Flat-Living.co.uk Reducing costs
For a quick way to estimate how much you could save, go to www.
uswitch.com or the Consumer Council for Water website at www.
ccwater.org.uk. Both sites have tools to help you calculate your possible savings, depending on where in the country you live.
SUPPLIERS
Every block of flats uses a range of suppliers – some deal with aspects of the block itself, such as gardeners, window cleaners and lift engineers and some are employed by individual residents, such as plumbers, electricians, and cleaners. RMC directors that are responsible for employing suppliers on a regular basis, should ensure that they revisit the costs involved in regular repairs and maintenance on a regular basis. By shopping around not only can you find alternative companies or individuals who might be able to do an equally good job at a better price, but if existing suppliers know that you are aware of the market rate for their services, they may be less inclined to put their rates up. For individual leaseholders, the cost of employing tradesmen to do
small household jobs can be prohibitive. RMCs are in a great position to help leaseholders by encouraging them to pool their resources. Why not employ a carpenter or painter and decorator to bundle a number of small (or not so small) jobs for different residents together over a few days or weeks. This could keep costs down for the tradesman because he may be able to buy supplies in bulk and has less travelling time to and from jobs and as a result may be willing to give a better price. Don’t forget that some tradesmen are also willing to give a slightly cheaper price for cash. However, cheapest isn’t necessarily best and doesn’t always offer
value for money – always check tradespeople’s credentials and use those that are members of reputable trade associations or are professionally qualified. Check they have the relevant insurance cover should problems arise. Never employ anyone who turns up on your doorstep touting for business, no matter how convincing they are.
INSURANCE
It is often assumed that insurance premiums will automatically increase year-on-year. But by shopping around, RMCs or their managing agents
should be able to check that they are really getting value for money from their insurance policy, which could account for up to 20% of residents’ annual service charge. Insurance is a highly competitive business, so if you have a well-run
block and haven’t made an unusually high number of claims, there is no reason not to check that you are getting good value from your policy. The best way to ensure that this is the case is to use a reputable broker who should test the market on your behalf on a regular basis, giving you peace of mind that when your renewal date comes around you are not automatically renewing your policy regardless of other available options. If you arrange your own insurance you can test the market yourself
with a little legwork. First, familiarise yourself with the details of your building, its age, type of construction and recent claims history. Next, check the rebuilding or ‘declared’ value of your block, either by looking at your existing insurance certificate or by contacting your insurer. Armed with this information, the next step is to get at least three like- for-like quotes from a range of brokers who specialise in blocks of flats insurance. You will need a detailed breakdown of the features of each policy so that you can compare them with your existing cover.
MANAGING AGENTS
Don’t assume that your managing agent is the only one who can offer you a good service for a reasonable price. Even if you are satisfied with your managing agent, talk to others in the area – find out what services they can offer and what they charge. Don’t take their word for it though. Ask them which blocks they manage in your area and talk to the residents to find out if they are happy with the service they are getting.
RIGHT TO MANAGE
If you and your fellow residents wish to exercise your right to manage under S20, going to a company that specialises in taking you through the process can be costly. Instead, why not consider going down the do-it-yourself route? You could save considerable sums of money and increase your knowledge and understanding of the leasehold system at the same time. If none of your leaseholders has the time or the inclination to do the legwork that is involved, you may find that by doing a lot of the necessary research and acquiring appropriate documentation yourselves, you could save a considerable amount in professional fees.
SERVICE CHARGES
The level of service charges is affected by the annual expenditure necessary to keep a residential block in good order and sufficiently insured. If these costs are monitored on a regular basis then service charges should remain reasonable. However, problems arise when some leaseholders do not pay or are late in paying their service charge and the RMC falls into arrears. This is bad news for the whole block – repairs cannot be carried out, suppliers can’t be paid and everyone suffers. One way to ensure that this does not happen is for the RMC to set up direct debit payments for residents. This way the cost of service charges is made more affordable by spreading payments across a number of months and the RMC can plan ahead knowing that it will have the money it needs to maintain the block to a high standard.
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