Case studies

Understanding complex service charges

We have managed a large scale mixed-use development located on the Liverpool waterfront since 2013.

Each quarter a number of leaseholders attend a resident’s forum, along with key stakeholders, to discuss ongoing actions and issues at the development, such as estate management, noise and police activity in the local area.

As managing agent, Braemar Estates, regularly attends these scheduled forums and has an agenda point with regard to the service charge budget, expenditure and planned property works.

Braemar Estates produced detailed reports for discussion, however, over the course of several meetings it became clear that other actions and issues were taking up most of the available time and as a result the service charge often did not get discussed.

In conjunction with several interested leaseholders we formed a sub-group to regularly meet with our Director of Property Management to solely discuss the service charge in greater detail.

The development has several complex features, namely; the layout, plant and machinery and multiple service charge schedules as set out in the leases. At these specific meetings in-depth topics are covered to thoroughly explain key features of the service charge, the apportionment schedule, the communal electricity metering and billing, the car park contributions and to inspect the key pieces of plant and machinery to further understand why costs are split as they are.

The findings of each of the meetings are reported and distributed to all leaseholders.
 

Working with a variety of stakeholders

We manage a large city centre scheme in Nottingham which has significant social housing owned by a Housing Association (HA).

We meet regularly with the Housing Association to cover important on-site maintenance and residents’ issues, as well as discussion of the key features of the service charge. We engage fully with the HA residents to promote greater understanding of the division of responsibilities under the lease and to explain the components of the service charge in detail.

The knowledge and expertise of the on-site concierge and property management team is the key to the successful running of the development. Our understanding of residents’ needs, together with property management protocols, enables any situation to be dealt with swiftly. Disruption is kept to a minimum together with prompt action enabling the service charge expenditure to be held within budget.
 

Consulting services case study - No 1 Deansgate, Manchester

Braemar Estates acted on behalf of real estate investment management firm, CBRE Investors, and provided building management charge audit and advisory services.

No 1 Deansgate, located in central Manchester, is a 13 storey luxury residential development comprising 83 apartments with six retail units on the ground floor.

Braemar Estates, with its depth of expertise in leasehold residential matters, was well positioned to offer advice regarding the landmark building and quickly turned the development around implementing the following:

  • Preparation of a report on historic service charge expenditure and preliminary audit of accounts
  • Recovery of overpaid invoices in excess of £100k
  • Budget reconciliations
  • Full compliance review and report
  • Recovery of c.£12k of overpaid VAT
  • Deficit analysis and justification
  • Future management proposals (incorporating “best practice”)
  • Section 20 Consultation and implications
  • Recommendation of strategy to implement “inclusive” management with residents; and informal arbitration of framework to allow landlord to recover substantial service charge arrears.


Commercial Manager, Robert Dean said: ”This was a challenging appointment as much of the information we required to complete the exercise was not readily available relating as it did to the historic accounting position.  We were grateful for the assistance provided by CBRE and many of the contractors employed on site, to get to the bottom of the issues at No 1 Deansgate.  Before we could begin to move forward, it was necessary to piece together the entire service charge history of the building so that we could forensically examine where money had been spent.”


Block management case study – Castlegate, Manchester

Castlegate, Manchester is a development of 84 luxury apartments, which occupies one of the best locations in Manchester, with superb views over the water to the
Castlefield basin yet minutes away from the city centre.

In April 2009 Braemar Estates took over the management
of the development, inheriting a situation of service charge deficits, a high level of debt and a considerable number of unhappy residents. Our strategy was to engage with the residents and work with them to focus on top quality service delivery and effective cost management.

To date there has been a significant turnaround. The
equipment within the block is fully maintained and compliant, and the communal areas benefit from an annual redecoration programme which keeps Castlegate pristine.

There is a notable surplus of income over expenditure, the service charge remains static, the reserve funds continue to accumulate and there are no service charge arrears.

Owner occupiers are proud to live there, landlords are able
to let the apartments readily and values are maintained and protected.