Your lease requires you to pay your share of Hastoe’s costs for providing the services on the estate, including maintaining and repairing the structure of the building, the garage and shed (if any) and the common parts of the block, including halls, corridors, entrance doors to the building and external communal areas. You have a legal duty to pay the service charge when due, and if you fail to do so, it is a breach of your lease agreement.
On estates where there is more than one block the general service charge is divided into two parts:
- Estate charge
- Block charge
On estates where there is only one block, the percentage is the same for estate and block services. You may or may not have to pay all of these charges - it will depend on where you live and what services we provide. We issue a service charge statement each year, and this details the services provided and the charges.
The estate charge covers all charges for the common parts of the estate. The charge is divided equally between all homes on the estate, whether rented or owned.
Estate charges cover items like:
- Maintenance, repair and care of communal areas and facilities
- Maintenance and repair of roads and footpaths for which Hastoe has responsibility
- Estate staff
- Gardening, including tools and equipment, tree work, skip hire and pest control
- Light and power to communal areas
- Repairs and maintenance - both minor and major – on the estate.
The block charge covers items which are specific to the block in which the flat is situated. The percentage you will pay is set out in your lease and will usually be based on the number of homes in the block. For example, if there are 8 flats of the same size in the block, each leaseholder will be required to pay 12.5% of the costs.
Items included in the block charge include:
- Repair and maintenance of the structure, exterior and common parts of the block
- Window cleaning
- Light and power
- Cleaning and caretaking.
- Ground rent: This is charged alongside your service charges and if you pay by direct debit we will take your ground rent payments automatically. However, you will always receive a ground rent demand either quarterly or annually in line with legislation. If you receive one this does not automatically mean that you are in ground rent arrears. If you wish to check on receiving this please contact us.
- Management, audit and an accountancy charge: This fee is to cover the costs of providing the management service to you.
- Reserve Fund: Your lease allows for a fund to build to help cover major repairs such as cyclical decoration to the exterior and interior of the common areas of the block, replacement of roofs, window frames and lifts, together with other periodic repairs with a significant cost. This is called a reserve fund (also sometimes called a sinking fund). We make a charge each year for the programmed work to spread the cost over its life. We hold these funds in a separate account, and they are only used for major repair costs. We will tell you each year how much we have collected, and what, if anything, has been paid for from the fund. From time to time we will review the level of your contributions to ensure that there will always be enough funds available in your account to meet your share of the cost when the work is carried out.
An administration charge is an amount which is payable when a leaseholder requests a particular service or when we have to carry out special work because a lease has been breached. This is in addition to the management charge and is applicable:
- For or in connection with the grant of approval under your lease, or an application for such approval
- For or in connection with the provision of information or documents
- In respect of your failure to make any payment due under your lease
- In connection with a breach of covenant or condition of your lease.
Accounting for the service charge
We estimate in advance the charges we think we need to make in each financial year (1 April to 31 March) in order to cover expenditure. These figures are based on what we have spent in the past and projected known expenditure. They represent our best estimate of the costs of services and repairs. We aim to notify you of these projected charges early in March, before the new debit comes into effect from 1 April. This is to give you sufficient notice to make changes to your payments.
After the end of the financial year (31 March), we prepare the audited accounts. We will send you a summary of these before 30 September in the same year. The audited accounts set out the actual costs of the services and repairs carried out during the preceding financial year. The actual costs may be different from the estimated costs. For example, there may have been additional essential work, which we hadn’t been able to identify before the beginning of the year, or we may have spent less than anticipated.
The audit adjustment will show on your service charge account as a credit or debit. If it shows a debit, you must pay this within 21 days of receipt of the accounts. We will arrange to refund any credit amounts on request.
We will send you a summary of your rights and obligations when we send out the projected service charge statements, and again with the actual audited statements.
Access to service charge information
You have the right to see the accounts, receipts and other documents that help us put together the service charge summary. We make this information available for inspection at our office at Hampton Wick, Surrey. If you wish to see the accounts, you must write to us within six months of receiving the summary of costs. We will provide access facilities within one month and keep them available for two months. We do not make a charge for you to inspect the documents, but will make a reasonable charge if you want us to provide you with any photocopies. We may treat our costs for making facilities available as a management cost, and will consider this when reviewing the management, audit and accountancy fee, which all owners have to pay.
Paying your service charge
When you buy your property, we will write to you setting out you how much you need to pay. Service charges are to be paid quarterly in advance, and we debit your account on the first day of April, July, October and January. We expect leaseholders to pay their service charge by direct debit. Direct debit is a safe, easy and reliable way of making regular payments.
If you can’t pay by direct debit, there are other ways to pay.
What to do if you can’t pay the service charge
If you fail to pay your service charge when it is due Hastoe can apply to the county court or the First Tier Tribunal to obtain a judgement or determination of the debt. We can then apply to the courts to have the lease forfeited. This could result in you losing your home and any investment you have in it.
It is very important that you contact us straightaway if you are experiencing financial difficulties, so that we can jointly agree the best way forward. In cases of proven financial hardship we may be able to make an arrangement for payment with you. The Leasehold team will be able to advise on other actions you can take.