Apportionment

How estate and block costs are split between residents. The split is determined by the lease or transfer agreement.

Common methods include:

  • Equal split – every home pays the same amount.
  • Percentage split – each home pays a pre agreed percentage (often set out in the lease).
  • Floor area split – charges are based on the size of each property, with larger homes paying more.

Actuals

The end of year accounts showing the costs actually spent on providing services over the year. These will be broken by individual service, so you can what was spent for each element (e.g. cleaning, gardening etc. ) compared to the original estimate.

Balancing Charge / Credit

The difference between the estimated charges you paid (monthly or weekly for the period) and the actual costs in the end of year accounts:

  • Balancing Charge: If the final costs in the end of year accounts are higher than the estimated costs, you will be asked to pay for the difference
  • Credit: If the final costs in the end of year accounts are lower than the estimated costs, we will credit the difference to your account.

Block

A block of flats or a group of houses in which can benefit from the same services.

Consultation

A process where the landlord must ask residents (usually leaseholders) for their views before certain decisions are made, especially for large or long-term works. This is often done under “Section 20” rules.

Estimates

The predicted cost of services for the upcoming year. These set your service charge at the start of the year.

Estate

An extensive area of land which has been built on, consisting of a large number of houses and/or blocks of apartments, and shared communal areas.

Financial Period

The 12 month period used to record and report service charge spending. This may not always be the same as the calendar year.

Freeholder

The person or organisation that owns the land and building. Leaseholders usually pay the freeholder ground rent or service charges.

Head Lease

A lease held by someone who then grants other leases underneath it. Think of it as a “main lease” from which sub-leases are created.

Landlord

The landlord is a person or organisation that owns the land, building/block or property. In many cases, the Landlord is Peabody, but not always.

Lease

A legal contract giving someone the right to live in a property for a set number of years. It sets out rules, responsibilities, and payments such as service charges.

Leaseholder

A person who owns the right to live in a property under a lease. The building itself is still owned by the freeholder.

Major Works

Large or long-lasting repairs or improvements to a building—for example, replacing a roof, updating communal electrics, or redecorating shared areas. These works often need consultation.

Reconciliation

The process of reviewing the actual costs incurred during the financial year and comparing it to the estimated service charge set for that year, and to ensure the accounts are accurate and charges are recoverable as stated in the lease or tenancy agreement.

Service Charge

A payment made by residents to cover the cost of shared services—like communal cleaning, gardening, lighting, repairs, and managing the building.

Shared Ownership

A scheme where you buy a share of a home and pay rent on the rest. Over time, you may be able to buy more shares.

Staircasing

Buying additional shares in your shared ownership home. The more shares you buy, the less rent you pay.

Tenant

A Tenant is a person who either has the right to live in or possess a property, in which rent is paid for this right. There are several types of tenants.

  • General needs Tenant would typically have an Assured Tenancy, Assured Shorthold Tenancy or Fixed-Term Tenancy and would pay rent directly to the Landlord for their right to occupy the property.
  • Shared Owner Tenant would own a share of the property, in which rent will be paid directly to the Landlord for the apportionment they do not own.
  • Leasehold Tenant would own their property for a limited time as stated in their leasehold agreement, but not the land in which their property is on. Rent will typically be paid to the Landlord in the form of Ground Rent.
  • Freehold Tenant would own the property and the land the property sits on. Freehold Tenants will not pay any rent but may contribute to service charge for communal areas and services that benefit the entire estate.