Call for fee regularisation charged by Managing Agents
Expert opinion from David Knapp, Partner and head of residential property at law firm Hart Brown, who calls for a fee regularisation charged by Managing Agents.
On the 27th June 2019 the then Secretary of State, James Brokenshire, announced that the fee for providing management information by management companies in residential leasehold sales should be reflective of the work involved but should be no more than £200.00 and provided in a timely fashion.
Needless to say, there are still many managing agents in the market who insist on charging exorbitant fees for what should be a very straight forward and simple exercise.
Certain management companies have even split into two so that one company collects services charges and a second company collects ground rent.
This therefore enables them to charge two separate fees and double the charges.
Over the last six or so weeks standard letters have been circulated that solicitors are encouraged to write and send to managing agents who are still charging fees in excess of the £200.00 figure.
Sadly, a number of these companies respond by indicating that it is not yet law and they will review their procedures if and when they are restricted in the fees that they can charge.
These are the types of companies that have resulted in James Brokenshire’s announcement as their fees are prejudicing and penalising the flat owners of the properties that they manage.
In some cases the management companies not only charge excessive fees to the seller for the management pack but additional and excessive fees for standard one or two page deeds of covenants, licences to assign. In addition, they charge the purchasers impose excessive fees for dealing with notices of assignment and charges, required under the terms of the lease, plus in processing/registering the same deed of covenant for which they have already charged a fee.
All in all, this is certainly an area that needs to be regularised and regularised swiftly. In some simple leasehold sales the managing agents can earn in excess of £1,000.00 for providing standard computerised forms and documents which probably take them all less than an hour with which to deal.
Kindly shared by Hart Brown Solicitors