Why is the Gym a separate entity, and why are the costs not charged to the service charge?
This is the legal bit: Under the lease, paragraph 1 to the Sixth schedule (Estate Charge), and paragraph 3 to the Sixth schedule (Block Costs) , expenses like pumps, garage lights, gates and gardens, etc, the Directors authorise their agents to add these expenses to the service charge. The directors approve the service charge and gym accounts. We will report to the leaseholders at the AGM a high view of the financial situation of the gym, and to gym members once the membership situation is clear and fobs reprogrammed in a few months.
Back in the annals of time, a shared leaseholder in 2014 made an application to the First Tier Tribunal to exclude the gym fees from the service charge. The court determined that the gym’s running costs were not authorised by the lease and cannot be charged to the service charge.
FTT cases take up a lot of time to deal with, time away from other critical work and the professional and legal fees are charged to the service charge.
The management company Remus decided that a membership system would be created to cover the running costs to ensure that no gym costs can or would be charged to your service charge. Remus did not produce gym accounts for their last few years, managing agency and advised the gym bank account was empty. This was a free service by Remus and we did complain to RICS but our complaint was not upheld.
Eddisons have restored the current members and are chasing outstanding fees. Once the current member numbers are clear, fobs will be reprogrammed and we can draw up a financial report for the gym members with a proposal for fees to include a contingency for unforeseen costs and a planned improvement programme.
The gym income and expenses do not form part of the Grand Ocean Estate Service Charge Accounts, so are not shared with the leaseholders. GOVMC negotiated with Eddisons that they would manage the business of the gym for free and the directors also manage the gym along with all their considerable work in their leisure time, for no compensation. It is run on goodwill.
We keep an eye on local developments and the annual local membership fees at the Lido is from £350 and the Longridge Avenue gym is from £275. The current single rate for the Grand Ocean gym is £120 per year and is reviewed annually.
The only way to ensure the gym stays open is to sign up, pay and use it. The directors have discussed other possible uses in case the gym cannot pay its way and explained this in our Spring newsletter so all residents and leaseholders are kept fully informed. We never proposed to close the gym, but asked residents to join up via this website
We hope that clarifies matters for everyone. Save the gym by joining up.
Your hard working director dedicated to make the Grand Ocan Estate a safe, polite and friendly home for all