Leaseholders ground rent and service charges - what you need to know

We often receive a number of queries from leaseholders about their rent and service charges. So below, we have answered some of these frequently asked questions:


What does my service charge pay for?

A service charge is an amount you must pay for services you receive, which relate to the communal areas and the maintenance of the estate. The services your estate/block receives are shown on your individual statement.


How is my service charge calculated?

Your charges are calculated by looking at how much services have cost during the previous year and then estimating the cost for the coming year.  If we know there are going to be changes to contracted costs we will take these in to account.


What are the final service charge accounts telling me?

Your final account compares the estimated charge to the actual charge for the services provided for the last service charge year.

This shows whether there has been an over or underpayment of service charge for the last year. These are sometimes referred to as ‘reconciled accounts’.


What happens if I have overpaid?

If you have overpaid the difference will be credited to your account and then either

1. Left on your account.

2. Used towards clearing in part/full any debt on your account.

3. Used towards clearing in part/full an outstanding recharge.

4. On request we can send you a refund as along as point 2 & 3 do not apply.


What happens if I have underpaid?

If you have underpaid the difference will be charged to your account.

You will need to pay the shortfall by increasing your next service charge payment. If you pay your service charge by direct debit, the underpayment may be added to your next payment.


What is a sinking fund?

This is an amount paid regularly by the leaseholder to pay for any works which may need to take place in future years. This is sometimes called a reserve fund.


What is a cyclical fund?

Some leaseholders pay a cyclical fund. This is to cover the cost of redecoration of the communal parts of the building. 


If I move, is the sinking/ reserve fund refunded?

No, these funds will remain in the fund for the benefit of the scheme.


When do I have to pay my ground rent?

Your lease specifies that your ground rent is due and payable on or before the first day of the start of each new service charge year. You will receive at least one month’s notice prior to the start of the new service charge year when your ground rent is due. The amount of the ground rent will be specified in your lease.


How often do I have to pay my service charges?

At least one month before the start of the new service charge year, we will send you an annual bill showing what the estimated service charge will be for that year.

The annual estimate will be charged to your service charge account in twelve equal monthly instalments throughout that year. Your service charge is payable monthly in advance.

Within six months of the end of a service charge year, we will send you the audited service charge account for the previous year showing the actual spend compared to the estimate.

Any difference between the estimated and actual cost will be posted to your service charges account.


How can I pay my ground rent and service charges?

There are lots of ways you can pay:

  • Direct Debit - If you would like to set this up, please contact our customer services team on 0300 500 6262
  • Standing Order - Please tell your bank about the change in amount in plenty of time before your next payment is due
  • Online - with a debit card 
  • Paypoint - Pay in cash at any retailers displaying the PayPoint logo
  • Post Office - Pay by cash, debit card or cheque at the Post Office. Cheques should be made payable to 'Post Office Ltd'. Some branches no longer accept cheque payments
  • By phone - Call the Allpay automated line on 0330 041 6497 and pay by debit or credit card

For more information on how to pay, please see our payments option page or contact us on 0300 500 6262. 


What if I can’t pay my rent and service charges?

If for any reason you are unable to make a payment, please contact us immediately. You will receive advice on how to deal with the problem and if there is a specific reason for non-payment, it may be possible to come to an arrangement to clear the debt.

If you suffer a loss of income because of sickness, unemployment or some other change in circumstances, we will offer you advice on claiming benefits. We will also advise you on how to deal with any other debts.

It is important you contact us as soon as you think you may have a problem with making your payments. If you do not contact us we will take further action to recover the debt.


What is the charge ‘communal repairs’?

We calculate this cost at block level and apportion it between the other properties in your block. This charge is for repair work carried out to your block and not in your individual property.


What does ‘personal charge’ mean?

This is a charge for a service which is for the resident only and not communal e.g. utility charges for supplies in your own flat.


What does the charge ‘admin fee’ cover?

This fee is to cover the cost of us administering the services provided to you


Why are there two ‘admin fees’?

One is 7% and is added to charges from management agents. These are marked ‘admin fee-management agents’ on the statement.

The other is 15% which covers the administration costs of the services we provide.


What does the charge ‘tree works’ cover?

This covers the cost of tree surveys and all communal pruning and felling.


What does the charge ‘refuse disposal’ cover?

This charge covers the cost of removing fly tipped items or one-off bulky waste disposal (not for the emptying of wheelie bins). Your local council is not responsible for clearing any fly tipping in areas where the land has been adopted by us and we will therefore be charged for this service.


What does the charge ‘staff costs’ cover?

Where we still employ caretakers, this charge covers the cost of cleaning, gardening and/or litter picking on your estate. On some estates it will cover the cost of the scheme manager.


What does the charge ‘managing agents’ cover?

In some circumstances another company called a managing agent provides some or all of the services on a scheme or estate.  Where this is so the managing agent bills us for those services and this is the cost of those services.


Why is my charge different from my neighbour who lives in the next block?

This is quite common. Where services are supplied and billed separately these will be charged to the block(s) to which they relate and not all blocks receive the same services.  An example would be where there may be separate electricity bills for stairwell lighting for each block.