The purpose of the Service Charge Policy
The purpose of the policy is to set out the calculation and billing of service charges for all homeowners (leaseholders and Section 16 freeholders) of the London Borough of Sutton (the Council).
To recognise the legal and regulatory requirements on the Council in respect of service charges and consultation.
The Policy Statement
Equality and Diversity
The Council operates a policy of equality and diversity. This means that no person will be treated less favourably than any other person because of their race, religion or belief, gender, sexual orientation, disability or any other matter that would cause a person to be treated with injustice.
An Equality Impact Assessment has been undertaken to ensure this policy is fair and equitable to all leaseholders regardless of their race, religion, age, gender, sexual orientation, disability or any other matter that would cause a person to be treated with injustice.
Communication and consultation with all homeowners will be of a form and type suitable to accommodate the specific needs of homeowners.
Service Charges
Service charges are levied in accordance with the Landlord and Tenant Act 1985 (as amended) in respect of services repairs and improvements provided by, or on behalf of, the Council.
• Leaseholders are required to pay service charges under the terms of their individual lease agreements.
• Section 16 freeholders are required to pay service charges under the terms of their individual legal agreements.
• Sutton Housing Partnership undertakes leasehold management on behalf of the Council.
• Sutton Housing Partnership will advise homeowners of any changes in legislation that may affect levying service charges.
• Sutton Housing Partnership will consider affordability when setting charges, and will aim to keep the level of service charges as low as possible. This aim is, however, within the context of providing necessary levels of service as contracted with, or agreed by, leaseholders and tenants and also within the broad principles of giving the best value for money.
• As well as ensuring that the service charges represent value for money, all services will be provided to reasonable standards as specified in our service standards. Sutton Housing Partnership will provide homeowners with information about individual service contracts in order that they may be aware of the levels, frequency and quality of services to expect.
Consultation
Sutton Housing Partnership will ensure consultation is undertaken in respect of works or services, to comply with the terms of individual leases and the relevant legislation: in particular, the Landlord and Tenant Act 1985 (as amended) and the Commonhold and Leasehold Reform Act 2002.
Level of Service Charges
Service charges will be apportioned to homeowners according to the terms of the lease agreement or Section 16 agreement.
• Sutton Housing Partnership will maintain a comprehensive monitoring system to ensure that only costs reasonably incurred as a direct result of providing services are attributed to services and recharged to leaseholders.
Charges in respect of Major Works and improvements.
We will levy leaseholder charges in respect of any major repairs or improvements within 3 months of the works reaching ‘practical’ completion. Leaseholders who are unable to meet the cost of service charges in respect of repairs and improvements will be encouraged to seek independent financial assistance. Where mutually agreed, we can refer the leaseholder to the Citizens Advice Bureau (CAB).
If a leaseholder is unable to secure a loan by these means the Council, acting as the lender of ‘Last Resort’, may offer the following:
• Interest free instalments over 12 months or 24 months.
• Discretionary loans - the terms of the loan will depend on the level of service charges and leaseholder circumstances.
• Discretionary loan, repayable on assignment – the debt is registered as a charge on the property and repaid when the property is sold or transferred.
[note these options will not apply to leaseholders who are sub-letting]
Review of Policy
The homeowners service charge policy will be reviewed annually in partnership with the Sutton Leaseholders Association and communicated to all homeowners.