You will be aware that buying your home on a leasehold basis means that we continue to provide work and services to the structure and common areas of your block or estate. As an owner you are expected to pay a service charge to meet your share of the cost of these items. The level and type of services and work carried out will vary depending on where you live and the type of property you live in.
What share do I pay?
We will only charge you your share of the cost of shared services and repairs. We will not charge you for any work inside your home, unless the work relates to the structure of the building. To work out what this should be, we compare the size of your home with the size of the block and estate. To do this fairly, we work out the number of ‘habitable rooms’ in your home. A habitable room is any bedroom, dining room or living room, but does not include bathrooms, kitchens, toilets or halls. If you have a lease on a garage that forms part of your block, we count this as a habitable room as well to take account of your greater share in the overall structure.
We divide the total number of habitable rooms in your flat into the total for the block to give a block percentage. We make a similar calculation for your estate percentage, but this time we compare the number of habitable rooms in your flat to the total number of habitable rooms on the estate. A simple example may make this clearer. If your flat has four habitable rooms and is in a block with four other flats, all with the same number of habitable rooms, the block percentage would be as follows.
Four habitable rooms x five flats = 20 habitable rooms in the whole block.
Four rooms is one-fifth (20%) of the total of 20 rooms in the block.
You are responsible for 20% of the total charge.
In reality, very few blocks have such simple calculations and we have worked out percentages differently over the years. For example, we may have rounded figures up instead of down. You may find a difference between your flat and a neighbour’s even though they have the same number of habitable rooms. If we feel that the percentage fixed in the lease is now too high, we will charge a lower figure. On the other hand, if we find that the percentages are now too low, we cannot charge you a higher amount but people who have bought from us more recently will have to pay the correct percentage.
Estimated service charge
Every year, we estimate the following year’s service charge. You will receive this estimate of your charge for the ‘financial’ year in February or March. (A financial year runs from 1 April to 31 March the following year.) Your service charge is due every three months, on 25 March, 24 June, 29 September and 25 December.
The estimated service-charge breakdown gives the charge we are making for each service you receive. The invoice will tell you the charge you must pay every three months.
The back of the invoice sets out, in detail, the payment options available. These include paying by direct by debit, by debit or credit cards, over the internet, or by cheque.
Actual service charge
After the end of each financial year (up to the first Sunday in April), we will work out the actual cost of providing you with services and carrying out work. It takes some time to make sure that all invoices have been paid and the costs to be charged to each block and estate are correct. There is usually a difference between the estimate we have given you and the actual cost. We will send you a ‘certificate of actual expenditure’ by the last day of September. If your estimate was too high, you can get a refund (see section 6.14). If your estimate was too low, we will send you a bill for the difference
'Actual’ credits
If your actual charge is lower than your estimate we will send you a ‘credit note’. We will use the amount to pay off any amount you owe in your service-charge account. If you do not owe anything on your service-charge account, you can ask us for a refund by filling in a form that we will send you.
‘Actual’ charges
If you owe money we will send you a bill. You should pay this in the same way as the other service-charge bills that you receive.