What is Service charge?
Service charge are charges for (communual) services you receive. The cost of maintaining shared spaces is divided amongst the properties in a building or on an estate.
What isn't considered a Service charge?
Some costs that might be confused with service charges, but are not included:
- Ground rent is paid by leaseholders to the freeholder or landlord for the land on which the building stands.
- Repairs or maintenance inside someone’s home.
- Personal utility bills which are individual to the resident, like electricity, gas, water, or broadband.
- Most of our properties are separate from communal utilities.
Services included in your Service charge
- Cleaning
- Insurance
- Maintenance
- Property Management
- Repairs
- Utilities
Full list of service charges that could appear on your statement
Fixed vs Variable service charges
Fixed service charges 
Fixed service charges are predetermined amounts that are agreed in advance and don't change throughout the year.
Variable service charges
Variable service charges fluctuate based on actual costs incurred during the year. The amount paid may vary year by year depending on the expenses.
Understanding your service charge
You should have received some letters from us detailing your estimated annual service charge, your
actual service charge. Some of you may have also received a Section 20b booklet too. Understand what
each section of these letters/booklets refers to here.
How is my Service Charge estimated?
The amount of service charge you' ll be asked to pay as a homeowner will be based on an estimate calculated
by your property management officer (PMO) and sent to you in a service charge schedule.
This will take into account several variable factors, such as how much money was spent on the building in
previous years, whether we expect certain costs to go up or down, and the anticipated costs of major works.
Your PMO will use all the information available to them to produce an estimate that is as close to the final actual costs as possible.
Your Share
Your statement includes percentage figures showing your share of each cost based on your lease. This
may be calculated by the space you occupy or a 'fair proportion' of shared services you use, regardless of
property ownership shares.
You can find how this is determined in your lease under 'Specified Proportion' in the Particulars section.
Factors like elevator access or parking rights may increase your percentage.
Tenure
What is a lease? 
A residential lease is a tenancy agreement for a term of 21 years or more, which gives the leaseholder the exclusive right to live in a property for a set term. A lease is a specific type of contract called a deed.
It sets out the terms of the contract between the landlord and the leaseholder. It is very
important that you have read and understood your lease, as once it is signed it cannot usually be
changed and you are bound by its conditions whilst you own the lease.
What is a leaseholder? 
A leaseholder is a tenant who has a particular type of tenancy agreement, called a lease. This means they have the right to live in the property for the period of the lease. Under the lease, you will have the exclusive right to live in your home, as long as you meet the terms and conditions set out in the lease.
This provides the resident more security than renting privately and an exchangeable asset which might accrue value. However, it is important to be aware that as the remaining term of the lease decreases this can affect its value and might require a lease extension.
Shared Ownership? 
A shared owner purchases a leasehold house or flat, buying a percentage of the full equity and paying rent on the portion that they do not own. The responsibility for maintaining the home or paying the service charge is not shared. The shared owner must pay the full cost of maintaining their property and pay the full service charge like any other leaseholder.
What is a Freeholder? 
Unlike a leaseholder, the freeholder of a home will own their property outright, so they are
usually responsible for the repair and maintenance of the property themselves. Houses can be freehold or leasehold, but flats are generally leasehold.
A leaseholder will have a freeholder as their landlord who would be responsible for the repair and maintenance of the exterior and common parts of the building. If your block also has an intermediate lease this could mean that your landlord may be different to your freeholder.
Where can I find a copy of my lease?
Your solicitor should have given you a copy of your lease when you bought your home and
advised you of its contents as well as your commitments. If you have a mortgage, you can get
a copy of your lease from your mortgage lender. Alternatively, the Land Registry will hold a
copy which you can get from www.landregistry.gov. uk. You will need to pay a fee for this.
