You have a variable service charge: this means the amount you pay changes every year, depending on how much your services cost. This is why we send you a final account statement. It shows how the actual cost of providing your services from 1 April 2019 to 31st March 2020 compared with the estimated cost we sent you in February 2019.
How do you work out my service charge?
We use a variable system to work out your service charge because this is a term of your lease. This means that every year we estimate the cost of each communal service and charge you for your share of that estimation. We work our your estimate by analysing past costs for your services and taking both inflation and the contractors' cost into account. We then fully review all costs incurred during the financial year and send a statement showing any differences in September.
Do I have to pay the service charge?
Yes, it's a condition in your lease which you signed when you purchased your home.
What legal rights do I have to challenge the service charge?
You can challenge the reasonableness of a service charge or its standard at the First-tier Tribunal. Please refer to the 'Summary of your rights and obligations' for more information. We recommend you get independent legal advice before doing this.
What is a reserve fun for?
These are funs that are set aside for future work to your building or block. You may see one or more of the terms on your statement.
- Cyclical fund - this is to redecorate the interior and exterior communal areas of your building.
- Sinking fund - this is for major work like window replacements or roof repairs.
- Replacement fund - this is for replacing carpets or other equipment.
- CERF account - this stands for Capital Expenditure Reserve Fund. If you have this kind of account, it may also include all of the above funds.