Why do I have to pay service charges?

When you bought your lease, in effect you became a "shareholder" in the building your flat is in. This means that you have a responsibility to pay your share of the costs of maintaining and managing the building.

 

If you owned a freehold house you would have to pay all the costs of managing and maintaining your house. As a leaseholder you share those costs with your landlord and other leaseholders. If you have not owned a home before, the cost of running it can come as a shock.

 

As your landlord we have a duty to maintain the building and charge you your share of the cost. We also have to pay our share. The costs are shared among all the flats in the block (unless a cost belongs only to 1 flat or to part of a block) using a formula based on rateable values. Although rates are no longer charged, rateable value provides a useful method of splitting the charges. Under the lease this is the method we must use.  This means someone in a big flat will pay more than someone who lives in a small flat.

 

We try to bear in mind that some of our costs have to be shared by you and other leaseholders.  Some leaseholders would rather we did not spend any money at all.  But if we did this we would not be doing our duty to our tenants and your investment in your home would suffer.  Because we maintain nearly 5,000 homes we get cheaper rates on our repairs contract and we have a team of surveyors to look after your home.  Government regulations and our own rules covering contracts make sure our contractors give value for money.