Service charges are allocated and invoiced in accordance with the terms of your Lease or Transfer.
The Service Charge collected from all property owners is to pay for the regular maintenance of the development. These monies are used to ensure all communal areas and grounds are maintained to the highest standard, buildings are insured, utility costs such as gas and electricity are paid and that all residents can enjoy a clean, pleasant and safe environment.
The money you pay can only be spent on your development, and only residents on your development can benefit from it. Money collected is never used on other developments. These requirements are all designed to protect you and to ensure your fund is safeguarded.
For your benefit and peace of mind, all owners will receive a certified set of accounts after completion of the first accounting year. Any surplus on your ‘on account’ payment will be credited in accordance with the terms of your Lease or Transfer. Similarly, any shortfall will be charged.
Payment on Account
Various items of maintenance and repair clearly involve the expenditure of money. Most leases provide for advance payments to be made in order to ensure that we are in funds and able to meet bills as they fall due. Before the commencement of a new financial year, we will send you a Budget of likely service charge expenditure. It is important to appreciate that, this is only an estimate (often based upon experience in prior years and known items of current expenditure). We can not anticipate all circumstances. We will then invoice you for advance payment on account of this Budget at least 21 days before the advance payment must be made. Please ensure that your payment reaches us by the due date.
Payment plans (via Direct Debit)
Depending on the terms of your lease and management agreement with you RMC or similar we may offer a payment plan to split the service charge into 4,6,9 or 12 monthly direct debit payments. This makes it easier on your finances as we don’t spend your service charge on day one. However the reason we can not offer 12 months at all developments will relate to cash flow restrictions (for example when the block insurance policy is due).
Payments in respect of Service Charge Expenditure are due to be paid on the dates specified in your lease. We will invoice you at least 21 days before the payment date. It is important that payments are made promptly otherwise there simply will not be the funds to pay for necessary expenses. It is our duty to ensure that all contributions are collected in full and in a timely manner for continuity of service
If any payments are late we will send you an overdue statement. If payment is still not received, we will send you a firm reminder, which may incur an administration fee. Some Leaseholders take objection to receiving such a communication and we regret its necessity. However a minority of Leaseholders take a somewhat casual approach to Service Charges and make payment when they feel like it. This is clearly unfair on the vast majority of other Leaseholders who do pay on the due dates. We retain the right to add interest (at rate specified in your lease) or such rate as may be allowed by the Courts on any sums that are more than 14 days overdue.
If we receive no response to our reminder we will have no alternative but to place the debt with our debt collection agency / solicitors for collection and seek to recover not only the outstanding sums but also interest and legal costs. Failure to pay Service Charge Accounts could lead to an action for forfeiture of your lease after we have obtained a certificate from the Court or the Leasehold Valuation Tribunal that the Service Charge is reasonable. If you are going to have difficulties making payment, please contact as soon as possible. It may be possible to work out a sensible payment regime. However if you do not communicate with us we will pass the papers to our solicitors and you will then become liable for legal costs as well as the amount outstanding.