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Service charges for homeowners
information about service charges for Peabody and former Family Mosaic, Gallions and CBHA residents.
As well as your mortgage repayments, there are also other charges that you’ll need to pay, such as ground rent, rent and service charges.
Rent and service charges paid by our residents are crucial in enabling us to maintain high standards. It is therefore very important, both for you and for us, that you pay your charges and that we collect all the charges due. If you need more information, please contact us.
- Net rent
Rent, along with your service charge, is payable by shared owners who part rent and part buy their home. This amount will vary depending on the percentage that they own and will increase annually based on the IPR in accordance with your lease
- Ground rent
Ground rent is a rent payable to the landlord. It is a specific requirement of your lease agreement and must be paid on the due date. This increases in accordance with the terms of your lease.
- Service charges
Service charges are payable by the leaseholder on a yearly basis for services rendered. The terms of your service charge will be outlined in your lease, setting out what you will receive and what you’ll have to pay.We’re responsible for maintaining our buildings and looking after the shared areas in and around our blocks. Residents (including leaseholders and freeholders) contribute to the cost of this through the service charge payment.
These services depend on where you live. They may include - but are not limited to - the following:
- cleaning and maintaining the communal areas
- communal areas: lighting, water and heating where applicable
- caretaking and security
- repairs and improvements
- lift maintenance
- maintaining door and gate entry systems
- grounds maintenance
- audit fees
- bin hires
- estate management fees
- communal building insurance
- reserve fund towards the cost of cyclical repairs or major works
Service charges are separate from any ground rent you pay. The amount you are eligible to pay is set out in your lease and is based on the size of your property or the percentage specified in our lease for services provided to you and your estate.
We do not make a profit on service charges and do all we can to ensure that the charges are reasonable.
How are service charges calculated?
Leaseholders are charged a variable service charge, as detailed in their lease agreement. This means that we estimate their service charge cost first, and charge them this amount at the beginning of the financial year. Then, at the end of the financial year, we work out the actual cost and compare the difference. The outcome of this comparison will result in either a credit to your account, or you will be asked to pay for any deficits
As you’ll appreciate, there are many reasons why the initial estimated service charge might change during the year. We try to be as precise as possible, but we have to estimate for some costs like utilities.
We will send you a written statement showing the service charge income and expenditure no later than 30 September each year.
- Paying your service charge: find out about the various ways to pay.
If you do not pay you are in breach of your lease and could lose your home.
What happens if I don’t pay my service charge?
If, after 30 days, your invoice remains unpaid and you have not set up a direct debit or agreed payment plan with us, we will contact you to discuss the reasons for your non-payment. If you don’t then pay us, we will pursue the debt according to the terms of your lease. If necessary, we will pass your account to external solicitors and/or contact your mortgage provider.
Please note that further possession proceedings may be taken against you which could result in your losing your home.
Challenging your service charge
If you spot an issue with your bill, please contact us. With every demand, we provide a document called 'Your Rights and Responsibility'. This document sets out additional options for challenging your bill.
Section 20 Consultation
We ensure that you get plenty of notice of likely bills. If we plan to spend over £250 on a single repair on the estate we will consult to you before it is carried out. If any new service contract will cost you £100 a year or more, we will consult and let you know. This is the process known as Section 20 of the Landlord and Tenant Act 1985 (as amended). When we issue the final bill, you will be offered with payment options depending on the size of the bill, if you can demonstrate that you are unable to pay the bill in full.
External managing agents
You might have bought a share in a home that is in a development that is managed by an external managing agent (EMA). In this case, the service charge budget will be set by the EMA. We will analyse this budget carefully and challenge it if necessary. The charges levied can vary substantially between development, and may be more than we would levy if we were the managing agent.
Unlike Peabody, the EMA will set a management fee that covers their costs and makes them a profit. We will also include a reduced fee on top of the EMA’s bill, to cover our costs, as well as an audit fee to cover the costs of producing annual accounts.
The EMA manages and controls all the communal repairs and maintenance of the development, and their services, like cleaning, may vary from those provided by us.