Why do we need a Management Company / Managing Agent?

When purchasing a property you assume responsibility for looking after that property, for example maintaining the gardens, cleaning the windows, redecorating periodically, insuring the building, etc. When purchasing a new house you usually become personally responsible for such administration and maintenance, however when purchasing a flat or apartment you generally share a number of those responsibilities with your neighbours. Therefore Estate Management is required to ensure that the communal obligations of leaseholders are carried out and completed in a fair and equitable manner.

All buildings and landscaped areas require maintaining to some degree and failure to do so, quickly results in deterioration. Effective Estate Management is therefore vital in order to enhance the environment of all residents and ensure that re-sale values are maximised in the future.

The Management Company will almost certainly be responsible for ensuring that the buildings remain properly insured. Depending upon your development this will normally include buildings insurance and contents of the common areas, engineering insurance for lifts or other plant and Directors and Officers Liability insurance to protect the Directors of a residents’ Management Company.

The Management Company will also be responsible for arranging the regular services, for example, gardening, cleaning, window cleaning, lift maintenance, etc. together with ad hoc and cyclical maintenance such as repairing the entry intercom equipment, replacing light bulbs, periodic redecoration, etc. In fact The Management Company is responsible for arranging just about every service that the development requires.

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Why am I being asked to pay Service Charge?

Because the Lease or Transfer under which you purchased your property says you have to. As the Lease or Transfer will vary from development to development you should make reference to your own lease or Transfer for details of the exact provisions that apply. However, generally the service charge that you pay is your contribution towards the overall cost of managing and maintaining the structure and fabric of the buildings and communal areas of your development including any plant or equipment situated therein. Your Lease or Transfer sets out exactly what services should be provided and the percentage of the total costs that you must pay.

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How is the amount of the Service Charge decided upon?

At the beginning of each financial year Premier Estates will prepare an estimate of the cost of providing the services set out in your Lease or Transfer and the amount you are required to pay is based upon this estimate. At the end of the financial year the actual amount of money spent providing services is compared against our estimate and if we have spent less than we anticipated a credit will be applied to your account, however if we have spent more than we anticipated you will be invoiced for your share of the shortfall.

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I know of another development where the Service Charge is less than I pay. Why is my service charge higher than theirs?

No two developments are the same and it is therefore virtually impossible to compare the service charge of one development with the service charge of another development, as there are so many factors that affect the level of service charge that is required. For example a development with a lift or lifts will normally pay more than one without and even if both developments have a lift it is necessary to consider the number of residents contributing towards the running costs of each lift, the type of lift, the number of storeys of the building, etc.

It is also necessary to consider things like provision for future expenditure, i.e. does the service charge payable at the other development include contributions towards a sinking fund, as ours normally does. If the service charge payable at the other development does not include contributions towards a sinking fund it is likely that their service charge will vary dramatically from year to year as they will have to fund major expenditure when it is required rather than saving up for it as they go along.
Furthermore, how many properties does the other development contain? Small developments normally require a higher level of service charge as the costs are being shared by a smaller number of units.

As can be seen from the above, comparing the service charge of two developments is often like comparing apples with pears. The only way to assess whether your service charge is reasonable is to look at each individual heading of expenditure that comprises your service charge budget to ascertain whether expenditure in each area is reasonable. If the answer is that expenditure on each service is reasonable then unfortunately the bottom line is what the bottom line is, irrespective of what is being paid at another development.

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Why am I being asked to pay service charge in advance of the services being provided?

All service charge receipts relating to your development are paid into a dedicated bank account specifically for your development and the cost of providing services is met from this account. This bank account cannot go overdrawn and we cannot order any work unless there is sufficient money in this bank account to meet the cost of the work. This is why you are required to pay service charges in advance of us providing the services and also why it is important that you pay your service charge promptly when due. If your service charge is not paid promptly when due it is likely to result in us having insufficient money available to continue to provide services to your development which will result in services being withdrawn.

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How can I pay my Service Charge?

Premier Estates offers a number of ways to pay your service charge including Cheque, Credit / Debit Card, Bank Transfer & Direct Debit

By Cheque

Please make your cheque payable to Premier Estates Limited and ensure that your unique account number is written on the reverse (your unique account number will appear on all invoices and statements that we send to you).

By Credit / Debit Card & Bank Transfer

Please telephone our Accounts Department on 0345 491 8898 to pay by credit / debit card or by Bank Transfer. In order to help prevent fraud DO NOT write your credit / debit card details down and send them to us. A handling charge may apply to credit / debit card payments.

By Direct Debit

If you wish to pay future invoices by interest free monthly direct debit payments, please telephone our Accounts Department on 0345 491 8898 for a mandate.

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What happens if I do not pay my Service Charge?

You have a legal obligation to pay and therefore if you do not pay it will ultimately lead to legal action being taken against you.

We are trustees of your service charge fund and therefore we have a legal obligation to ensure everyone who should pay does so.

It is also essential to our ability to provide services to your development that everyone pays their service charge promptly when due. Failure to pay service charges promptly when due will result in us having insufficient money available to continue to provide services to your development, which will result in services being withdrawn and repairs and maintenance not being undertaken.

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I have some financial problems and am struggling to pay my Service Charge. What should I do to ensure the matter does not escalate?

Talk to us as soon as you are aware that there is likely to be a problem in order to avoid an escalation of our arrears procedure. There may be ways in which we can help you to spread the cost but doing nothing will almost certainly lead to the problem becoming worse as you may end up incurring the additional costs of legal and administrative fees, etc.

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Why am I being asked to pay Ground Rent?

If you are being asked to pay ground rent it is because your Lease says you have to. Ground rent is a contractual rental payment to the owner (Freeholder or Headlessee) of the land on which your development is situated. Unlike service charge, ground rent is not related to the provision of any services.

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Why am I receiving invoices from you in someone else’s name?

Probably because you have recently purchased your property and your solicitor has failed to notify us in the correct way of the change in ownership. You should immediately make contact with your solicitor and ourselves in order that the matter can be rectified. However, we can only amend our records upon receipt of the documentation specified by your lease.

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I am selling my property; do I still have to pay your invoices for service charge and ground rent?

Yes. Whoever is the owner of the property on the date the invoice is due for payment is responsible for paying that invoice in full even if you are likely to sell your property part way through the period covered by the invoice. If this is likely to happen you should send a reply paid envelope with your payment in order that we can issue a receipt. You should then hand this receipt to your solicitor who can ensure that they collect an appropriate apportionment from the purchaser at completion of your sale.

Any arrears of ground rent or service charge are likely to delay your sale until the arrears have been paid in full.

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People keep referring to the Lease, what is it and why is it important?

The Lease is the most important document in relation to your ownership of the property. It sets out the contractual relationship between you, your neighbours, the freeholder and, if applicable, the Management Company. It says what you can and cannot do at the property, what your neighbours can and cannot do, when and what you must pay and what services you are entitled to receive.

It is very important that all owners of flats and apartments have a clear understanding of the terms of their lease and therefore it often pays to ask your solicitor to run through it with you.

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When will Premier Estates visit my development?

This depends upon the exact terms of the management agreement but in most instances a representative of Premier Estates will carry out a minimum of a monthly visit to your development. If you would like to meet with Premier Estates’ representative during a future site visit please contact us to find out when these visits take place.

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Exactly what are the responsibilities of the Management Company and for what am I personally responsible?

For a definitive answer to this question you should refer to your Lease, which sets out exactly who is responsible for what.

However in general terms the Management Company will normally be responsible for the structure and fabric of the buildings and all areas / facilities that are used in common by more than one resident. Residents will be responsible for everything that is exclusively private to them. By way of example: if a pipe serves two or more apartments it will usually be the Management Company’s responsibility to maintain, however if a pipe solely serves one apartment it will generally be the Leaseholder’s responsibility to maintain.

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As a homeowner I can do whatever I want with my property, can’t I?

Generally the answer to this question is yes in terms of minor cosmetic alterations such as internal redecoration. However as you live in a private community it may well be that some of your actions will affect your neighbours’ rights to quiet enjoyment of their homes. Accordingly, your lease states that there are a number of things that your cannot do at all and a number of other things that you cannot do without Premier Estates’ permission. Things that are strictly prohibited normally include things like causing a nuisance or annoyance to your neighbours, making structural alterations, etc. Things that are usually prohibited without Premier Estates’ permission normally include things like keeping pets, sub-letting of your property, etc.

Where your lease enables us to give permission for something, a request is reasonable and in our opinion will not adversely affect your neighbours, permission will normally be granted. However such permission may well be granted subject to a number of conditions which are designed to ensure that no nuisance or annoyance can be caused by your actions. If such conditions are ignored then the permission can be withdrawn.

If you are in any doubt about whether or not you are permitted to do something or require our consent you should always refer the matter to us for a definitive answer.

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How do I get involved and have a say in the running of the development?

There are a number of ways in which you can influence the way in which the development is managed and which of these is most appropriate will generally depend upon the way in which the Lease provides for the development to be managed.

If your development has been set up with a Residents’ Management Company then the easiest way is to stand as a director of your Management Company. If you wish to act as a director of the Management Company you should notify your interest to Premier Estates who can then advise on the procedure to be followed. The current directors can co-opt a new director at any time, which will then require ratification by the members or shareholders at the next annual general meeting. Technically therefore it is up to the current directors and ultimately the members or shareholders to decide whether they will allow you to act as a director, however in practise it is usual for whatever help is offered to be welcomed with open arms. The directors of a Residents’ Management Company are responsible for liaising with the Managing Agent over policy decisions affecting the day to day management of the development.

If your development does not have a Residents’ Management Company it is still possible for you to get involved. Premier Estates actively encourages effective communication with residents and regards it as a vital tool of good Estate Management. Residents are free to set up a Residents’ Association and Premier Estates will be delighted to provide guidance on how such an Association should be established. Correctly constituted Residents’ Associations have considerable consultation rights as to how a development should be run.

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What are my responsibilities if I become a Director of my Residents’ Management Company?

The responsibilities of a director of a Residents’ Management Company are the same as for a director of any Company and therefore you have statutory and fiduciary duties that should not be taken on lightly. However, in practise you will be responsible for liaising with the Managing Agent to ensure that the development is managed properly, in accordance with the lease and in a cost effective manner.

It will be necessary for you to meet regularly with your fellow directors to agree policy decisions as to how the development should be being run. This will include anything from agreeing the budget and financial accounts, to deciding on the priority of repairs and reviewing quotations. You will need to hold meetings in accordance with statutory requirements and consult with members or shareholders as required.

In the majority of instances Premier Estates will act as the Company Secretary, thereby ensuring that the company complies with its filing requirements, etc. If requested, Premier Estates can also assist by arranging Directors and Officers Liability insurance in order to minimise the personal liability faced by the directors of Residents’ Management Companies.

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How do I notify Premier Estates of wants of repair or maintenance?

Repair problems should be reported to Premier Estates’ office at the earliest opportunity after the want of repair is identified. This can be done by telephone, fax or email.
Premier Estates has identified three categories of maintenance together with timescales for actioning repairs - Cyclical / Planned Maintenance, Routine Repairs and Emergency Repairs.

Cyclical / Planned Maintenance

Premier Estates will carry out cyclical / planned maintenance in accordance with a detailed cyclical maintenance plan. It is therefore not necessary for any resident to notify Premier Estates of cyclical maintenance.

Routine Repairs

All reports of routine repair and maintenance should be notified to Premier Estates during normal working hours. Any want of routine repair or maintenance that occurs outside normal office hours should be notified to Premier Estates at the next available opportunity that the office is open.

Premier Estates will arrange for a contractor to call and affect routine repairs within 21 days of notification. More costly repairs will require two or more quotations and, in some instances, formal consultation with residents. In these cases the repairs will be completed as soon as quotations have been received or upon completion of any consultation period. It may also be prudent to “group” certain minor repairs together so that they can be dealt with cost effectively by one contractor.

Emergency Repairs

Emergency repairs include anything that poses an immediate risk to health or safety only; all other repairs are classified as routine repairs.

All reports of emergency repair and maintenance should be notified immediately to Premier Estates during normal working hours. Emergency repair and maintenance that occurs outside normal working hours should be reported immediately to Maintenance Line on 0845 601 8375. They have been supplied with contractor details who have already agreed to respond in the event of an emergency.

Care should be taken to ensure that the repair has been correctly classified as any matter reported to the emergency number that is not considered an immediate risk to health or safety will not receive attention and may result in a charge being levied.

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What do I do if I want to complain?

For full details please refer to our complaints page.

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