Service charges

This section describes how we manage service charges and answers some commonly asked questions.

 

What are service charges?

Service charges cover the cost of managing, maintaining, repairing, insuring and providing services to residents beyond the benefit of occupying their own home. The law says the charge must be ‘reasonable’ and the services provided must be carried out to a ‘reasonable’ standard.

Service charges include items such as cleaning, concierges/caretakers, ground maintenance repairs, lifts, pest control, management costs and any other running expenses to the block or estate. Leaseholders also pay their share of building insurance and the maintenance of the building through the service charge (tenants pay these costs within their rent).

You will only be charged if your home benefits from that service. For a full breakdown of your service charge please refer to your Service Charge Estimate included with this booklet.

We aim to:

  • deliver value for money on your services
  • consult you about any significant changes to your services
  • give you clear information about how your services are managed

We are continuing to improve the way we manage service charges. We hope you’ve already noticed some improvements. Over the next year or so we will continue to implement improvements at every opportunity.

What does my service charge cover?

Services vary according to where you live. For example, if you live in a block with a lift on an estate you will receive more services than if you live in a flat in a converted street property or a low rise block which does not have a lift.

How are service charges calculated?

Every February we send all residents who pay a service charge an estimate. This is our forecast of how much we think it will cost us to provide the services during the year from April to March.

This estimate is based on looking at spending in previous years, estimating the increase due to inflation and adding in any increases or decreases in spending that we know about for the coming year. Charges normally change in April and we will give you a month’s notice of any changes.

When do I receive the actual costs?

At the end of every financial year we compare how much it actually cost us to provide the services with the original estimate. If we have spent more than estimated there will be a deficit and this will be added to your service charge the next year. If we have spent less than estimated there will be a surplus and it will be taken off your service charge in the next year.

The accounts we send you in September each year (within six months of the end of our financial year) will give you this information.

What happens to the Surplus or Deficit?

For tenants any surplus or deficit is carried forward and included in the service charge for the following year. If your balance shows there is a:

  • Surplus - this will be used to reduce the service charge Deficit - this will be used to increase the service charge

Leaseholders -­ you may claim back the surplus or leave it on your account to offset future charges. If there is a deficit, we will write to you to advise you of the amount due. If you cannot pay immediately we will discuss a payment plan with you.

Please contact your Income Services Officer or Neighbourhood Manager / Service Manager to discuss the options.

Service charge calendar

We have listed key dates for service charge activity below:

Month What to expect
March Letter advising of charges from April based on estimated costs
April New service charge year starts at beginning of April, charges and rates may change
May - August

Genesis:

  • Reviews expenditure and compiles accounts for the previous year
  • prepares sinking fund accounts

September

Residents receive service charge accounts pack including:

  • Actual accounts for the previous financial year
  • Sinking fund accounts
  • Audit report (Leasehold only)
October - November Consultation on accounts for the previous financial year and on proposed estimates
December Genesis finalises estimates for the following year taking into account feedback from residents
March Letter advising of charges from April
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