The service charge & ground rent on the flat I want to buy is £190pcm which is putting me off. It’s a Victorian conversion with offstreet parking in front of the house but nothing special ie: no gym/secure parking/concierge, which might justify the high cost.
The annual breakdown per flat is:

Building Insurance: £700
Repairs & Maintenance: £93
Cleaning of common parts: £60
Communal Grounds Maintenance: £115
Block management fees £240
Budgeted Reserve Fund £500
Total: £1708

The owner says they’ll try and negotiate this down but I doubt they’ll be able to get it down to c£1000 which is what I’d expect.
Building Insurance seems very high and budgeted reserve fund suggests they’re saving for some major work which isn’t a great sign. Either that or someone’s on the take!

Thoughts about what’s negotiable here?

Who’s the service provider?

It all seems fairly standard tbh, most buildings like that will have a reserve fund if only for replacing windows, painting the exterior/interior and various things like that. This i think would be particularly true of a victorian building.

Insurance looks a tad high. I think we pay (5x units) around £1100 pa for £600k replacement cost. So about £200 per flat.

The rest seems about right. Any sensible block management will pay into a sinking fund to help prevent big cashflow calls on tenants when the roof needs doing. Internals usually get redecorated every 5 yrs externals probably 7.

as you note the three biggies look high

£700 for insurance – how many flats etc as that does seem high and i assume that is just rebuild costs – i doubt you can negotiate it as i assume they get the best deal they can?
Block management fees £240 – no idea what this is tbh
Budgeted Reserve Fund £500- that is very high and I doubt anyone saves this amount a year for ongoing repairs.

Associated charges like this have always put me off owning something communal as you dont really control these costs

What happens if they want £1k per year as the roof needs fixing in 5 years time?

I doubt you will get anything for less tbh

Block management fee for out block is £250 per flat. SO £240 is bang on.
We are paying about £350 intoa sinking fund, but we have a smaller block. The fund has around £2.5k in it and next year that will be used to pay for internal redecoration.

What happens if they want £1k per year as the roof needs fixing in 5 years time?

You’ll be grateful that they dont do the work in five years time and issue a demand for £5k out of the blue.

How many flats are there in the building ?

Block management fees – seems rather high.

What is the status of the reserve fund – it should have plenty of cash in it, otherwise previous owners might well have been putting very little in over many years causing a need to ramp up the amount being put in now = you pay for them not paying in the past = not good. When I moved into my place the amount in the reserve fund for my flat was more than 10% of the value of the flat which was good. A friend bought a flat with nothing in the reserve fund, and suddenly had to find € thousands when the roof was found to be knackered.

You’ll be grateful that they dont do the work in five years time and issue a demand for £5k out of the blue.

I would rather decide myself what to do. What are you some sort of commie who favours free citizens being forced to do as you decree 😉

Commie?

No I’m a Van Hoogstraten-esque evil capitalist rentier landlord and you will be paying the bills sunshine! 🙂

are you clear on what you get for the money and is there evidence that it has previously been delivered. (*I once was a leaseholder in an insured building ……………..)

when can it be renegotiated and what limits/controls are there (*there were a few places where they jumped the rates up/sort of sold contract on to ‘professional’ mgmt companies)

find out who is involved in the contract and google etc on them

is the a mgmt committee/funds/accounts etc you can review

fwiw – I turned down a flat in a similar deal as I didn’t want to add a large and unknown future cost to myself