Service charges are an amount that residents pay to cover the cost of providing communal or shared services to a building and, if applicable, the surrounding estate. The way charges are calculated and what they cover are set out in your tenancy or lease agreement. We are committed to providing all our residents with value for money, quality services and do not make a profit from the money we collect.
What kind of services are covered?
As the buildings and estates we own and manage are all different, so too are the amounts that residents in different buildings are charged. Not all services are paid for via your service charge. If you are a tenant, for example, your rent includes an element covering general repairs, decorating and communal heating. If you live in a sheltered or supported scheme your service charge may include an amount to cover staff employed at the scheme, such as support workers, or costs associated with maintaining communal areas, such as gardens, laundry rooms and shared lounges.
Here are some of the common services we provide, the cost of which may be recovered from your service charge:
- Cleaning/caretaking, e.g. cleaning and maintenance of internal communal areas, stairs and rubbish chutes
- Gardening and grounds maintenance, e.g. cutting grass, planting and weeding flower beds
- Entryphone, i.e. the cost of maintaining and repairing entryphone systems to a block
- Management fee, which is a flat fee charged on a per unit basis and covers staff costs and overheads for preparing service charge estimates and accounts
- Lighting, i.e. block or estate costs which include replacement of any lightbulbs in the communal areas
- Buildings insurance: As a freeholder we are responsible for insuring buildings on behalf of residents against risks such as fire and flood. Leaseholders contribute to this via their service charge, whereas tenants contribute via their rent. Please note you are responsible for insuring your contents and we strongly advise you to arrange your own contents insurance policy.
Your frequently asked questions about service charges
1. Where can I find out what services I receive and how much they cost?
Each year you receive a personalised service charge account booklet which provides details of the services you receive and the costs associated with providing each element.
2. How do you calculate the costs?
As it isn’t possible to guarantee 12 months in advance exactly how much services are going to cost, we provide residents with an estimate for providing the various services covered in their service charge for the coming year. Like other landlords, we base this estimate on how much it has cost in the previous year, and also take into account any upcoming one-off charges that we know of.
3. How is my contribution calculated?
The percentage you contribute is calculated according to the terms of your lease or tenancy agreement. Costs are divided (or ‘apportioned’) among homes based on the relative floor area of your property, or how many bedrooms there are or, in some cases, they are calculated based on the rateable value of the property.
4. Why is my service charge different to my neighbour?
Some elements may differ from property to property. For example, if your home has two bedrooms your service charge may be higher than someone with just one bedroom.
5. What if your estimate is higher or lower than the actual cost?
At the end of the year we reconcile all service charges, which means we compare the original estimated cost with the actual cost. The most likely outcome is that there will be either a deficit or a credit on your account.
6. What happens if there is a deficit?
If we spend more than we estimated there will be a deficit on your account and we will make an additional charge to cover the outstanding amount.
7. What happens if there is a credit?
If we spend less than estimated, you will receive a credit on your account.
8. What do you mean by schedules?
Residents don’t always benefit equally from services provided to a building. For example, residents living on the ground floor of a building who have direct ‘street’ access to their home may not contribute to the cost of a communal door entry system. Or if a scheme consists of two buildings and just one of the buildings has a lift, only residents living in the block with the lift will contribute to its maintenance. To ensure contributions are fair and reasonable, we therefore divide service charges into separate ‘schedules’ and make sure each schedule includes services that residents derive benefit from.
9. Do I pay for day to day repairs in my service charge?
If you are a tenant an amount is included in your rent to cover repairs. If you are a leaseholder, charges for day to day repairs are a condition of the lease.
10. What services are eligible for Housing Benefit?
Most of your service charge is eligible for Housing Benefit. There are some exceptions, including water, gas and electricity supplied directly to your home.
11. Are the same services eligible for Universal Credit?
The rules for Universal Credit are slightly different to those for Housing Benefit. For example, Universal Credit doesn’t cover the cost of window cleaning for ground floor properties.
12. What do I do if I have a query about my service charge?
13. What do I do if I’m not satisfied with the services I receive?
Whether we provide services ourselves or employ contractors to deliver them on our behalf we always aim to provide the best we can. If you are not happy with the level of service you receive, please call us on 0300 123 9966 or email firstname.lastname@example.org
so that we can look into it.