How do I know what I am paying for within the service charge?
The annual budget you receive will detail what you are paying towards by way of your service charge. It will detail the area of cost (e.g. gardening or cleaning) and the amount that has been estimated to be spent in that area in the year. You will be paying an apportioned amount of that annual cost.
Is my service charge likely to increase?
BNS looks at the level of service charge on an annual basis together with the Freeholder or Directors of the Management Company. We look at whether the cost of any services, such as cleaning or gardening, is likely to change and what works are due to be carried out on the development. Due to this, the amount of service charge you are asked to pay can go up or down. The budget is always approved by the Freeholder or Directors of the Management Company before being sent out to all homeowners.
There is an element of reserve fund in the service charge budget I have received. What is this for?
If permitted by your Lease or Transfer Deed, money will be collected to be put aside into a reserve fund. This is a fund set up to pay for major works due on the development and saves homeowners from being asked for large one-off payments when repairs are needed. BNS encourages all of our clients to have a long term maintenance plan drawn up to cover a 5-10 year period. Ideally this should be done by a surveyor who will look at the condition of the development and give sound advice on matters such as when the roof will need replacing and an estimate of the cost to do so. It will also take into consideration any requirements of leases for the development which may dictate the frequency of internal or external decorations. The plan is then used to establish how much should be put into the reserve fund each year to ensure payment of these can be covered from this pot of money and ultimately that the development is able to be kept in the best condition possible.
I have received an invoice for a year end adjustment. What is this for?
The service charge invoice you will have received earlier in the year will have been based on an estimate of what BNS and the Freeholder or Directors of the Management Company of your development believed would be spent in that year. At the end of the year, service charge accounts are completed which detail the exact amount that was actually spent. If required by your Lease or Transfer Deed, a year end adjustment will be made so that the amount collected balances with the amount spent. Therefore, if there has been an overspend, you will receive an invoice to cover this. Similarly, if there has been an underspend, your service charge account will be credited.
What happens if I do not pay my service charge?
There is no excuse to not pay your service charge. If you do not pay your service charge we will start our debt collection procedure. This will incur further fees being added to your account and could lead to Solicitors being appointed to act in the recovery.
If you have any further questions, please get in touch and we will be happy to help.