Rent and service charges for tenants - what you need to know

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

 

What does my rent pay for?

Your rent pays for:

  • Repairs and improvements to your home and surrounding neighbourhood (customers in general needs housing only*)
  • Our office and staff costs to provide homes and services
  • Interest on the loans we have taken out in order to build homes

*Shared owners pay a rent but also pay for repairs to their properties

 

How do you decide how much my rent is?

We are required to set and charge rents in line with guidelines set by the government.

In July 2015, the government announced that that all rents paid in the social housing sector would be reduced by 1% a year for four years from 2016/17 to 2019/20. In 2019, a new policy on setting rents for social housing was issued by the government and allows rent to be increased in line with the Consumer Prices Index (CPI) plus 1% each year. However, these guidelines don’t apply to service charges, so the total that you pay may increase by more than this.

 

What does my service charge pay for?

Most tenants will pay a service charge to cover the cost of services which are not included within the rent.

The breakdown of your service charge outlines the cost of the services you receive that aren’t paid for in your rent.

Your service charge may pay for items such as:

  • Grass cutting and gardening
  • Cleaning of communal areas
  • Gas, electricity and water use in communal areas
  • Window cleaning
  • Servicing and maintenance of communal television aerials
  • Laundry facilities
  • The service and maintenance of CCTV equipment
  • Parking controls
  • Testing, servicing and inspection of fire safety equipment

 

Who decides how much my service charge is?

The way in which your service charge is set depends on your tenancy agreement. We calculate your service charge by looking at how much services have cost in the previous year and use this to estimate the costs for the coming year. If we know there are going to be changes to contracted costs we will take this in to account.

 

What is a variable service charge?

If your tenancy started between 2010 and November 2019, you will have a variable service charge.

This is also the case if your tenancy started before 2010 but you agreed to changes to your tenancy agreement in 2010.

Having a variable service charge means that if we estimate your service charge incorrectly we will correct this in the following year’s service charge. For example, if the cost of the service was £200 but our original estimate was £220, the £20 overcharged would be refunded through the following year’s service charge. The same would apply where we have undercharged for a service in any particular year.

 

What is a fixed service charge?

If you have an older tenancy agreement or licence and didn’t agree to the changes, or your tenancy agreement started after 1 December 2019, then you will be paying a fixed service charge. This means where we have underestimated the charges in any particular year, you will not be charged for any shortfall.  However, if we have overestimated charges in one particular year, we won’t refund the difference.

 

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 ‘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 ‘tree works’ cover?

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

 

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 is charged to all rental customers at the standard 15% rate. The fee covers the administration costs of the services we provide.

 

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 ‘management agents’ cover?

In some circumstances a management agent provides some or all of the services on a scheme or estate. The management agent bills us for those services and this is the cost of those services.

 

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

This is quite common. An example would be where the electric bill for one block differs to another. If your service charges are ‘variable’ then each block will pay for exactly what they have consumed.

 

What is the ‘balance brought forward’ figure? 

This is the surplus/deficit balance from the previous year’s reconciliation, brought forward and added to the new year’s estimate.

 

What happens if I have overpaid? (variable service charge only)

The surplus will be deducted from your next year’s estimated service charge.

 

What happens if I have underpaid? (variable service charge only)

The deficit will be added to your next year’s estimated service charge.

 

How can I pay my 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 online
  • 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.

 

Am I entitled to help with rent or service charge payments through housing benefit or universal credit? 

If you have a low income or are in receipt of benefits you may be entitled to help with your rent or service charge payments through housing benefit or universal credit.

We will offer you advice about claiming housing benefit or universal credit and can assist you in making a claim for this or any other benefits.

You should send your claim, along with any information required, to your local council or you can contact us if you are not sure what to do.