Leaseholders share fury at £450k cost of new intercom system

Leaseholders share their fury at being charged £450k for a new intercom system (with no new cables) – and £34k of it is the managing agent’s fee

  • Leaseholders told they will pay more than £450,000 for new intercom system
  • The charge includes a fee of at least £34k to the property management company
  • Countryside Communications has billed £700k in rental fees for existing system 

Leaseholders at a block of flats in East London have been told they will pay at least £450,000 for a new intercom system – and the cost doesn’t even include any new cables.

What the figure is expected to cover, however, is a fee of at least £34,000 to the leaseholder’s management company called FirstPort.

The management fee alone is more than the average worker’s salary in Britain, which currently stands at £29,900.

The minimum fee being charged by the managing agent for this project will be £34,397.30, based on its contract with the freeholder that allows it to charge 10 per cent of the cost of major works before VAT.

Leaseholders at a block of flats in East London, including Liam Spender, pictured, have been told they will have to pay at least £450,000 for a new intercom system 

Leaseholder Liam Spender, who owns one of the flats in the development, estimated his share of the works to be £1,138.50.  

Residents have questioned why if there is no rewiring being done, does the system need replacing? 

One of the benefits is that the new system will eventually ‘save’ leaseholders money longer term, as the current intercom system is rented.

The existing intercom system at the block of flats is rented from a company called Countryside Communications.

It installed the rental system at the time the developer St. George – now part of Berkeley Group – built the development in 2000.  

Mr Spender said: ‘They are handing over more than £100,000 of our money to Countryside with no questions asked. Berkeley Group has a lot to answer for here as well.’

‘I’m worried because we have cladding issues here as well, another mess Berkeley Group left us to clean up. If FirstPort is milking us over a relatively small project, I dread to think what it will be like when they are in charge of potentially millions of pounds of cladding remediation spending.’

Countryside Communications’ contract should have expired in July last year, but it has been allowed to roll over.

Countryside billed £282,935.11 in rental fees in 2019 and 2020, and between 2016 and 2020, it has billed more than £700,000 in rental fees for the existing system.

The 2020 rental price works out at roughly £325 per flat per year. 

The replacement system is believed to cost about £46 per flat per year, and so residents will eventually save money with the new system.

The £450,000 cost of the new intercom system does not include new cables, but does cover the replacement of existing ‘plates’ (pictured)

However, the equivalent of 18 months of those savings are required to pay off FirstPort’s fee and Countryside’s exit charge.

As part of the £450,000, a figure of £112,246 is being paid to Countryside Communications in exchange for the 20-odd year old cable. The new system will be installed on the back of the existing cable.

As part of its 10 per cent fee, FirstPort is collecting 10 per cent of the £112,246 payment to Countryside. In other words, it is going to charge residents the equivalent of £11,224.60 for effectively paying an invoice.

The cost to leaseholders like Mr Spender (pictured) includes a fee of at least £34,000 to the leaseholder’s management company FirstPort

The estimated cost of the works is £454,044.36. This cost will be spread across 436 flats in the block. 

Both Berkeley Group and Countryside Communications were approached for comment, but did not respond.

However, a Firstport spokesman said: ‘Proposed improvement works at St David’s Square are to upgrade the existing door entry system. This is a major works programme, which comes outside of normal day-to-day maintenance costs, and legally requires a Section 20 process to be completed. 

‘At this stage in the process, any costs communicated are an estimate and we are continuing to work through the Section 20 consultation so we can confirm exact costs.

‘In our role as property manager, we are supporting homeowners and residents to get this upgrade completed whilst ensuring the costs of these works, and disruption to residents, are kept to a minimum. 

‘We do charge a fee as part of the major works process to cover our time managing the Section 20 consultation and the procurement process, which includes running a tender process and obtaining competitive quotes from qualified suppliers for the work, as well as coordinating the subsequent works on-site and communicating with our customers throughout.’

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