In our experience, every development is different which is why we never take a ‘one size fits all approach’ to setting and managing service charges. Instead, we build bespoke packages to suit the residential blocks that we manage. We understand no one likes to pay more than they have to, so we work hard to deliver the best value for your service charge whilst making sure that your development is maintained to the highest possible standards.
What are service charges?
Service charges are levied by property management companies to recover the costs they incur in providing services to a building and are set out in the leaseholder agreement. Most leaseholders living in flats have to pay them because it is the only manageable way to share the costs of looking after the building. The charge normally covers the cost of general maintenance and repairs, communal amenities and cleaning of common areas, for example. A pot of money, known as a sinking fund (see below), is also held on account to cover unexpected eventualities and major maintenance and repair projects.
Cost of service charges
The details of what can and cannot be charged, and also the proportion of the charge to be paid by the individual leaseholder, should be set out in the lease. A service charge can be increased or decreased from one year to the next, but the charge must remain reasonable. Your lease should set out:
- What services you have to pay for
- When you have to pay them
- How the freeholder collects the service charges
- How the service charge is calculated
- How the service charge is divided between the leaseholders
- What is the reserve/sinking fund
At Cable Rock, we provide each residential block that we service, in East and West Sussex, with a dedicated property manager. This means that you have one point of contact, and with someone who is very familiar with your development. This also allows us to accurately manage a leaseholder’s individual account and their overall service charge.
Each year we send leaseholders both an actual and forecast stating the total amount of expenditure for the previous year and the estimated costs for the year ahead. The forecast is calculated based on known expenditure from previous years, existing service contracts and planned works for the coming year that have been agreed by the directors of your development.
What is a sinking/reserve fund?
Many leases provide for the landlord to collect charges in advance to create a reserve fund. The aim is to build a sum of money to cover the cost of irregular and expensive works, this protects leaseholders from a sudden large bill. If you sell your home before the reserve fund has been used for repairs you are unlikely to receive a refund.
If there are any works to be carried out which will cost more than £250.00 per individual property we will let all leaseholders know in advance what works is planned, provide two or more estimates for the work and explain our choices for choosing a contractor. This is in accordance with the statutory process known as “Section 20” consultation. This helps ensure we provide complete transparency to the leaseholders in the properties we manage whilst giving residents the opportunity to recommend a contractor.
The Cable Rock block management service is about meeting your needs and expectations. From day to day maintenance work, such as changing light bulbs through to large scale property renovations and compliance with the latest building legislations, we are here to support you. Explore further details about our property services and the range of flexible pricing options we offer. If you prefer to speak to us directly, please don’t hesitate to reach out to us using our contact form or by calling 01323 345045.
