charges and insurance

Leaseholders and Freeholders may have a small ground rent to pay, although most have nothing. Please check your lease to see if you should be paying ground rent. Any ground rent that you are expected to pay is set out in the Annual Budget. 

If you are a Shared Owner you will pay us rent on the remaining share of the property that we own. 

If you pay rent, it will be reviewed every year in line with the terms of your lease. You will be notified in writing and provided with 30 days’ notice of any new rent charges.

Service Charges are the charges that leaseholders pay to cover the actual costs to run the building or estate. These services are defined under the 1985 Landlord and Tenant Act as: “services, repairs, maintenance, improvements or insurance or the landlord’s costs of management”.

These services are defined in your lease that we supply or contracted out. Services can include:

• Cleaning communal areas: these will be areas cleaned by a contractor in any shared area described in your lease. Usually these would be communal corridors, entrance halls, lifts, staircases etc.
• Grounds maintenance and estate maintenance: grass cutting, hedge and shrub trimming etc.
• Window Cleaning: cleaning of communal windows and sometimes windows in apartments that cannot be cleaned safely by the leaseholder.
• Water: if there is a communal water supply.
• Electricity: used in communal areas for lighting, door entry systems, fire alarms etc. This is sometimes called the Landlord Supply.
• Lift: for the inspection, servicing, emergency phone (if there is one) and repair of any lifts.
• Door Entry System: servicing and repair.
• CCTV: for the servicing and maintenance of the system.
• Fire Safety: running, maintaining and servicing fire alarm systems as well as any firefighting equipment.
• Emergency lighting: includes the inspection, servicing and maintenance of any emergency lighting system. 

How service charges are calculated

We calculate the cost of services for each building or estate before 1^st April every year. This is calculated by looking at previous service charge costs and anticipating any changes to costs for the next year. For example, if we know that the insurance will go down or the electricity will go up, the Annual Budget will reflect that.

The charges are calculated by anticipating the full cost of all the services which are then divided by the number of leaseholders who receive the services. These anticipated service charge costs are sent to all leaseholders in the Annual Budget.

At the end of every financial year we work out the total income we have received from service charges and subtract the actual costs that we incurred for the services. If we have collected too much, we will reimburse the accounts. If the shortfall causes your account to to go into arrears we will ask you to pay this.

Each scheme has its own service charge, there is no cross subsidisation from one building or estate to another.

If you are a leaseholder you will pay for any repairs or planned maintenance on your property. If this is a normal day to day repair, then the cost is charged back to you through the service charges. If there is any major work planned, like a new roof, then this will either come from your sinking fund or you may be invoiced directly.

In the Annual Budget we try to anticipate the number of repairs that are going to be reported for the next year to help us work out what you will need to pay. At the end of every financial year we work out the total income we have received from service charges and subtract the actual costs that we incurred for the services. If we have collected to much collected, we will reimburse individuals’ accounts. If there is a shortfall or deficit we will invoice individual accounts.

If you are a leaseholder, we are responsible for insuring your building. We look to insure buildings at a competitive price and the cost of this is included as a service charge and itemised in the Annual Budget. We will regularly review the quality of the insurance cover and cost to ensure it provides value for money. We will consult with you on any changes we propose regarding the insurance provider.

Most freeholders are responsible for insuring the buildings they own, but some freeholders also have a building insurance charge where we are required to insure the building. Please check your Deeds for further information.

Your Annual Budget will identify if we insure your building, but if in doubt, please contact the Sales and Leasehold Team. 

Our cover

If your building is insured by us, our insurance policy covers the exterior and structure of the building, any communal areas and some internal fixtures. It does not cover the contents of your home, this is something that you need to insure yourself to cover your belongings.

The summary of cover provides a summary of the features, benefits and limitations of the insurance cover we provide and we are happy to provide an electronic copy free of charge.

Sub-letting your home? 

Before you sub-let your home, you should have asked us for permission under the terms of your lease. If you have not told us the property is sub-let, or we haven’t given permission, your insurance claim may be affected. We also recommend you contact your insurer about any contents insurance you have taken out at the property.

Changes 

Some changes to your circumstances can affect your insurance. Every year we will write to you to remind you of any changes you should tell us about. For example sub-letting your home or making any alterations or improvements to the property.

Damage

If you, or anyone living in or visiting your home causes any damage to the communal parts of a building, you are responsible for repairing the damage, or paying us to repair it. This also applies to fixtures and fittings damaged through neglect or carelessness.

If any damage is caused to your home because of an accident in an adjoining property (for example a flood), then you can claim on our property insurance. If you need to do this, please contact the Sales and Leasehold Team who will be able to help you with this. Please don't start any repair work before the insurance have agreed to pay, otherwise you may be liable for the full cost of the repair.

Making a Claim

We hope you never have to make a claim, but if you do we aim to make it as easy as possible. Please contact the Sales and Leasehold Team for a buildings insurance claim form. We will send you the form, having completed the details about your policy number and the date your insurance started. We will also sign to confirm that you have insurance cover.

Once you have completed the claim form you should return this to the address on the claim form.

If you have any queries once you have completed and returned the claim form, please contact the buildings insurer directly. You will need to quote the full policy number in any communications with them. This will be on the claim form we provide and on any renewal letters. You may need to supply two estimates for any repairs when submitting your claim.

The buildings insurer will contact you within 10 working days once they receive your claim form.

With most leases, we are responsible for ensuring the building is well maintained. This includes replacing and improving major parts such as a new roof or replacement windows. Whilst it is our responsibility to arrange this work, it is the leaseholders responsibility to pay for it.

The lease usually states that the cost should be paid on demand, but we know that this can cause financial difficulties for residents.  So, to offset potentially high costs for planned and major works, some buildings or estates have a sinking fund (also known as a Reserve Fund in some leases). The sinking fund then allows the costs, which should be paid for on demand, as per the lease, to be lessened.

Sinking funds are paid into equally by all leaseholders. It is a separate fund to other service charges and is specifically collected to pay for, or contribute to, major works. We carry out Stock Condition Surveys to assess and monitor the lifespans of each component of the building (roof, windows, lifts etc) and our estimates are detailed in a 30-year plan.The level of contribution into the sinking fund is reviewed each year and is calculated by looking at the 30-year plan for each component and dividing the cost by the expected lifespan.

The level that you will have to contribute into the sinking fund will be itemised in your Annual Budget. There will also be a statement of the sinking fund.

Monies held in the sinking fund are held in ‘trust’ in an interest-bearing account. The interest received is added to the sinking fund and is shown in the audited accounts. Sinking funds are funds for the property and they cannot be withdrawn by the leaseholder.

Where the cost of the works exceeds £250 per person we will always follow the Section 20 consultation process.

Typical planned works which the sinking fund would be used are:

• Roofs, guttering, pointing
• External drainage
• Footpaths, parking areas, access roads (where not adopted)
• Communal Lighting and power
• TV aerial systems
• Lifts
• Door entry systems and warden call systems (where fitted).

Expenditure on minor repairs to any of the above would normally be met out of the service charge account.

If you are planning to sell your home please check with your solicitor to see if you will have to pay a lump sum into a sinking fund when you assign the lease to the new leaseholder. 

Just like service charges, management fees are calculated based on what it costs us to manage the building or estate, this is then shared out equally between the leaseholders.

We try to keep the management fee as low as possible. In fact, the actual cost to us is considerably higher than our current management fees.

Here are just some of the things we do for you that is included in your management fee. 

• Scheme inspections
• Communicating with residents and responding to enquiries
• Advising on lease or legal matters
• Managing contractors
• Arranging and holding residents meetings
• Managing and consulting long term services
• Ensuring compliance with legislation
• Removal of fly-tipping and unwanted rubbish
• Taking meter readings and liaising with utility companies
• Planning and managing major works 
• Setting, monitoring and managing the annual budget
• Setting up payment plans and Direct Debits
• Arranging fire risk Assessments
• Conducting regular safety tests and inspections
• Dealing with anti-social behaviour and neighbour disputes 
• Monitoring surveillance equipment
• Helping with insurance and criminal damage claims
• Advising on the assignment and staircasing
• Helping both sellers and purchasers

These are sometimes included in the service charges and cover the costs incurred in contracting a specialist when necessary.

In the lease we are usually able to charge these costs back to the leaseholder, shared owner or freeholder. These services are usually for things like an accountant to audit the accounts or a specialist to carry out a Fire Risk Assessment.

These costs are then allocated equally to all the residents in the service charges.

We estimate the cost of services for each building or estate before 1^st April every year. This is based on previous costs and anticipating any changes for the next year. So, if we know that the insurance will go down or the sinking fund needs to go up, the Annual Budget will reflect that.

The charges are calculated by anticipating the full cost of all the services which are then divided by the number of leaseholders who receive the services. These anticipated costs are then sent to all leaseholders in the Annual Budget

At the end of every financial year we work out the total income we have received from and subtract the actual costs that we incurred. The accounts are then verified by an independent accountant for buildings where there are more than four leased properties. If we have collected to much collected, we will reimburse individuals’ accounts. If there is a shortfall or deficit we will invoice individual accounts.

Copies of the audited accounts will be sent out with accompanying notes explaining the detail, usually before the end of September.

Each scheme has its own budget, there is no cross subsidisation from one building or estate to another.

We offer a number of ways to pay your rent and service charges click here to find the way that suits you! All payment dates can be found  in your lease and on invoices from us.

We know that its not always easy to mange your money, so if you are having difficulties paying your rent or service charges, or wish to discuss your account, please contact us. We are here to help.