Service charges
Here's all you need to know about Bernicia's service charges.
Service charges explained
A service charge is a fee paid by residents (usually tenants or leaseholders) to cover the costs of maintaining and managing communal areas and services in a building or on an estate. It typically applies to flats or housing estates where certain areas or facilities are shared. There are also service charges which relate specifically to the individual tenancy (e.g. personal water charges, personal utilities, stairlifts or supported alarm charges)
The specifics of what is included in a service charge depend on the property, but it often includes:
- Maintenance of communal areas: Cleaning, grounds maintenance & upkeep of shared spaces such as hallways, lobbies, staircases and outdoor areas.
- Utilities: Costs for communal electricity, water and heating in shared spaces
- Equipment Servicing: Routine servicing and upkeep of any communal equipment (e.g. lifts, door entry, CCTV, emergency lights)
- Replacement Costs: costs relating to the replacement of shared items in communal areas (e.g. laundry equipment, furnishings, decoration to communal areas)
- Administration Fees: Charges for the management services including calculation and maintenance of the service charge accounts or hiring contractors etc
If you live in sheltered or supported housing, your service charge might include costs for additional housing management services or to maintain shared areas such as lounges or personal gardens.
The main difference between fixed and variable service charges is how the costs are calculated.
- Fixed service charges: These charges are applied to our rented properties. Charges are predetermined at the beginning of the year and will not change regardless of the actual costs incurred.
- Variable service charges: These charges are applied to our leasehold properties. Charges are estimated with the amount adjusted at the end of the billing period if necessary to reflect the actual costs incurred.
The service charge is calculated based on the actual costs associated with providing the service to the property informed predominantly by procurement exercises. Where the actual cost is not known, the cost is based upon best estimate. The total cost of these services is then divided among the properties who benefit from them.
Service charges may differ between neighbours for several reasons.
- Location within the building: Residents in the same scheme or block don’t always use the same services. For example, a resident on the ground floor of a building might have direct access to the street from their home so they would not need to contribute towards the maintaining of the lifts or door entry systems into the communal hallways.
- Separate Blocks or Sections: Some schemes have multiple blocks where each block may have different services but share others. (e.g. communal utilities, number of lifts/stairlifts may differ in different blocks but grounds maintenance will remain the same)
- Lease Terms: There may be different lease types within the building so one neighbour could be on a variable and one fixed. The type you pay will depend on your tenancy agreement or lease.
- Timing of charges: If neighbours have moved in at different times, they may be charged differently based on the tenancy agreement at that time.
We hope you’ve found the information you need about your service charge.
We’re happy to help with any additional information or questions. Email contact@bernicia.com