Service charges
Why do I have to pay service charges?
When you buy your home, you become responsible for paying towards the costs of managing and maintaining the building your home is in. This is called the service charge.
All the leaseholders in your building will have to pay a service charge. Your service charge is the money you pay towards the cost of managing, maintaining, repairing, insuring and providing services to your home and the common areas.
How is the service charge worked out?
Your service charges are made up mainly of the following costs:
- Ground rent
- Repairing and maintaining your block
- Making improvements to the block
- Maintaining shared areas
- Communal lighting
- Communal TV aerial equipment
- Door-entry systems
- Building insurance
- Management costs
The costs of the services to your building and your share of these costs will be listed on your yearly invoice (a statement of what you should pay). The service charge year runs from 1 April to 31 March of the following year and you are billed for the services you received in the previous year.
How do I pay my service charges?
You can pay:
- By Standing Order
- By debit/credit card over the telephone
- Online
- At PayPoint outlets
- In cash or debit card at your local Community Hub and Library
Paying for major work to your block
You must pay your share of the costs of major work to your block. We understand that major work like this can be very expensive, but it is essential that we do the work to keep the structure and exterior of your home in good order.
You do not normally have to pay your share of the cost of major work until it has been completed and certified as being of an acceptable standard. You will receive a separate invoice for any major work that has been completed in the last year.
As major work can be expensive, you need to think carefully about how you will pay for your share of the costs when your statement arrives. You could take out a loan, or it might be better to pay the bill in the current year by monthly installments. Contact the leasehold team for more details.
What happens if I refuse or fail to pay my service charges?
If you have any difficulty paying your service charge or major work bill, don’t ignore it. It will not go away and you could end up losing your home if you don’t pay it. Please get in touch with us straight away and we will be happy to let you pay by monthly instalments. This will allow you to spread the cost of your payments over 10 months.
How do I know my payments are up to date?
Every 12 months we will send you a statement of your leasehold account. It will show your bill for the previous year and any payments received. When you receive your statement please check it carefully and if you have a query please contact us straight away. You can also request an up to date statement at any time, by contacting the leasehold team.
Service charge disputes
If you do not agree with part or all of your service charges, please contact us on (0191) 643 7539 and tell us what you think is wrong. We will investigate and if we agree with you, we will amend your charges. Often, disputes like this are easily resolved without having to go through a formal process, such as applying to the Leasehold Valuation Tribunal (LVT).
Leasehold Valuation Tribunal
The Leasehold Valuation Tribunal (LVT) is the formal name given to the panel that makes decisions on disputes relating to leasehold property. The LVT is a panel of three members: a Solicitor, a Valuer and a non-specialist lay person. They are all independent and impartial.
The LVT is a type of legal hearing, but less formal than going to court. It can help with most disputes between leaseholders and freeholders. Disputes might include:
- Building insurance
- How much you have to pay in service charges
- The quality of services provided
Following an application to the LVT, the Tribunal will look at the matter of the leasehold dispute for the property.
How much will the tribunal cost?
There is an application fee, which varies in price.
The LVT cannot award costs, so if you use professional people or services such as a solicitor or a surveyor, you would have to pay these costs.
Further information is available at:
Leasehold Advisory Service
www.lease-advice.org.uk
020 7832 2500
Housing Ombudsman
www.justice.gov.uk
0845 600 31 78