What is a service charge for?
A service charge is made to cover the development ongoing costs and services provided by your freeholder or residents management company to maintain the communal areas of your block or estate. These will include but not limited to gardening, cleaning, insurance, minor repairs, employee costs, lift expenses, communal utility supplies, accountancy fees, management and other professional fees, reserve fund and major works.
Details of what can and cannot be charged by the Lessor will all be set out within your lease. This will include the proportion of the charge to be paid by the Leaseholder.
Most Leases stipulate the collection of service charges in advance, including collecting any shortfall at the end of the year. Some Blocks have arrangements that whilst the lease provides for an interim demand to be payable when sent they are happy to accept payments by instalments, typically monthly direct debits.
Each resident management company we are appointed by will have a specific client bank account for service charge funds to be paid into.
How is my service charge calculated?
Your service charge is calculated from a prepared budget, which will contain details of re-occurring items and any reasonably foreseen costs. All service charge demands are in accordance with your lease.
Can I see what my service charge is spent on?
Each year a service charge budget will be issued out forecasting the coming year’s expenditure and how money is dispersed. All block directors will have up to date information on expenditure and will see original invoices for any works. By appointment, all lessee’s are welcome to visit our offices to view Invoices etc.
Do you charge commission on contractors invoices?
For clear transparency we do not add commission to any Invoices. All invoices are checked and verified in order to ensure the resident management company are obtaining value for money.
What is a reserve fund?
Some Leases allow for additional funds to be collected to cover for future large planned works such as door entry or roof replacement. A Life Cycle Costing exercise will be undertaken when considering an appropriate amount to be paid by the Leaseholder.
