Your service charge covers the day-to-day running costs of services at your building and if applicable, the estate your homes is part of. The services we charge for are set out in your tenancy agreement or lease. This page explains more about this.

What is a service charge?

Your service charge covers the day-to-day running costs of the services we provide at your building and if applicable, the estate your home is on.

 

Your tenancy agreement or lease sets out how we work out service charges. Every year we will write to you setting out what your service charge will be.

 

If you are a leaseholder or freeholder on a variable service charge we will send you an annual statement with the actual costs of services within six months of the close of the financial year along with any request for payment for any major repairs completed during the year. If your payments have been more than the actual costs of services this will be refunded. If your payments have been less we will ask you to pay the deficit.

Most service charges are fixed or variable but some have elements of both and these are knows as hybrids.

Fixed service charges are reviewed every year. If at the end of the year the cost of providing the services was more than the payments you made we will not ask you to pay more.

 

You will not get money back if the costs of the service were less than your payments. This is how fixed charges operate and this is set out in your tenancy agreement or lease.

Variable service charges work on the basis of an estimated cost for services. We send out the estimate of costs for the service every year. Then when the financial year ends we work out the difference in the estimated and real costs. This creates an annual statement which we will then send to you.

 

If the real costs are higher than the estimate, we will ask you to pay the difference. If the estimate was higher than the cost, we will refund you the difference.

What does my service charge cover?

Your service charge could cover a range of services that we provide, such as:

  • Cleaning shared areas like entrance halls, communal corridors, stairs and lifts
  • Heating and lighting costs for shared areas
  • Servicing and maintaining any shared TV digital, cable or satellite systems installed for an estate or block
  • Costs of looking after shared outside areas; including grass cutting and trimming of greenery
  • Equipment like door entry systems, CCTV and lifts
  • Maintenance and testing of fire alarms and other equipment such as emergency lighting
  • Fees – this only applies to leaseholders and includes the independent audit of scheme costs where it is required by the lease.

How do you work out my service charge?

To work out your service charge we:

  • Review all service charges every year
  • Use the latest available information when we estimate service charges, including taking account of inflation or changes in the prices or rates of any contractor
  • Divide costs in a consistent, clear and simple way between the homes which receive that service.

We apply service charges in line with the terms set out in your tenancy agreement or lease which reflect the type of charge you have.

Why is my charge different to my neighbour's?

Charges will be different, even between neighbours, for several reasons:

  • Services delivered may be different and not be available to all homes in a street or a block, you won’t pay for services you don’t have access to
  • Obligations to pay for services may be different in your tenancy agreement or lease
  • The tenure of the home you occupy – for example leaseholders may pay charges tenants don’t – e.g. insurance
  • The type of service charge applied to your home, it may be fixed or variable or a hybrid.

It is normal for service charges to differ, even between neighbours, for various reasons.

Why do I pay a management or administration fee?

The management charge covers the cost of:

  • Tendering for new contractors to provide services on our behalf
  • Managing contracts and paying bills
  • Dealing with enquiries and complaints
  • Accounting for service costs and annual review
  • Preparing and issuing service charge statements.

Common questions