Block Management: Services Charges Explained

So, you’ve found yourself the dream apartment that has everything you want! That’s great, but before you sign the lease and tie yourself to this building for months, you need to understand precisely how much you will be paying for it. Alongside rent, tenants usually have to pay a service charge. This is generally paid separately to rent at only once a year. But, if you don’t talk to the landlord before this or thoroughly read your lease, you could find yourself paying even hundreds of pounds you never expected to – and might not have.

To make sure this doesn’t happen to you, read the following blog to understand all about service charges, what they can cost, what they are for and why you have to pay them.

What are Service Charges?

Service charges are fees that most tenants pay to cover their share of the maintenance cost for the building they live in. This usually includes repairs to outside areas of the building such as the roof, pipes and drains as well as communal areas internally. This can also be the cost for shared services such as a cleaner or caretaker. Also, it can cover the buildings insurance as well as the freeholders’ administration or management charges.

Although you may not use some of the services, you still usually have to pay your share. This makes every tenant equal, and responsible for the maintenance of the building. For example, even though you may live on the ground floor and never use the lift, you may still have to pay something towards its upkeep.

What Types of Service Charges are There?

So, what service charges am I meant to pay? There are different service charges you could be required to pay, and the easiest way to find out is to check your lease. Some leases may be more specific in the details of what the service charge covers whereas others may only say general services. However, if your lease doesn’t have this clause, then you don’t have to pay for anything that isn’t included. So, if your landlord comes around asking for money for the roof, and it’s not included in your lease, you can deny them this legally.

But, to avoid arguments with your landlord over your lease, it is recommended you get some advice. If the lease is too vague about its service charges, then you may be able to ask a tribunal to change it. This means your landlord can’t ask you for money you don’t owe, nor argue that the specified maintenance is included in the service charge, though it was not explicitly mentioned.

How Much are Service Charges Going to Cost Me?

Service charges range in price depending on how much maintenance the landlord wants to cover with them. Moreover, the more expensive the apartment usually, the more costly the maintenance will be as everything is of a higher value. So, the only way to honestly know is to ask the landlord before you sign your lease, how much you would be paying and what exactly for. Also, service charges are variable, meaning the amount you pay could change every year.

If you haven’t spoken to the landlord before moving in, then you need to check your lease. Your lease should say what services you have to pay for and when, and whether there is a sinking fund. They should also explain how the service charges are calculated and divided among the tenants.

Your lease should say when you should pay your service charge, which can be paid annually or more frequently. You don’t have to pay the service charge until the landlord sends you a request for payment and a summary of your rights and obligations.

Are There any Charges for Major Work?

If your tenant wants to set up a new charge such as cleaning that will cost you more than £100 a year, then they must consult you first. This is the same for repairs that will cost you more than £250, to protect you from your landlord demanding large amounts of money from you without cause.

Before arranging the repairs or services, the landlord must tell you what they plan to do and why this is needed as well as provide an estimate of the total cost of the work. If the landlord is repairing or improving something, they must provide at least two estimates. Once this is done, you have the right to comment on the work and suggest alternative contractors that could lower the cost. However, if the repairs are urgent, the landlord can go ahead with the work before you have the chance to do this.

If you do feel like you were not adequately consulted, then you can take legal action through the tribunal. You could result in not having the pay for all of the service charges as the landlord neglected his duties.

Managing your building can be complicated without the right knowledge of service charges and tenants rights. If you think your building could do better in more experienced hands, then contact us today for more information on our block management services.

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