Confused by service charge!

curious_badger

Hi all, I hope someone can help ..

I live in a close comprising of 107 flats

Me and my partner received the annual service charge demand/breakdown recently.

The breakdown shows a grand total of £110,665.
Followed by our payable portion of that, which is £1,243

Now, I'm confused, because that £110,665 total divided by 107 flats would mean £1,034 (over £200 cheaper than demanded!)

I've done the maths and the total has only been divided by 89 flats (18 flats shy). We live in a 1 bed, so if the charge differs for bigger/smaller properties then we should be paying the lower amount anyway ..

Obviously it's Sunday, so can't call to find out, but hoped someone would be able to offer a plausible explanation so I can make sense of it? Is it possible that the unnacounted 18 flats are council? So everyone else pays for them?

Thanks!

moneyistooshorttomention

I'd hazard a guess (after conversation with someone in a similar position today) that its the owner-occupiers only paying the charge.

Errrm.....as I recall = I think people were told (by the media) at the time that they were using "right to buy" to buy their Council flats that they would find themselves in this sort of position when maintenance bills for the blocks as a whole came in.

Joanthebone

Even if the flats are tenanted, surely the landlords (being leaseholders) would still be liable for the service charges? When I let my property I still paid the ground rent etc.

G_M

What makes you assume each flat pays an equal share?

eg: how many bedrooms in your flat? Are there any smaller/bigger flats (or studios) in the block?

Do you benefit from anything others don't eg garden? garage? exclusive lift? swimming pool?

moneyistooshorttomention

Presumably its different between public sector rented flats and private sector rented flats.

With public sector property (ie that still is) then I would think there would be a communal fund of grant money or the like from elsewhere that covers at least part of the costs of maintenance work. I seem to recall that was how things worked back when I was renting public sector accommodation. It was many years ago now - but our rents had been set at the level they had been set at (very favourably comparable with private sector ones at that time) and those rents were what us tenants expected our maintenance costs to be paid from. However, those maintenance costs must have been so high for the level of facilities we had (including resident caretaker as well) that I guess government grants and the like must have made up the shortfall I presume there was.

curious_badger

Joanthebone - I always understood this to be the case also. Maybe it is and G_M's point regarding property size equating to a higher/lower contribution is the piece of the puzzle I have overlooked.

moneyistooshorttomention wrote: »

I'd hazard a guess (after conversation with someone in a similar position today) that its the owner-occupiers only paying the charge.

Errrm.....as I recall = I think people were told (by the media) at the time that they were using "right to buy" to buy their Council flats that they would find themselves in this sort of position when maintenance bills for the blocks as a whole came in.

Hmm, it could just be owner-occupiers.
I have no idea about the following so I will ask: Is it common/typical that council dwellings' service charge could be paid for by the rest of the buildings property owners? Never thought about it before, so I'm intregued if you would know?

G_M wrote: »

What makes you assume each flat pays an equal share?

eg: how many bedrooms in your flat? Are there any smaller/bigger flats (or studios) in the block?

Do you benefit from anything others don't eg garden? garage? exclusive lift? swimming pool?

Fair point! I didn't consider this possibility - now that I've had a think, I know there are definitely Studios, 1 beds and 2 beds (we have a 1 bed, so would be paying in between cheapest/dearest - if it's split that way, I will report back once I have an answer)

Definitely no swimming pool, garden or garage (though a swimming pool would be nice now you say that!) - we do benefit from the loft for storage space though (not allowed to be converted). Again, coupled with size=portion payment this could play a role in why we pay more than my worked out equal average

moneyistooshorttomention wrote: »

Presumably its different between public sector rented flats and private sector rented flats.

With public sector property (ie that still is) then I would think there would be a communal fund of grant money or the like from elsewhere that covers at least part of the costs of maintenance work. I seem to recall that was how things worked back when I was renting public sector accommodation. It was many years ago now - but our rents had been set at the level they had been set at (very favourably comparable with private sector ones at that time) and those rents were what us tenants expected our maintenance costs to be paid from. However, those maintenance costs must have been so high for the level of facilities we had (including resident caretaker as well) that I guess government grants and the like must have made up the shortfall I presume there was.

I assumed this was the case, after all it makes perfect sense to me.

Kynthia

Another thought; could some of the work have been to your property or section of the close and therefore not payable by all?

curious_badger

Have just noticed that the demand/breakdown does state
ALL FLATS: £1,243

Implying that it's a set amount for all of the flats regardless of size ...I suppose there is a chance that the management company have been lazy in not explaining this on the breakdown, but the total does not seem tailored to a property of a particular size (it just appears to be a "one price fits all" total for all of the flats.

curious_badger

Kynthia wrote: »

Another thought; could some of the work have been to your property or section of the close and therefore not payable by all?

Not that I'm aware of, and not that it's been specially mentioned in the breakdown - in fact the whole breakdown is very straight forward and doesn't show any specific charges that only apply to one block or particular door numbers. It really does appear to be a truly charged price for "all flats" (regardless of number of bedrooms). The only part that doesn't add up is the breakdowns grand total divided by 107 flats

BrassicWoman

Add 20% VAT?

jamei305

Looking at my flat management accounts, some flats have water included as they are on communal meters, some don't. Others have more communal areas to clean and so have higher bills for that. The only way to find out is ask for the accounts.