Service or estate charge explained

A service or estate charge is the way in which the costs of providing the services outlined here are met. Service and estate charges are allocated evenly (or as set out in a lease or transfer document), so that those who have the benefit of the common parts of the building and external grounds contribute to their share of the usage.

How the service charge is allocated is usually set out in your lease or title/deeds.

Usually, the charge is split equally if the individual properties within the development are just apartments or just houses. If, for example, a private estate contains both apartment buildings and houses, the overall service charge is split between costs for the estate as a whole (for example maintenance of any roads not adopted by the local council) and costs relating just to the apartment building(s), such as lift maintenance. The first set of costs are allocated equally across all properties on the development and the second set of costs allocated equally across all apartments only.

Typically, the total service or estate charge includes the following:

• Monies needed to pay contractors for ongoing maintenance, including their time and third party costs.
• Monies or provisions needed for repairs.
• Monies or provisions needed to pay for cyclical, longer-term redecorations or maintenance.
• Monies needed to pay for insurance.
• Monies required for non-discretionary upkeep, such as meeting Health & Safety obligations, statutory reporting, billing and information provision.
• Monies needed for the services of the managing agent.
• VAT and IPT (insurance premium tax) as applicable on all the above.

The service charge budget is an estimate of your share of the likely costs for the coming year and is payable in advance. The budget is based upon experience in previous years and known items of expenditure.

The year-end service charge account is a statement of actual spend over the past year and your share of those costs. When we send you the year-end service charge account, we include a summary of the amount you paid at the start of the year for the service charge budget, as well as the difference between the two. If the year-end service charge is higher than the estimated budget, you will need to pay the difference. If there has been an underspend and the year-end service charge account is lower than the estimated budget, the difference will be carried forward to the next accounting period as a credit.

There are a number of reasons why the actual amount spent each year may differ from the estimated budget and these could include:

• Unexpected, emergency repairs required.
• Additional costs incurred to remove non-domestic waste left around the development (fly-tipping).
• Removal of cigarette ends from the development (not covered under the usual maintenance contracts).
• Increased buildings insurance premiums as a result of an RCA (re-instatement cost assessment) carried out to work out the rebuild costs for the building.
• Insurance excess in the case of a claim on the buildings insurance.

Your service or estate charge pays for the services provided by your freeholder or RMC (or their managing agent) that benefit your development, for example outside lighting, maintenance of any common areas, maintenance of any roads not adopted by the local council. These services are laid out in your lease (for apartment owners) or title (for freehold house owners).

Your council tax pays for the services provided by the council to the wider community, including refuse collections, social services, schools and the police.

It's not always that clear as to what we can and can't 'fix', so here's a quick overview as guidance.

What we can fix

It is the managing agent's responsibility to maintain and repair the building and manage the common parts of the building or the external environment. In short, the parts of the building or grounds not specifically granted to the leaseholder in the lease but to which there are rights of access, for example, the entrance hall and staircases, corridors, and lifts. So in short, there are day-to-day duties that are carried out which mean we can 'fix':

• Most lease queries
• Invoice queries
• Pursuing arrears
• Supplier and contractor project management
• Resident communications - updates, queries, complaints & advice
• Company Directors queries
• Enforcement of ‘House Rules’ such as fire and safety hazards or excessive noise
• Landscaping and green space maintenance 

What we can’t fix

Whilst we cannot deal with or 'fix' situations that are outside of our remit, or matters dealt with by other authoritative bodies, we can advise and inform residents of who would be able to deal with any enforcement. Some examples are:

• Upkeep or repair of unadopted roads and pathways (these are matters for the local authorities)
• Street lighting in unadopted areas (these are matters for the local authorities)
• Upkeep of council-run areas such as bus shelters (these are matters for the local authorities)
• Repair or upkeep of internal appliances such as boilers and white goods
• Disrepair or illegal use of the home or apartment
• Anti-social behaviour on the site
• Neighbourly disputes (these are police matters)
• Onsite intruders (these are police matters)
• Drug use (these are police matters)
• Littering including wrongful use of litter bins (such as dog waste)
• Dog fouling in estate grounds
• Graffiti or wilful damage to property

Should you have a query, please contact you property manager in the first instance who will be able to advise you.

How we look after the communal areas of your property

It is our responsibility, along with the residents to ensure the safety and cleanliness of the communal areas. They are not an extension to your property so no personal items must be stored within these areas.

Doors: Communal fire doors must be kept closed as part of the block fire strategy, they should not be wedged open. Read more about Fire Precautions HERE.

Landscape: The communal gardens are maintained at the agreed frequency and in line with the specification. We welcome any ideas residents may have to enhance the areas.

Lifts: Lifts will be subject to a maintenance contract and regularly inspected. In the event you become trapped in a lift, please remain calm and use the emergency call button. Engineers will usually be with you inside 1 hour.

Lighting: As your property management company, we only deal with matters relating to the communal areas. If there are light bulbs that are 'out' in the communal hallway, please contact us as soon as this is spotted. The Property Management team undertakes regular visits to the property and will instruct repairs for faults found on the site visit. However, for a prompt response to any issues, we welcome your observations.

Parking: Parking is often at a premium, and can be subject to a control solution, such as ticketing. Please ensure you and your visitors are aware of any restrictions.

Redecoration: Long-term and cyclical works such as internal/external redecoration will be a strict requirement of the legal documentation for your property. Where permitted, a reserve fund will be collected to build up a pot of money to contribute towards the works when required.

Cleaning: Cleaning of all communal areas is carried out at the agreed frequency and sign-in sheets are available at block entrances confirming attendance dates.

Leaks: Please contact us urgently if you see a leak in any of the communal areas either by telephone on 01722 328 685 or send an email to welcome@remus-mgmt.co.uk

Contractors: Remus maintains a database of approved contractors that we instruct to carry out a variety of work on behalf of our clients.

We continually review this database to ensure all contractors have suitable health & safety arrangements in order to meet our own and our client's obligations under relevant legislation. The vetting process will include:

• Obtaining references to ensure they are competent to do the work safely and to a high standard.
• Ensuring contractors hold up-to-date certificates of compliance and/or registration documents with statutory bodies.
• Ensuring all contractors hold appropriate insurance.
• Obtaining and approving health and safety policy documentation and information.
• Ensuring contractors have adequate resources.
• Ensuring that contractors provide good value for money and quality of service.

All Remus approved contractors are vetted internally or will need to demonstrate pre-existing membership of a scheme approved by the Government-backed Safety Schemes in Procurement (SSIP).

A few things we frequently get asked about... 

Leaks from the flat above: Nothing is more daunting than seeing water coming into your property. The first things you should do are to notify the flat directly above you and call us. We will be able to assist where necessary and contact the flat upstairs if you are unable to. It is also advisable to put the building insurers on notice of any potential claim. If you do not have the insurer’s details, we will have a record of these.

Refuse: Each property owner is responsible for the removal of all household refuse and debris of whatever size and nature from their own property. Domestic refuse should be bagged up and placed in the communal bins that have been provided in the bin shed. Please do not leave refuse sacks on the floor in the bin store or surrounding area as this creates an environmental risk and encourages pests. If you do not have the details to access the bin store, please contact us and we will be able to assist you. If you have bulk refuse such as furniture or white goods, please view your local council’s website for the options available to you.

Window cleaning: Most leases will require the Management Company or Freeholders to periodically clean the communal windows of the property. The cleaning of individual property windows normally falls under the residents' responsibility. If you are unsure, please contact us and we will be happy to clarify.

Subletting: There are rules and guidelines for subletting your property. Find out everything you need to know HERE.