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Your Leaseholder Service Charges explained

Estimates and Actuals - How Service Charges work

We do not make a profit on service charges. They are a direct re-charge of expenditure made to deliver services to your block in line with our responsibilities within your lease. Estimates and Actuals are sent out in line with the terms of you lease.

Covid-19 - Estimates were sent out prior to Covid-19 and were based on a full regular service. If services reduce or increased (for example additional cleans) we will reflect this in the actual costs for 2020/21 which you will be notified of in August/September 2021.

Estimates

Service charge estimates are sent out in March each year for the coming year's contribution toward services, or works provided to the block or estate where your property is located. These must be paid by equal quarterly instalments, as set out in the lease agreement, in advance, on the first of each of the following months; April, July, October and January.

If you prefer to pay your service charges monthly, it is important that you contact us to let us know. If we have not recorded your instalment plan, you may receive reminder letters from us.

Estimates are calculated by looking at previous year’s final costs (for example estimates for 2019/20 were based on 2017/18 final accounts) we also apply any known variances. The total cost is divided by the number of flats in your block. We count flats that are occupied by tenants as well as leaseholders.

You will receive four demands with the estimate, one for each quarter at the beginning of the financial year. They are sent together in one mail out to help save costs.

Actuals

In August/September each year you will receive a notification of the actual cost of providing all services for the previous service charge period. The estimate and actual cost will be set out in a Certificate of Actual Expenditure.

This is done when the previous financial year has ended, and when the accounts have been finalised.

If your estimated service charge was too low this will show as a debit and you will need to make payment straight away or contact us as soon as you receive the certificate to make an arrangement to spread the payments over the remainder of the financial year.

If your estimated service charge was too high we will let you of the credit to be put on your service charge account. If you pay by direct debit you do not need to do anything, we will inform you separately of any changes to your payments.

Individual costs calculations

Buildings Insurance

This charge is for the structure and communal areas of flat blocks only. Details of the insurance policy is available on the Leaseholders Buildings Insurance page.

The charge for insurance is based on premium costs. The contract runs from 1 October to 30 September each year.

In a bid to keep to keep costs as affordable as possible for residents, the contract was retendered during 2018 and is now lower than with our previous insurer and lower than what had been forecast. All costs and reductions will be passed on to leaseholders via the final actual cost and will be shown each years certificate. The number of claims made during the year may affect the final costs.

You must still arrange your own insurance for the contents of your home. We have arranged a special scheme which is open to all tenants and leaseholders called the Crystal Insurance Scheme. Under this scheme it is easy for you to protect your belongings at a special low cost rate.

Find out more about arranging your home contents insurance.

Repairs

The repairs service charge covers the cost of making day-to-day repairs to the structure and fabric of your flat block and to its communal areas. The amount charged varies from block to block depending on what work has been carried out.

The repairs charge may also include other costs, such as: emergency lighting inspections and repairs, lift maintenance, fire alarm testing, dry riser testing, fire hydrant testing, asbestos reports, lightening protection testing and Fire safety checks. Only blocks that require these services will have costs included.

It is very difficult to estimate what the responsive repairs will be for the year ahead, and if there are urgent works required during the year, this can result in a difference between the estimate and the actual cost.

You can report a communal repair online.

Report a repair to a communal area - opens new window

Major works

The cost of major works are excluded from service charges and are invoiced to you separately (this is because they are often large one off costs and we can work with you in respect of a payment plan) on completion of the work. We will always formally consult with you (via a process called Section 20 Consultation), prior to any works being commenced. For information about programmed works please see the Current Major Works pages.

Window Cleaning

This charge covers the cost of cleaning windows in the shared areas four times a year. The charge varies from block to block. The window cleaning service will not clean the windows belonging to your flat.

Management Fee

This covers the cost of administering the service for leaseholders only, including leasehold management, creating, calculating and sending service charge estimates and actuals, staffing costs, printing costs etc.

Third Party Management Charge Administration Fee

If your services are delivered by a third party management company, their cost is paid initially by the council and then passed on to you.

Comments and Queries in relation to service costs on the certificate

If you have any queries with regards to the service charge actual certificate, please contact the Leasehold Team without delay.

Please ensure your query is raised within 21 days of receipt of your certificate and please clearly outline your query including specific information such as the element of the service charge it relates to.

The more information that you can provide us with, will enable us to respond following an investigation.

If you have any suggestions, we are happy to hear from you and believe that by working together we can improve our services.

Leasehold Team

leaseholdincome@stevenage.gov.uk

01438 242666

© 2020 Stevenage Borough Council