ServicechargeS
Planahead to avoid SurPriSe chargeS
Someleaseholders maypay ahigher servicecharge than others in their building
Use a properly costed maintenanceschedule to avoid being hit by unexpectedrepairs and
one-off bills, says StEVE BREwER
Service charge arrangements for your flat are determined by your lease, as CHRIStopHER LASt explains
company. Theobligation to payservice charges should be set outinthe lease; if not there will be no requirement to pay. Theservice chargecovenants in aleasemay
*
providefor leaseholders to payanequal share of thetotal cost of theservices provided forthe building or estate, or instead set out a formula forcalculatingthe individual leaseholder’s liability such as floor space or rateable value. Thismeans that someleaseholdersmaypay a higher servicechargethanothersinthe same building. Servicechargesmust be ‘reasonably
incurred’and be of areasonablestandard. Thereare ways to hold your freeholder or manager to account. You can request from thefreeholderawritten summaryofcosts incurred during thelastaccounting period. Theymust send it to theleaseholderwithin sixmonths of the end of the last accounting period or within onemonth of therequest - whicheverislater.Ifyou wish, youcan then sendawritten request to thefreeholderasking to inspectthe accounts andreceiptswithin sixmonths of receiving the summary. Failuretocomplywitheitherrequest
is potentially a criminal offence and the freeholder risksbeing prosecuted andfinedup
Flat Living Autumn2011
A SERVICE CHARGE is anamount ofmoney paid by leaseholders forservices provided by their freeholder ormanagement
to £2,500. Local authorities are exempt from these provisions but can bring a prosecution. If youbelieve your servicecharges arenot
reasonable and you wish to challenge the amount youare beingcharged,the Leasehold ValuationTribunal(LVT) candetermine the amount of anyservice chargedemandyou are liable to pay. However, do regard applications to theLVT as alastresortand first consider negotiating with your freeholder or inviting themintomediation on a dispute. Should yourequire anyadviceonservice
charges, the Leasehold Advisory Service (LEASE)
isabletoassist.Arange of advice guides andFAQsare availabletodownloadfrom thewebsite
atwww.lease-advice.org.uk●
CHRIStopHERLASt is a legal adviser atLEASE
ServicechargeS are defined by Section 18 of the Landlord and Tenant act 1985 as:
“…anamountpayablebyatenantofa dwellingaspart of or inadditionto the rent—
(a)whichispayable,directly or indirectly, forservices, repairs,maintenance, improvementsorinsuranceorthe freeholder’scosts ofmanagement,and
(b)thewholeorpartofwhichvariesormay vary accordingto the relevant costs.”
StEVE BREwER,abuildingsurveyor withWattsGroupPLChas just finished doing a condition survey on 790apartmentsinLondon Docklands. Thepropertymanagerswerekeento determinethe conditionofthe building fabric andservicesand areputtinga ‘nosurprises’maintenanceschedule in place to avoid residents being hit by unexpected hikes in their service charge.
“Maintenanceschedulesare a vitaltoolnot only forkeeping your blockingoodrepairand spreading thebills but also forpeace of mind thatRMCs aremeeting their health &safety obligations”, says Steve. “If theroofofyourblock is in poor repair and starts to leak, you and your fellowleaseholders will havemore to deal with than simplyreplacing
theslatesortiles.Residentsmay find themselves withmassive billstocover thecostofrepairing water damage to internal finishes and contents and facing a hike in insurancepremiums.Evenmore serious is the prospect of electrical faultsorconcrete failure causing balconiestocrack or collapse. Such problemscan lead to serious accidentsorevenlossoflifefor whichRMCdirectors couldfind themselves personallyliable.” See page23 of thisissue formoreonmaintenance schedulesand howtoput one in placefor your block.
What starts off as abit of aleak couldend up
beingexpensive 53
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