Service Charges
A service charge is a payment you make towards the costs of providing and maintaining services for the block you live in. It relates to actual and estimated costs. Service charges are split fairly between all the flats in the block as set out below. The council pays the proportion relating to the rent-paying tenants, which is then recharged to them through the rent they pay.
It is important to note that the cost of the services to tenants is not subsidised in any way by leaseholders.
As the freeholder, the council is responsible for maintaining the structure of the whole building and the communal areas such as halls and stairways. The costs incurred by us are passed back to you on a proportional basis through the service charge.
The services you receive will vary depending on where you live and may include:
- Day-to-day maintenance
- Caretaking and cleaning
- Lighting of common parts
- Repairs and improvements
- Heating and hot water
- Lift maintenance
- Concierge
- Gardening and grounds maintenance of external common areas
- Management charges
- Ground rent
- Insurance
How do we calculate your share of the service charge?
Each flat and each block of flats has its own gross value (former rating system).
The amount of service charge you pay is based on the gross value of the flat, which is a percentage
of the total gross value of all the flats in the building. In simple terms the service charge is
based on the size of a property but not necessarily by the number of bedrooms that it has.
The service charge year runs from April 1 to March 31.
Your service charge bill
At the start of each year we estimate the charges we expect to pay, which are based
on the actual cost of providing the service to your building over the previous 12 months. We will
send you an invoice each year in March informing you of your share of the charges you will be
required to pay for the coming financial year. You will have the option of paying the full amount
in one lump sum in April or spreading the costs over the year in 12 monthly instalments.
The estimate does not include any charges for major works. You are consulted in advance on any such proposals and you will receive a bill once such works have commenced.
After the end of the financial year, we begin to calculate the final cost of providing the services to each block for the previous financial year. By the end of September you will receive a letter detailing how much we spent on your block, your individual charge and the difference between this sum and the estimated sum. Any variance will be shown in your invoice for the following year.
Ground rent
The ground rent is an annual payment that is set out in your lease. The charge is made
because your property is built on council land. The payment of ground rent is included in your
annual service charge invoice. Please note that the lease states that ground rent is paid in
January but we will invoice you in April.
Management charge
This is the cost of providing services to you and includes:
- Preparing notices for major works
- Issuing estimated costs of major works
- Supplying information to leaseholders on loan and payment methods
- Insuring the building
- Collecting payments for insurance premiums and ground rent
- Issuing estimate and final account invoices
- Processing repairs orders
- Collecting payment for routine repairs
- Collecting payment for major works
- Recording receipt of payments
- Maintaining accounting records
- Meeting with residents