For many leaseholders, receiving a service charge demand or notification of major works can feel overwhelming. It often arrives with technical terminology, legal references and figures that raise more questions than they answer.
At JMJ Asset Management, we believe that informed leaseholders make confident decisions. While managing agents have legal responsibilities to meet, there is also an opportunity to explain the process in a way that builds understanding and trust.
These are some of the questions we believe leaseholders most want answered.
“Why has my service charge increased?”
An increase in service charges is rarely welcome, particularly at a time when many households continue to feel the pressure of rising living costs.
However, service charges are not designed to generate profit for a managing agent. They exist to cover the cost of managing, maintaining, repairing and insuring a building in accordance with the lease.
Increases are often driven by factors outside anyone’s control, including inflation, higher insurance premiums, increased utility costs, changes in legislation or the need to meet new fire and building safety requirements. While that doesn’t necessarily make paying more any easier, understanding why costs have changed provides valuable context.
“Why can’t you just choose the cheapest contractor?”
This is one of the most common questions surrounding major works.
Value for money is important, but value and cost are not always the same thing. A significantly lower quotation may exclude important elements of the specification, use different materials or fail to deliver the quality required for a long-term repair.
Managing agents, surveyors and directors have a responsibility to consider quality, competence, health and safety, programme, warranties and long-term performance, not simply the lowest price.
Sometimes spending a little more today helps avoid spending considerably more tomorrow.
“Why does everything take so long?”
Major works rarely begin as soon as a problem is identified.
There may be surveys to commission, specifications to prepare, budgets to consider, statutory consultation requirements to follow and tenders to evaluate. Once a contractor has been appointed, factors such as weather, material availability or previously hidden defects can all influence the programme.
While delays can be frustrating, they are often a sign that the correct process is being followed rather than corners being cut.
“Where does my reserve fund go?”
Many leaseholders contribute towards a reserve or sinking fund without fully understanding its purpose.
A reserve fund helps spread the cost of significant future expenditure over a number of years, reducing the likelihood of substantial one-off demands when major works become necessary.
It is a long-term approach to financial planning that helps protect both the building and the interests of those who live there.
“Why wasn’t this repaired years ago?”
It’s a fair question and one that doesn’t always have a straightforward answer.
Some defects develop gradually and only become apparent following detailed surveys. Others are identified but monitored because immediate repair isn’t yet necessary. In some cases, resident management companies or previous freeholders may have chosen to defer works in an effort to keep service charges low.
Unfortunately, delaying essential maintenance can often result in more extensive and expensive repairs later.
Communication matters just as much as compliance
Most leaseholders recognise that buildings need to be maintained and that major works are sometimes unavoidable. What often causes frustration isn’t the work itself but feeling left out of the conversation.
At JMJ Asset Management, we believe managing agents should never underestimate the value of clear, honest communication. Explaining not only what is happening, but why, helps build confidence, reduce uncertainty and strengthen relationships between leaseholders, directors and managing agents.
When leaseholders understand the reasons behind decisions, even difficult conversations become easier to have.
