparency and consumer awareness of the issues of high charges and poor service from managing agents.
Research by Urban Owners, itself a managing agent, suggest that some unscrupulous operators take an average of 42 per cent in hidden commission for arranging buildings insurance at blocks of flats. But leaseholders fed up with such practices can now fight back more easily.
Leasehold Valuation Tribunal (LVT) is part of the Residential Property Tribunal Service, a public body charged with providing an affordable, fair, unbiased service. It can adjudicate on matters such as insuring the building, how much you have to pay in service charges and the quality of services provided. It charges a fee and takes six weeks. For more information visit www.lease-advice.org.Reuse content