Paying for day-to-day maintenance
As a homeowner, your service charge will vary depending on where you live and the terms of your lease agreement. It’s separate to any ground rent you pay.
It should cover the day-to-day costs of providing all the services needed to maintain your estate and block.
Service charges pay for things like:
- Cleaning and maintaining the communal areas.
- Lighting, water and heating in communal areas (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 charge frequently asked questions
How are service charges calculated?
Service charges are based on the type of property you live in. It also depends on which services are provided to the building or estate where you live and the lease which you agreed when you moved into the property.
We estimate the individual parts of the charge for the coming year based on what was charged in the previous year. We also take into account whether any particular areas are likely to need more or less money spending on them.
If, at the end of the year there's a difference between the amount we charged you and the amount we actually spent on your property, we’ll either credit your account with the surplus, or you’ll be asked to pay for any deficit. We’ll send you a written statement showing the service charge income and expenditure no later than 30 September each year.
What happens if I don’t pay my service charge?
If, after 30 days you haven't paid your invoice or set up a direct debit or agreed a payment plan with us, we’ll contact you to discuss why. If you don’t then pay us, we’ll follow the process laid out in your lease. If necessary, we’ll pass your account to external solicitors and may even contact your mortgage provider.
Please note, that if you don't work with us to pay the outstanding money, we may be forced to take further action which could result in your losing your home.
How can I challenge my service charge if I disagree?
If you spot an issue with your bill, please contact us. With every bill we send, we provide a document called 'Your Rights and Responsibility'. This document sets out additional options for challenging your bill.
Will I receive notice if larger scale works are required?
We make sure you get plenty of notice of upcoming bills. If we think any single repair on the estate will cost you £250 or more, we’ll consult you before it’s carried out. If any new service contract will cost you £100 a year or more, we’ll consult and let you know. This is the process known as Section 20 of the Landlord and Tenant Act 1985.
If, when we issue the final bill, you’re unable to pay it in full, we’ll discuss payment options with you.
Who do I speak to if my home is managed by an external managing agent (EMA)?
If you bought a share in a home in a development that’s managed by an external managing agent (EMA), they will set the service charge budget. We’ll analyse this budget and challenge it if necessary.
Unlike Peabody, the EMA will set a management fee that covers their costs and makes them a profit. We’ll 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. If you have any concerns about your service charge, you can contact us, and we’ll put you in touch with the relevant people.
What’s the difference between the actual service charge and an estimated charge?
There are a variety of reasons for the actual service charge being different to the estimated charge. These include things like a change in the number of caretaking hours needed to look after the property or in the number of repairs required. It may also be because the need for a service is only realised after the service charge estimates have been finalised.
Peabody will always aim to estimate your future charges as accurately as possible. If you’re concerned about variances in your accounts, or would simply like information, please contact us or email at CCLhomeownership@peabody.org.uk
Service charge - glossary of terms
A special collection of large items such as furniture, which the council will not remove as part of the normal weekly collections. Most councils will collect things like old sofas, fridges or washing machines for a fee.
We strongly encourage residents to arrange for their own removals of bulky items, to reduce service charge expenditure on this item.
Gardens and grounds maintenance
The cost of gardening and external sweeping and litter picking. Gardening is normally more regular during spring and summer time, as plants and grass grow more quickly so require more frequent tending.
This is the cost for cleaning of the communal parts of a block and or estate by Peabody caretakers. The charge includes the costs of employing the caretaker and any equipment needed to do their job.
General building works
The cost of general repairs to the communal areas of the development (e.g. repairing a broken bin store door).
The cost for servicing, maintaining and repairing the lift.
The cost of maintaining the intercom system. If the intercom handset in your flat is faulty, we will fix this (or on some developments by the managing agents) as a communal repair.
Emergency light testing
When there is a power cut, emergency lighting will automatically switch on, so that there is still lighting inside internal communal hallways and stairwells.
Many larger developments are fitted with lightning protection systems, which ground any lightning strike into the ground below the development.
Fire equipment and risers
This is for the servicing and maintenance of all fire equipment and dry risers in the communal areas.
This charge relates to servicing and testing of any portable appliances that service the communal area of your block, as well as required electrical circuitry testing.
The cost of supplying electricity to the communal areas, e.g. to the lift, communal lighting and door entry system.
Is a cost for undertaking Legionella testing to the communal water supply to all blocks and properties.
This covers the financial and administrative running costs of providing services to leaseholders.
External audit fee
The cost of an independent audit of the service charge accounts at the end of each financial year.
Reserve fund/sinking fund
Typically, your lease allows Peabody as your landlord to demand a contribution towards the reserve fund/sinking fund via the service charge. The purpose of the sinking fund is to build up a fund to pay for future larger scale works, such as repainting/redecorating the whole building or replacing window frames. The fund also ensures that homeowners do not face such a large one-off bill when any such work becomes necessary.
As a responsible landlord, we have a duty to ensure that we have appropriately set aside money to cover the cost of future major works and large individual items of expenditure. We are also governed under Tenant and Landlord law for the appropriate usage of sinking funds and as such, the sinking fund cannot be utilised for day to day reactive repairs for example.
These are secure wires installed on flat roofs, which any contractor working on the roof can secure themselves to using a safety harness. Man safe systems require an annual safety check.