Annual accounts

Any money you pay a landlord as service charge is held in trust by the landlord. The landlord has your prior permission to spend this money on certain things, as agreed in the lease but must explain how it was spent.

Accounts will usually be issued six months from the end of the accounting period, usually the financial year. The accounts will show how much was originally estimated and how much was actually spent. The actual costs will either be more or less than what was estimated.

The accounts will also show how much has been collected and put into a reserve fund. A reserve fund is an amount of money set aside to cover the future costs of major works.

Check the accounts

When you receive accounts it is your opportunity to scrutinise how your money has been spent. You should do this and ask your landlord if you have any questions.

If more money has been spent that what was originally estimated, this will result in a deficit on the account. This amount will be divided by the flats in the building and billed out as a surcharge. You would need to pay this in addition to any other ongoing monthly service charge you are paying.

If less money has been spent than what was estimated, this will result in a surplus on the account. A surplus will be carried forward to the following year's service charge estimate so that your charges for that year are reduced accordingly.

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.