Your service charges
explained
Content
Introduction
page 3
How we set up service chargeable contracts
page 4
Service charge items and descriptions
page 6
Understanding the paperwork we send you
page 8
The annual service charge process
page 14
How to pay your service charges
page 15
Contact us
page 16
We won’t produce a service charge booklet every year.
We’ll write to you with any minor changes and also publish
an updated booklet on our website.
We hope this booklet clearly
explains your annual service
charges and you find it helpful.
We’d love to know what you think.
Email [email protected]
or call the local office.
These notes are a guide and are not to be relied on in the event
of difficulties or disputes with your tenancy agreement. In such
cases you should take independent legal advice.
(Correct at time of writing - January 2015).
If you have any questions about your service charge please
email us at [email protected].
Page 2
Introduction
You receive information about your annual service
charge every year. We know this can be difficult to
understand so we’ve produced this booklet to help.
You pay your service charge under the terms of your tenancy
agreement. The service charge you pay will be different if you
live in a flat or a house.
Flat
House
General maintenance and
upkeep of internal
communal areas
n
Lighting in communal
areas
n
round maintenance
G
for external communal
areas for your estate
n
Lighting
n
Cleaning of hallways
n
Servicing of lifts
n
External communal
ground maintenance
The service charge you pay is detailed in your tenancy
agreement and includes your contribution to:
n
Estate costs
Includes external items such as gardening, grounds
maintenance and lighting.
n
Block costs (if you live in a flat).
Includes items such as lift repairs, cleaning, door entry systems
and servicing equipment in communal areas.
Estate management services such as servicing, cleaning and
gardening are external long term contracts (usually five years
or reviewed every year). These are service chargeable contracts
(more information on the next page).
Page 3
How we set up service
chargeable contracts
A service chargeable contract is a contract we have
with an external company (contractor) to provide
goods or services. You pay for this through your
service charges.
Examples of service chargeable contracts:
n
Repairs to blocks and estates
n
Gardening and grounds maintenance
n
Lift servicing
n
Fire alarm services.
We set up new service contracts in a number of different ways.
We follow different procedures depending on the period of the
contract and the value.
If we want a new service contract, a project manager will take
the lead. They will have a good knowledge of the service, for
example repairs to blocks and estates, and the current contract.
They will put together a project team to help with decision
making and make sure the move to the new contract is smooth.
Some of you will be on the project team to help make decisions,
shape procedures and influence service specifications.
Page 4
When we ask for companies to apply for a new service
contract, the project manager will look at value for
money and quality of service. They will also look at
current legal guidance for the new contract.
We want to make sure you’re happy with the quality and cost of
services. What you think about the service chargeable contracts
is really important to us. If you’d like to help us monitor the
standard of communal services such as gardening, cleaning or
repairs let us know.
We monitor our service chargeable contracts in a number
of ways. We:
n
Carry out estate inspections (you’re invited to join us)
n
Carry out some follow-up repair inspections
n
egularly liaise with our contractors and meet them
R
on site
n
Listen to you when you talk to us, for example to let us know
you’re unhappy with a service.
For more informtion, contact us using
the details on page 16.
Page 5
Service charge items
and descriptions
Here’s a typical list of service charge items and a description of
what they cover. This isn’t a complete list and you may pay for
a service item not listed below.
Item
Description
Administration charge
Administering and managing the services listed in your annual service
charge statement
Repairs and cleaning of carpets, curtains and other soft furnishing in
communal areas
Cleaning and removing rubbish from internal communal areas
Carpets, curtains and other soft furnishing
Cleaning
Electricity
Gardening wages/contract
Lighting to internal and external communal areas, fire alarm systems
and lifts
Labour costs such as grass cutting, pruning, sweeping and weeding.
May also include litter picking, snow clearance and rubbish removal
Water
Communal water supplies
Window cleaning
Cleaning communal windows
Door entry system
Servicing, repairs or rental to communal door entry system
Emergency lighting
Providing communal emergency lighting including servicing, repairs
and maintenance
Servicing fire alarms
Fire detection and communal smoke ventilation system servicing and
repairs
Gas
Gas for heating communal areas
Page 6
Item
Description
Lift management
Servicing, repairs, insurance and emergency telephone charges
Laundry costs
Hire, servicing and repairs to washing machines and/or tumble
driers in communal areas
Management company charges
Agents who manage the general services at a scheme
Portable appliance testing
Communal electrical appliances or appliances used by staff at
the scheme including laundry facilities, vacuum cleaner and
garden equipment
Provision of equipment
This may include lifts, fire alarms, emergency lighting and
communal laundry equipment
Refuse container hire (paladins)
Hire of bulk refuse containers (generally for blocks
of flats)
Rubbish removal (external areas)
Removal of rubbish left on the estate
Scheme Manager/ Estate Supervisor
A proportion of staff costs that may include salary and
accommodation
TV aerial system
Rental or repair of a communal TV aerial/satellite system
Scheme Manager/ Estate Supervisor
A proportion of staff costs that may include salary and
accommodation
Page 7
Understanding the
paperwork we send you
We send you a number of documents to explain the
service charges you need to pay every year. We’ll send
you some or all of the following documents.
Annual service charge consultation letter
This shows the proposed service charge
we want you to pay from your next review
date.
Service charge statement – Schedule 1
This is a forecast for the following year
of how much we think we’ll spend on
communal services.
Income against expenditure statement for communal
services,where you have a variable service charge
This shows how much we’ve spent to deliver services
such as gardening wages, electricity, repairs rubbish
clearance to your block and/or estate between
April – March for the previous year. We also confirm
if we’ve collected enough money from you and your
neighbours to cover the costs to deliver these services.
The example documents relate
to Flat 5, Knightstone Marina.
The scheme consists of three
blocks of five flats each with
surrounding communal
gardens. Flats in two of the
blocks are occupied by people
who rent their properties.
The other block houses
homeowners’. All 15 homes
contribute towards estate costs.
Examples of each
document and more
information is on the
following pages.
Page 8
Annual service charge
consultation letter
This shows the proposed service charge we want you
to pay from your next review date.
You have 30 days to let us have your comments about the
proposed service charge. We will review your comments and
make agreed changes to the service charge. It’s important you
let us know what you think in the 30 days as any received
after may not always be taken into account.
If you agree with the proposed charge, you don’t need to let us
know. We’ll go ahead with the proposed service charge unless
we hear from you.
Ref:TenRef
Date: 1 November 2014
Name 1
CorrAddr 1,
CorrAddr 2,
CorrAddr 3,
CorrAddr 4,
Corr Postcode
Dear Name 2
30 day consultation – Service charge for Address 1, Address 2, Address 3
Your service charge is due to change in April 2015. It’s
important you have the opportunity to comment on these charges.
Your proposed service charge from April 2015 is: £ x.xx per week/month
For a detailed breakdown of these charges please see the enclosed schedule.
If you agree with these charges you don’t need to do anything. If you don’t
agree, please let me have your comments by 1 December 2011 by e-mail at
[email protected], or by telephoning one of my team
at this office.
If you receive housing benefit you don’t need to contact them with this
information at this stage.
We’ll look at all comments and write to you by February 2015 to confirm the
final rent and service charges payable from April 2015.
For further information about how we set your service charges have
a look at Knightstone service charges booklet on our website
www.knightstone.co.uk\servicecharges. If you’d like a copy please let
me know.
Yours sincerely
Maureen Pinkham
Senior Rent Services Officer
Direct dial: 01934 526 267
[email protected]
Page 9
Service charge
statement – Schedule 1
This is a forecast for the following
year of how much we think we’ll
spend on communal services.
We review the previous year’s spend to
work out the forecast budget.
We’ll also work out if there are any new
costs that we’ll have to collect for during
the following year. This is good practice
so there won’t be large differences in
your annual service charge. We try to
forecast as accurately as possible but
there may be unforeseen costs during the
year, usually with block and/or
estate repairs.
Through the course of the year, we may
remove service charge items following
consultation with you and your
neighbours. If a service charge item is
removed, we will deduct any costs
we have already incurred from the
income collected and credit back any
remaining money to the service charge.
This amount will show on your Income
against Expenditure Statement, as shown
on page 13, if you have a variable
service charge.
If we agree to end a service charge,
we will confirm the date on which the
service charge will end. We will make an
adjustment to your rent account to show
that you are no longer liable to pay the
service charge. If you have already paid
money towards the service charge, this
money will be refunded to you through
your rent account.
The example on the next page
shows a
weekly service charge
statement.
Page 10
Example:
Service charge
statement Schedule 1
Service charge for:
Schedule 1 Communal Services
Flat 5
Knightstone Marina
Knightstone ref:
Service charge payable for the year
from April 2012 to March 2013
Items chargeable
between 15 homes
Depending on your financial
circumstances, you may be eligible to
claim assistance with the cost of living
in your home. The cost of services that
relate to the occupation of an individual
flat, for example heating and hot water,
have to be paid for by you out of other
income. This is why we have to show
an amount attributable to services that
are eligible for assistance and those that
are not.
Annual total Annual total
for scheme for you
see page 11
Gardening wages/contract
Electricity
Repairs rubbish clearance
Over/under spend from previous year
Administration @ 15%
£500
£200
£100
£80 CR
£108
Total for these items
£828
£55.20
Items chargeable between 5 homes
Servicing door entry system
Servicing lifts
Internal electricity
Over/under spend from previous year
Administration @ 15%
£50
£500
£100
£30
£102
Total for these items
£782
This schedule
covers internal
and external
services.
The period when
the service charge
is payable.
This shows 15
homes contribute
towards the
estate charge.
This shows 5
homes contribute
towards the block
charge.
The annual total
amount that you
will be charged.
£156.40
Total annual charge
£1610
Weekly Eligible for HB
£4.06
Weekly Ineligible for HB
£0
Total weekly charge
£4.06
£211.60
The total weekly
amount that you
will be charged.
To calculate the
weekly charge,
the annual charge
is divided by 365
days and
multiplied by 7.
You may notice
the amount will
not be exact due to
decimal roundings.
Page 11
Income against Expenditure
statement for communal
services, for variable service
charges
This shows how much we’ve
spent to deliver services, such
as gardening wages, electricity,
repairs, rubbish clearance, to your
block and/or estate between
April – March for the previous year.
We also confirm if we’ve collected
enough money from you and your
neighbours to cover the costs to
deliver these services.
We set a budget based on what we think
we’ll spend on communal services at
your scheme every year.
We have to estimate some costs, such
as repairs and electricity costs, as it is
impossible for us to know in advance
how much will be spent. At the end
of the financial year, we check the
estimated cost (Income) against the
actual cost (Expenditure) to see if
we’ve collected too much (credit) or
not enough (deficit).
Once this has been done we’ll transfer
this amount to the service charge
statement – Schedule 1. This will either
show as a credit or deficit adjustment.
We will give back any surplus (over
collection) to you and your neighbours
through the service charge. We will
collect any deficit (under collection) from
you and your neighbours through the
service charge.
Example document
on the next page.
Page 12
Example:
Income
against
Expenditure
statement
Income against expenditure statement for communal
services for the accounting period 01/04/2010 to 31/03/2011
Flat 5
Knightstone Marina
This statement shows how your under/over spend from
previous year is calculated. This statement only refers to the
items that you pay for.
Items chargeable
between 15 homes
Expenditure Income
Surplus/ -Deficit
Gardening wages
Electricity
Repairs rubbish clearance
480 170 80 450 100 100 -30
-70
20
Total for these items
730 650 -80
Items chargeable
between 5 homes
Expenditure Income
Servicing door entry
Servicing lifts/hoists
Electricity
40 350 120 50
400 90
Total for these items
510 540 Surplus/ -Deficit
10 50
-30
In this example, 15 homes
contribute towards estate
costs and 5 homes
contribute towards block
charge.
This shows how much we
have spent on communal
services during a period
1 April to 31 March.
In our example, the
amount- 80 represents
the deficit total for estate
costs of which 1/15th will be
apportioned to flat 5.
This shows the surplus
amount or deficit amount
for each item.
This shows how much we
previously estimated and
requested from you and
your neighbours during
the financial period
1 April – 31 March.
30
In our example, the amount
30 represents the surplus
total for block costs of which
1/5th will be apportioned to
flat 5.
Page 13
The annual service
charge process
We have a three stage process to
review your annual service charge:
1
We’ll
send
you:
We’ll
send
you:
n
n
n income and expenditure statement
A
n
n income and
expenditure
forAcommunal
services
relating to
statement for communal services
your block and/or estate and confirm
relating to your block and/or
any
creditand
amount
or deficit
balance
estate
confirm
any credit
owing,
if
you
have
a
variable
service
amount or deficit balance owing,
charge
if you have a variable service
charge
letter giving you a timescale (30
A
days) to raise any queries about your
n A letter giving you a timescale
communal services costs. If a query’s
(30 days) to raise any queries
received
after communal
the consultation
period
about your
services
and
an adjustment
needed,after
it will
costs.
If a query’sisreceived
bethe
dealt
with in theperiod
next accounting
consultation
and an
period.
adjustment is needed, it will be
dealt with in the next accounting
period.
22
We’ll let you know your estimated
service charge payable from your
We’ll let you know your estimated
next review date and ask what you
service charge payable from your next
think. We’ll confirm:
review date and ask what you think.
We’ll confirm:
n A
ny surplus credit amount
n A
ny
credit amount
or deficit
or surplus
deficit balance
owing from
your income
and expenditure
balance
owing from
your income and
statement
(as
mentioned
above)
expenditure statement (as mentioned
above)
n Your service charge budget and
n Y
our service charge budget and
he
T
timescale
days)
raise
n nT
he
timescale
(30(30
days)
to to
raise
3
We’ll confirm your annual service
charge payable from your next review
date. We’ll also send you a copy of
your “Rights and Obligations”.
any
queries
about
your
estimated
any
queries
about
your
estimated
service
charge.
If
a
query’s
service charge. If a query’s received
received
after the consultation
after
the consultation
period and an
period and an adjustment is
adjustment
is
needed,
it will
beindealt
needed, it will be dealt
with
with
the accounting
next accounting
period.
theinnext
period.
Page 14
How to pay your
service charges
You can pay your rent (including service charges):
n
hrough our website – click on ‘make a payment’ from
T
the homepage
n
By direct debit or standing order
n
ver the phone by debit/credit card – during office hours –
O
call your Housing Officer or speak to a member of our
Customer Contact Team 24 hours a day - call the automated
payment service T: 08548 729 729
n
By text using a debit/credit card - Register your PAYpass card
first at www.allpayments.net/textpay, then text ‘pay’ along
with your password and the amount to 81025
n
At our office by cash, cheque, debit or credit card
n
At a shop with a PayPoint outlet by cash/debit card
n
At a Post Office by cash, cheque or debit/credit card.
Please see the leaflet ‘How to pay
your rent and service charge’. It’s
available on our website:
www.knightstone.co.uk
or please call our local office if
you’d like a copy.
Page 15
Get in touch
[email protected]
Weston Gateway Business Park,
Weston-super-Mare, Somerset BS24 7JP
T: 08458 729729
Alternative format request
If you need this information in
another format please contact us.
October 2013
Page 16