Service charge

Throughout any year, most work is paid for from the building's day-to-day service charge fund. Major works, cyclical decorations and other works that take place at intervals of more than a year are usually paid from the building's reserve fund.

You will have a lease that entitles you to occupy a flat for a set term, but this is subject to you observing certain requirements. One of these is that you pay the service charge.

How we set the service charge

Your lease will require you to pay in advance towards the cost of running the building so that there are available funds to cover any costs.

Your lease will probably allow you to pay monthly, but some leases may require payment at different intervals during the year.

The monthly (or otherwise) service charge that you pay is based upon an annual estimate. It is an estimate because nobody can know all of the costs that may be incurred by a building in advance of a year.

Sometimes fluctuations in energy costs, repairs or other unforeseen events can result in extra costs.

New buildings

The best way to set an estimate is to review the actual costs for previous years. This is not possible for newly built buildings, so for the first three years service charges can fluctuate significantly from year to year.

If you have been granted a lease to a flat in a brand new building you should bear this in mind.

The landlord must provide you with an annual account of how the service charge has been spent.

What is the service charge?

The service charge represents costs associated with the building and common parts. Your lease will require that you pay a share of the building's costs.

Typically a service charge will include:

• management fee
• buildings insurance
• audit fee (the cost of auditing your accounts)
• cleaning of shared areas
• gardening/grounds maintenance of shared areas
• repairs to shared areas
• lighting shared areas
• an amount to be transferred to a reserve fund.

More information

If you would like more information about any of this, please speak to your Property Management Officer. If you do not know who your Property Management Officer is, or do not have their contact details, you can find out instantly by typing your postcode into the simple form on the Property Management Officer finder page.