Rent and service charge review

We review our rent and service charges once a year, usually in April. If your rent or service charge changes, we will write to you at least a month before it changes.

 

Changes to rent and service charges for 2019/20

Here are some frequently asked questions to help you understand the changes. Click on the questions below to jump straight to the answers.

 

What does my rent pay for?

How do you decide how much my rent is?

What does my service charge pay for?

Who decides how much my service charge is?

What does ‘staff costs’ cover?

What does the charge ‘refuse disposal’ cover?

What does the charge ‘tree works’ cover?

What does the charge ‘sundries’ cover?

What does ‘personal charge’ mean?

What does the ‘administration fee’ cover?

Why are there two 'administration fees'?

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

What is the ‘balance brought forward’ figure? 

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

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

How can I pay my service charge?

What if I have difficulty paying my service charge?

Why does my statement look different this year?

 

Answers

 

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 also pay a rent but pay for their own repairs

 

How do you decide how much my rent is?

We are required to set and change rents in line with a formula 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.

However, this cut does not apply to the service charges you pay. This means that the total weekly/monthly amount you pay in rent and service charges may not go down. For example:

 
If your current rent is £100 and service charge is £5   £105.00
Next year, your rent will go down by 1% to £99.00
However, the service charge may increase from £5 to £6.20
This would mean that your new total would be £105.20

 

If the service charge reduces, then you’ll be charged a lower amount.

 

What does my service charge pay for?

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 the previous year and estimating the costs over the coming year. For example, if water for the communal area cost £100 and we are advised of a 5% increase this year, the new charge would be £105.

 

Variable service charge

If your tenancy started in 2010 or after, 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.

 

Fixed service charge

If you have an older tenancy agreement or licence and did not agree to the changes, then you will be paying a fixed service charge. This means where we have overestimated charges in one particular year, we won’t refund the amount in the next year’s service charge. If you would like to change this please contact us to sign a variation to move you to a variable arrangement.

 

What does ‘staff costs’ cover?

This is to cover the cost of staff connected directly to your services, for example a scheme manager.

 

What does the charge ‘refuse disposal’ cover?

This charge covers the cost of removing any fly-tipped items or one-off cleaning. As this is quite difficult to predict we will use actual costs, averaged over three years.

The council isn’t responsible for clearing any items fly-tipped in areas where the land has been adopted by us.

This charge does not cover the cleaning of wheelie bins.

 

What does the charge ‘tree works’ cover?

This covers all communal tree pruning and felling.

 

What does the charge ‘sundries’ cover?

These are incidental costs for things such as rock salt which may have been purchased for use on your estate. Accounts will be amended accordingly on your next service charge statement if it isn’t used, but only if you pay a variable service charge (tenancy agreement signed).

 

What does ‘personal charge’ mean?

This is a charge for a service which relates directly to you as an individual resident for example water charges. This is not a communal charge.

 

What does the ‘administration 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 'administration fees'?

One is 7% and is added to charges from management agents. These are marked ‘management charge fee’ on the statement. The other is 15%.

 

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 service charge?

If you pay by Direct Debit your amount will be changed by us from April 2019 to reflect the new amount. However, if you’re on a payment plan or receiving housing benefit shortfall then please contact us on 0300 500 6262 to have your Direct Debit amended.

To pay by rent payment card, call the automated telephone line on 0330 041 6497 for free during working hours. If you can’t contact us during working hours, please call 0844 557 8321 (calls to this number are charged at 7p per minute).

 

What if I have difficulty paying my service charge?

Please contact us immediately on 0300 500 6262 and we’ll be able to advise and assist you.

 

Why does my statement look different this year?

We've introduced a new computer system. The new format has been reviewed and we believe the new style is clearer and easier to understand.

Due to rounding, numbers presented in your statement may not add up precisely to the totals indicated.

 

We hope this answers your questions about the changes to your rent and service charges.

If you have any other questions relating to this change, please contact us on 0300 500 6262 or email info@chg.org.uk