Leasehold handbook – Service charges

by The Gateshead Housing Company & filed under Owning your home - leaseholder - leasehold handbook, Owning your home - leaseholders.

Invoices for annual charges

If you own the lease of a property, you are required to pay your share of the landlord’s cost of maintaining and repairing the structure and common parts of your building, as well as management costs. These costs are known as the annual service charge. There is also an annual charge for building insurance and ground rent.

Annual service charges are invoiced on an estimated basis in advance of the year ahead. At the end of February, we will invoice you for what we think it will cost to provide services from April to the following March. When the actual cost of providing services is known (June time), your service charge account will be adjusted to reflect the actual cost – resulting in a credit or debit being applied to your account. We will write to advise you of the actual cost and tell you the amount of any adjustment to your account.

See below for more information about annual service charges.

Invoices for major works schemes

Major works are large one-off works of repair, improvement or redecoration to the structure, external or communal areas of a block. This may include works such as renewing doors and windows, repairing or renewing roofs, replacing lifts or renewing fascias and guttering.

Our Investment Programme will benefit all our residents. You will not pay towards internal works to tenants’ homes, but you will be required to meet your share of the costs of works to communal fixtures and fittings, and the external structure and fabric of the building.

Major works invoices are payable within 21 days. However, if this is not possible, we offer various major works payment options.

Payment methods

We have a range of options to pay your service charges.

Difficulties in paying service charges

Tell us if you are having difficulty paying your service charges. We can tell you about any financial help you may be entitled to, including help from The Department for Work and Pensions. No matter how difficult your financial circumstances may seem, we will work with you to help get your service charge account back on track.

Email leasehold@gatesheadhousing.co.uk or call 0191 433 5395.

You can get free debt advice from the National Debtline and free benefit advice from the Government website Benefits calculators – GOV.UK

Non-payment of service charges

We will contact you if your account falls into arrears. We’ll tell you how much you owe and explain how you should pay (in full or in instalments) and when you should pay.

If you’re finding it difficult to keep up with your payments, let us know. We can help you:

  • Look at the money you have coming in and the money you have going out
  • Apply for all the welfare benefits you are entitled to

We will start legal action if:

  • You don’t seek any help with your debt (for example speaking to your mortgage lender or bank)
  • You don’t agree to a repayment arrangement to clear your arrears
  • You don’t keep to an agreement you made with us to pay by instalments

Legal action may lead to a court order against you to pay the debt. A record of the court order will normally be kept for six years unless you pay the debt within one month. This may affect your ability to obtain credit.

If you do not comply with the court order, we will ask the court for permission to enforce the order. This might include:

  • Deducting debt from your salary
  • Securing a charge for the debt against your property
  • Removing possessions from your property and selling them to repay the debt
  • Selling your property to repay the debt or ending your lease and repossessing the property

If you have money problems, talk to us straight away. Don’t ignore the situation.

If you think your charges are wrong

Call us on 0191 433 5395.

We’ll send you a detailed breakdown of how we calculated your charges. If you still think some service charge items are wrong, let us know. We’ll be happy to meet you or talk with you on the phone.

If we are unable to sort out the issue this way, write to us explaining the part of your service charge that you are challenging and why. We will investigate and write to you within ten working days. If we think it is going to take longer, we will let you know.

Please continue to pay your charges while we investigate. If we uphold your dispute, we will write off that part of your service charge. This could be because:

  • A service has not been provided
    or
  • A service falls below our standards
    or
  • A part of the service charge is not recoverable by law

If we do not uphold your dispute, we will tell you why we believe your service charge is reasonable. If you are not satisfied with our response, you have the right to take your dispute to an independent tribunal. We will give you details of this service and the Leasehold Advisory Service (free legal advice service) when we write to you.

First-tier Tribunal (Property Chamber)

The First-tier Tribunal (Property Chamber) (Residential Property) is the forum for dealing with matters involving residential disputes between leaseholders and their landlord.

It can:

  • Determine whether a service charge or administration charge is payable – this also applies to a service charge which has already been paid
  • Vary a lease that doesn’t make adequate provision for a service charge or other charges
  • Determine whether to dispense with or to modify the landlord’s requirement to consult with leaseholders before carrying out major works and recharging leaseholders for these works via the service charge
  • Award costs where a leaseholder or landlord has acted unreasonably

Residential property: Northern region

1st Floor
Piccadilly Exchange
2 Piccadilly Plaza
Manchester
M1 4AH
United Kingdom

Tel: 0161 237 9491
Email: rpnorthern@justice.co.uk
Website: First-tier Tribunal (Property Chamber)

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