Service charges pay for the cost of looking after a shared space beyond your own home. The service you receive will depend on where you live and what facilities are provided in your block or neighbourhood.
We set a budget for your scheme each financial year, which runs from 1 April to 31 March. As we don’t know in advance the exact amount it will cost us to provide services and repairs, Great Places estimates how the cost of services by looking at previous 12 months. We consider any changes that we know about for the next 12 months when calculating this.
Your service charge estimate is sent to you in February each year and the amount you pay during the year is based upon this estimate.
Service Charges are variable, meaning they will go up and down each year depending on the amount spent on your block or estate. Your estimate may increase some years or decrease in others.
At the end of the financial year, we carry out a reconciliation of the amount residents have paid during the year and the cost of providing services and repairs. We will then send you a summary of the accounts within 6 months of the year end.
Where we’ve spent less on providing the services than we’ve charged you, there will be a surplus on your Service Charge Statement. This is also known as an underspend.
Where we’ve spent more on providing the services than we’ve charged you, there will be a deficit on your Service Charge Statement. This is also known as an overspend.
The surplus or deficit will be carried forward and applied to your service charges the following year.
The following are headings you will see on your service charge estimate and service charge statement. It is not a comprehensive list but should provide some insight into the services we arrange on your behalf.
This is the cost of maintaining any communal landscaped areas rather than individual gardens. It can vary depending on how labour intensive your garden area is. For example, grassed areas would require cutting at lease once a fortnightly in the growing season whereas a shrub bed would require less frequent visits. It covers the costs of general gardening, one off gardening/pruning, gritting, litter picking etc.
Cleaning of communal parts such as corridors, entrance halls, staircases, communal lounges etc. It also covers the cost of cleaning bin stores and refuse collection which is not part of the service provided by the Local Authority.
Cleaning of communal windows and sometimes the windows of individual apartments where they cannot be safely cleaned by residents.
This can include fly tipping, additional litter picking and carpet cleaning.
This is the cost of providing pest control in the communal area or in individual homes if there is a risk if the pests will infest the communal area.
This could include any cleaner, caretaker, warden salaries. It also covers office costs such as office telephone, cleaning and caretaker equipment.
Hire, servicing and repairs to washing machines and/or tumble driers in communal areas.
The cost of maintaining, monitoring and repairing equipment and obtaining CCTV images when required.
For the supply of electricity for communal areas, which might include things like lighting both internal and external, lifts, alarm systems, CCTV etc.
Sometimes there is a communal water supply for the cleaner or for watering the garden areas.
Any repairs we undertake to the internal or external communal areas.
Regular maintenance inspections, arranging health and safety upgrades and repairs. If your lift has an emergency telephone system this will also be covered here.
Repairs and maintenance.
Includes annual maintenance checks to smoke detectors, fire alarms systems and emergency lighting.
This covers any additional requirements to comply with health and safety requirements such as preparing fire risk assessments, arranging legionella tests, check water systems etc.
* The testing of communal electricity appliances or appliances used by staff at the scheme including laundry facilities, vacuum cleaner and garden equipment.
Large items such as door entry systems, lifts or TV aerial need to be replaced from time to time. To plan for this, and to avoid charging you the costs all at once, we collect regular amounts as part of the service charge which are added to a sinking fund for your particular scheme.
This cost relates to our fee for managing the services provided on your scheme. It is normally calculated at 15% of the total Service Charge excluding sinking funds. Sinking fund management charge is calculated at 10% of total the total yearly sinking fund collected. For schemes which are managed by a 3rd party agent a 5% management fee is added to cover Great Places administrative costs.
There are some Service Charges which you can claim with your rent for Housing Benefit. These are known as Eligible Service Charges.
Service Charges you can’t claim with your rent for Housing Benefit are known as ineligible Service Charges.
On your service charge estimate Eligible and Ineligible services will be clearly identified.
Our key principles which set out our approach to service charge budget setting and management, so colleagues are clear and consistent with our offer. This aligns with the service delivery frameworks within Customer Services and Finance’s vision of supporting the delivery of the corporate plan, with a clear focus on financial viability.
If you have any further questions about your service charge, please contact us.
For the 12 months between 1 April 2023 and 31 March 2024 we estimate how much we thought it would cost to provide the services to our customers.
We base this on lots of things such as how much it has cost before, talking to our contractors about the contract price and how much that will cost.
Once the work has been carried out, we compare how much we thought it was going to cost with the actual cost and often, there is a difference.
When setting budgets, we estimate the cost for the coming financial year by looking at the costs in previous years and any changes in the cost of contracts from external suppliers. Based on this estimate we send customers a Service Charge and Rent Increase booklet, normally in February, and the amount the customer pays will be based on the estimated cost for the next financial year.
If the customer’s lease states they pay a variable service charge, it means that the service charges are likely to change from one year to another and that there will often be a difference between the estimated cost and the actual cost.
At the end of the financial year, we calculate how much we’ve actually paid for services and repairs. We then provide a Final Account (also known as a Year End Account) that must be sent to the customer by the end of September each year.
The Final Account statement will show the difference between what we thought we would spend (the estimate) and what we actually spent (the actual).
We are required to send a statement to summarise the costs of service charges to customers who pay variable service charges.
This must be sent by 30 September each year for charges for the 12 months up to the end of March that year
This shows as an underspend.
For Great Places customers, we will carry this credit balance forward to the next budget calculation as per their tenancy agreement.
Refunds will not be given immediately because we must follow the terms of your tenancy agreement and our policy in how we treat surpluses and deficits.
We do not demand deficits immediately; these are carried over to the next budget calculations, so we treat surpluses the same way. This is standard practice for social tenants who pay variable service charges in the sector.
This shows as an overspend.
For Great Places customers, we’ll carry it forward to the next year’s service charge estimate
As outlined in your tenancy agreement, regardless of how many months, weeks or days you have been in your property, when it comes to service charges the full prior year’s surplus or deficit is carried over to the new budget for the new tenant.
This is standard practice in the sector if the Housing Association operates a variable service charge regime for social tenants; as a landlord we are entitled to recover our full service costs as long as they are reasonably incurred.
It could be for a number of things, including (but not limited to) the list below:
If you require clarification on the electricity charge you have received, please contact your Neighbourhood Services Manager in the first instance.
Many service charges are charged on an ad-hoc basis, which means there may be charges one year and no charges the next.
Some costs are considered ad-hoc, which means we will sometimes wait for actual costs to pass on to customers.
Most of the service charges to a scheme or block are eligible for Housing Benefit and Universal Credit.
There are some exceptions, including water, energy and electricity supplied directly to the customers’ home; these are classed as ‘personal charges’ and are not eligible for Housing Benefit or Universal Credit.
The rules for Universal Credit are slightly different to those for Housing Benefit and Universal Credit. For example, Universal Credit doesn’t cover the cost of window cleaning for ground floor properties.
Variable services charges are based on the actual cost of service customers receive.
For the 12 months between 1 April 2023 and 31 March 2024, we estimate these charges in February, then confirm in September how much was actually spent.
We estimate the service charge based on spending from the previous year. We consider any expected changes to services, contract costs, VAT and inflation or any expected communal works coming up.
We must do this by law within 6 months of the financial year’s end.
We do understand that it may seem like a waste of paper and money to send customers these documents in the post, but to comply with legislation we must send them by post.
If you are struggling to make payment, please contact our Customer Hub in the first instance.
Please get in touch and let us know; it is possible to request a copy by email.
Please contact our Customer Hub in the first instance.
