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A Guide To
Service Charges
Useful information about charges
& the services we provide
February 2014
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Introduction
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A Guide to Service Charges
This guide explains how your service charges are calculated and
billed, in accordance with your property lease.
The requirement for you to pay service charges is set out in your
lease. The Council, as your landlord, has to make sure that those
charges represent a fair and reasonable proportion of the costs of
managing, maintaining and providing services to your flat and the
block as a whole.
For 2014/15 charges will be made for the following services where
they are provided:
• Buildings insurance (but not contents)
• Lighting and electricity
• Cleaning • Repairs
• Lifts • Management fee
• Heating
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Contents
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1. Service charge and ground rent –
your bill and making payments 1.
2. Year-end reconciliation/
certificate of actual expenditure
1.
3. How we calculate the service charge 2.
Buildings insurance
2.
Lighting and electricity
3.
Cleaning
3.
Repairs
4.
Lift maintenance
4.
Management fee
5.
Heating (applies only to properties connected
to district heating with prepayment meters)
5.
4. Changes to services 5.
5. Annualised billing - questions and answers 6.
9.
6. Useful contact numbers
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1. Service charge and ground rent – your bill and
making payments
———————————————————————————
In February each year, we will send you an estimate of annual
charges for the forthcoming financial year (1 April to 31 March),
together with a payment schedule. This will include the annual
ground rent for the year ahead. The Estimate of Annual Charge
will normally be payable in four instalments but we will tell you if
other payment schedules are available.
For 2014/15 the first instalment of the charge will be due in April
and will be for just £10 to cover the annual ground rent. The
remaining amount will be payable in instalments due on the first
day of August, November and February.
From 2015/2016 the payment schedule will normally be
quarterly, due on the first day of April, July, October and January.
We recommend that you pay by direct debit, although other
options may be available. If so, these will be explained in your
estimate of annual charge.
2. Year-end reconciliation/ certificate of actual
expenditure
———————————————————————————
At the end of the financial year (31 March) we will reconcile
all the actual costs of services which were provided and
calculate the reasonable and proper proportion due from each
leaseholder. We will send you a ‘certificate of actual expenditure’
by the last day of September to confirm your precise charge for
that year. The certificate will include an invoice if you have under
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paid by £30 or more. If you have over paid by £30 or more, we
will send you a refund.
Any underpayment or overpayment of less than £30 will normally
be carried forward and show as an adjustment to the next
estimated annual charge. This means if you paid less in year one
than the actual charges for that year we will tell you during year
two and the amount will be used in calculating your estimated
charges for year three.
3. How we calculate the service charge
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Apart from buildings insurance, the charge will be the actual
cost of the service provided to a block divided equally across
all properties in that block. The same charge applies regardless
of how much each flat benefits from a particular service. This
means, for example, that a ground floor flat has the same
service charge for lifts as a flats on an upper floor in the same
block - and a flat with its own entrance has the same cleaning
and electricity charge as other flats in the same block which are
accessed only via a communal entrance.
Buildings insurance
The Council will arrange to insure your flats and the building as
a whole against a range of perils. The most cost effective way
to do this is to arrange cover for all leasehold properties with a
single insurer. We can send you a key facts policy summary and
booklet if you would like more details.
The estimated charge will be based on the latest annual
insurance premium and the best information available regarding
future insurance premiums.
The actual charge will be calculated by dividing the actual
premium(s) paid by the total number of leasehold properties on
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the first day the insurance covers. If the insured period is not the
same as the financial year (1 April to 31 March) a proportion of
each premium relating to the financial year will be included.
Lighting and electricity
This covers the cost of electricity used for all the shared facilities.
This includes, for example, lighting in entrance halls and
stairways, power for any lifts and door entry systems and for
any other electrically powered equipment provided to the block.
You will not be charged where an electricity supply is purely for
external dusk to dawn lighting and/or television signal amplifiers.
Your estimated charge will be based on recent annual power
consumption, determined by actual meter readings and the
forecast cost of electricity.
The actual charge will be the amount paid for the electricity to
the block during the financial year. Whilst we will try to take and
submit electricity meter readings at least annually, there may be
occasions where this is not possible and the amount we paid
may be based on estimated readings.
Cleaning
This charge covers the cost of cleaning internal communal
areas such as entrances, corridors, walkways, balconies and
lifts. The cleaning service is not compulsory and residents of a
block can arrange cleaning themselves, as long as standards are
maintained to the satisfaction of the housing manager. If they are
not, the housing manager could introduce the cleaning service at
their sole discretion.
The estimated charge will be based on our cleaning contract
pricing and the productive hours spent cleaning each block.
The actual charge will be the amount charged to us during the
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year by the cleaning contractor for all cleansing in the block,
including one-off cleans carried out on specific request.
Repairs
We sometimes have to make repairs to communal parts of your
block (including following vandalism). These could include, for
example, the roof, exterior walls, windows (but not the glass
in windows to individual flats), guttering, sewers and drains,
external decoration, communal paths etc.
You will not be charged for repairs to external dusk to dawn
lighting and/or television signal amplifiers if they are the only
electrical equipment at your block.
As the need for repairs is hard to predict, the estimated charge
will be based on the recent record of repairs.
The actual charge will be the cost of day-to-day repairs and
maintenance of the internal and external communal parts of
the building, including the exterior structure, paid for during the
charging year.
Major planned works are not included in this category and
you will be invoiced separately for these. We are required by
law to consult with you before starting any work which will
cost you over £250 or entering into any long term agreements
that you would be required to contribute towards.
Lift maintenance
This covers communal lift repairs and maintenance, emergency
call-outs and periodic major servicing. The lifts in our blocks
are included in a long term maintenance contract for all lifts in
Kirklees Council owned buildings.
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The estimated charge will be based on the lift maintenance
contract pricing.
The actual charge will be the amount charged to us during the
year under the contract.
Management fee
A management fee of not more than 10% will be added to the
net total of all the service charges except heating, representing
a contribution toward the costs of service charge administration,
collection and the cost of preparing your account and Certificate
of Actual Expenditure.
Heating (applies only to properties connected to district
heating with prepayment meters)
If you have a heat meter, the tariff it is set to include a daily
standing charge. As well as covering the usual utility company
costs such as meter reading, maintenance and the gas
emergency service, the standing charge includes a share of
the cost of servicing and maintaining the heating plant and the
distribution system between it and your home. No management
fee is added to this sum.
4. Changes to services
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If any new chargeable service is introduced at your block midyear, we will let you know and advise you of the likely cost.
Even though the cost of services for the year will change, your
existing payment schedule and amounts will not be changed,
nor will they change if a service is ceased. When we send your
Certificate of Actual Expenditure after the year end this will detail
the actual cost of services in your block during the year and at
that point the rules on overpayments/refunds in section 2 will
apply.
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5. Annualised billing - questions and answers
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Q. Why are you moving to annualised billing?
A. Annualised billing is common amongst local authorities and
private landlords. We’ve consulted with our Leaseholder
Forum members, who recognise the advantages of fewer bills
and a payment schedule, which makes budgeting easier.
It’s also better for the Council, as it means it doesn’t have to
pay all the bills first and then send invoices out for leaseholder
contributions.
Q. How will my charges be calculated?
A. This is explained in section 3 .
Q. How can you estimate the charge for repairs that have not
been carried out?
A. We cannot predict whether repairs will be needed so we will
base the estimated cost on the recent history at your block.
We will review the cost of repairs to your block half way
through the year; if it looks sensible to change the amount of
your remaining instalments, we will contact you and offer you
the option to change.
Q. How will I know repairs have been done?
A. You will receive notification through the post each time your
block is repaired. This alerts you to the fact that a repair is due
to be carried out and that you will incur a charge. You should
keep all notifications as you can use them to check that your
charge for the year is correct.
We can provide you with a printed breakdown of your repairs
upon request. There is a fee of £10 for this information.
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Alternatively, you can arrange to come into our office and look
through the reports. Please contact the Home Ownership
Team for further information. Tel: 01484 416843
Q. Do I pay the same service charges for the same services as
a council tenant within my building?
A. Your charges are a fair and just proportion of the actual cost of
services and no more. Tenants’ service charges may appear
to differ from yours, but this is due to the way the Council
fixes service charges for tenants each year when it sets rents
for the year ahead. Any difference means some or all of the
tenants’ charge is being paid as part of their rent.
Q. When will my bill be sent?
A. The estimate and payment schedule will usually be sent in
February for the new financial year beginning on 1 April.
Q. How will I pay my charges and what are my payment
options?
A. These are set out with the estimate of annual charge.
Q. Can I pay the full estimated charge in one amount?
A. You can pay the full amount at any time you choose, as long
as the amount shown in each instalment has been received
by the due date; otherwise your account will be in arrears.
Q. My lease says you cannot demand that I pay service
charges more than a quarter of a year in advance. Why are
you billing me for a whole year ahead?
A. The estimate of annual charge is not a demand for payment
of the whole amount. The payment schedule means you are
only being asked to pay a proportion at a time throughout the
year; this means you will never be paying more than a quarter
in advance.
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You could send us payments more frequently if you wish as
long as the full amount of each instalment has been received
by the due date.
Q. What should I do if I’m in financial difficulty and can’t pay on
time?
A. If you are in difficulty then its best to let us know about your
circumstances and we will aim to take a sensible approach.
We also have a specialist money advice team who can help.
Being in arrears with your service charges could ultimately
lead to legal action and forfeiture of your lease. However,
the Council will not take formal legal action without giving a
clear explanation of the reasons and adequate warning of the
proposed course of action.
Q. What happens if I over/underpay during the year?
A. This is explained in section 2.
Q. What if I disagree with my bill?
A. If you disagree with any charges, you need to write to the
Home Ownership Team clearly stating the nature and reason
for the disputed charge. You must continue to pay the
element of the charge not in dispute. We will not try to recover
the disputed element of the charge until it has been fully
investigated.
If you do not accept the Home Ownership Team’s decision,
the dispute will be considered a formal complaint and dealt
with through KNH Complaints Procedure. If the dispute
cannot be resolved then either you or KNH have the right to
apply to the Property Chamber for a judgment. Tel: 0845 100
2614 or 0161 237 9491
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Q. What If I buy or sell a leasehold property during the year?
A. As charges for the current financial year are estimates we will
advise solicitors to hold a retention as part of the purchase
until the next certificate of actual expenditure is issued.
Q. Do you have any plans to increase my service charges?
A. When we estimate your service charges we will take into
account any likely increase in the cost of services in the year
ahead.
There may be other services within the property boundary
that the Council currently pays for in full, such as caretaking
and grounds maintenance. Many landlords pass a proportion
of those costs on to leaseholders. A review of service charges
may be considered by the Council in the future, but there
will certainly be no changes before 1 April 2015. The Council
would also be legally required to consult with you before
introducing any new service or service charge.
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Useful contact numbers
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Your money
Benefits advice:
01484 414950/ 01924 326010
Money advice: 01484 414886
Help with problems
Home Ownership Team
01484 416843
Perseverance House
Saint Andrews Road
Aspley
Huddersfield
HD1 6RZ
First Tier Tribunal
(Property Chambers)
www.justice.gov.uk
0845 100 2614
or 0161 237 9491
Residential Property
First Floor
5 New York Street
Manchester
M1 4JB
[email protected]
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Ref: KNH/4/08.02 Printed on recycled paper.
Kirklees Neighbourhood Housing is controlled by
Contact KNH
Kirklees Metropolitan Council under Part V
of the Local Government and
Telephone: 01484 414886 www.knh.org.uk email: [email protected]
KNH Communities
Housing Act 1989.
@KNHKirklees
Text Relay - Deaf and hearing impaired customers can
contact KNH by dialling 18002 + 01484 + 414886
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