Service charges & sinking funds

You may pay service charges in addition to your rent.  You’ll receive details of any service charges at the start of your tenancy.   Service charges cover services, repairs, maintenance and other costs, which vary from year to year.  Examples of items classed as services include the following:

• Cleaning and servicing communal areas
• Refuse services
• Fire alarms, detection and fire fighting equipment
• Door entry maintenance
• Lighting in communal areas
• Maintaining common grounds
• Decorating communal rooms
• Maintaining communal equipment
This list is not exhaustive.

How we work out service charges

Service charges are based on the estimated costs of providing services to you.  You’ll be notified about these estimated costs before the start of each financial year.  At the end of the year, we’ll work out the actual cost of providing these services.  We’ll notify you each September about the actual cost of providing the service received compared with the estimated amount you’ve been charged.  We’ll then make an adjustment for any under or over payments you’ve made. Please contact us if you have any queries regarding service charges.

Sinking funds

A sinking fund is money which has been charged over a period of time to pay for major work such as cyclical decorations, replacing a roof or replacing a lift or parts of a lift when they wear out.

We don’t collect sinking funds from all tenants. Your tenancy agreement will say if you have to contribute to a sinking fund.  If you do, we’ll include this amount in your service charge.
The following list, which is not exhaustive, includes typical items where sinking funds are maintained:
• Communal TV aerial
• Door entry
• Lifts
• Fire equipment

How much should the sinking fund hold?

We work out how much the sinking fund should hold by estimating how much certain items would cost to replace at the end of their ‘life’.  This is the basis for our collection each year, so we should have enough to cover all the costs in the future.

We regularly review the sinking fund to make sure there’s enough to cover the cost of the works. There may be times when we get our estimates wrong and there’s not enough money in the fund to pay for work that is needed.  If this happens we’ll consult you.

We collect sinking fund contributions through the service charge, and hold it in an account which makes interest.  The net interest is added to the fund each year after provision for any tax payable has been made