What is the service charge for?

seabass

Just looking at renting flats and a few of them include a service charge, not a clue what this is for, does it cover anything such as bills? And why don't they just include it in the rent in the first place if you have to pay it.

One I am looking at is for £70 per month (1 bed flat), is that excessive?

RetroBob

No it won't include utility bills for your flat - it's for upkeep of shared locations, ie. hallway, parking, garden etc. Usually get paid for doing sweet FA.

Just add this to the rent and compare it to other similar flats out there. Make sure you find out if they also have a service charge to make a fair comparison.

ixwood

And find out if that covers out of the ordinary big expenses, like a new roof for instance. It probably doesn't. In a lot of places, you can get an unexpected bill for £5 or £10K.

RHemmings

ixwood wrote: »

And find out if that covers out of the ordinary big expenses, like a new roof for instance. It probably doesn't. In a lot of places, you can get an unexpected bill for £5 or £10K.

Surely the landlord would be responsible for replacing the roof.

m_13

The service charge would normally be paid for by the landlord. If the building is leasehold - which most flats are - it covers building insurance for the whole block and the maintenance and upkeep of communal areas usually including the car park etc. It's allowable against income for landlords in most cases so would not be paid by a tenant.

Large items are usually paid for by a sinking fund which accrues and is then used for large expenditure. However, often the fund does not cover the expenditure - new roof etc - and the owner has to contribute. However, other than putting up the rent to contribute, the landlord can't get the tenant to do anything about it.