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.
Many residents are asking why the system isn’t being rewired.
A benefit of this system is its ability to save leaseholders more money over the life of their leases, since the existing intercom system is rented.
Countryside Communications has rented the intercom system that was installed in the flat block.
At the time St. George, the current part of Berkeley Group, constructed the development in 2000, it installed the rental system.
Mr Spender said: ‘They are handing over more than £100,000 of our money to Countryside with no questions asked. Berkeley Group is also responsible for this.
“I am concerned because we also have cladding problems here, which Berkeley Group has left us to fix up. FirstPort should be taking advantage of us on a very small project. It is terrifying to imagine what it would look like when FirstPort takes over millions of dollars of cladding spending.
Countryside Communications contract was supposed to have ended in July of last year. However, it was allowed to rollover.
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)
For Countryside’s exit cost and FirstPort’s fee, 18 months’ worth of savings is required.
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. On the cable’s back, the new system will be placed.
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. The cost of the works will be split over 436 flats within the block.
Both Berkeley Group and Countryside Communications were approached for comment, but did not respond.
Firstport spokesperson said that the proposed improvements at St David’s Square were to improve the current door entry system. This major work program is beyond normal daily maintenance and must be legally completed under Section 20.
The costs that are communicated at this point are only estimates. However, we continue to consult with Section 20 so we can verify exact costs.
“In our capacity as property managers, we support homeowners and residents in completing this renovation while minimizing disruptions to residents.
“We will charge an additional fee to manage the Section 20 consultation process. It covers our time in obtaining quotes from qualified suppliers and coordination of subsequent work on-site.
