Service charges for leaseholders

If you purchase a flat or maisonette from us, you become a leaseholder and will need to pay a service charge. This charge covers repairs and maintenance and any services provided to the property, including:

• lighting
• caretaker services
• lift maintenance (in the case of multi-storey blocks).

The lease to a flat or maisonette is for a period of up to 125 years. When you accept the terms and conditions of the lease, you are required by law to pay service charges.

Leaseholder costs

In addition to your monthly mortgage (where appropriate), the service charge and additonal costs are as follows:

• A ground rent of £10 per year
• An annual service charge to cover repairs and maintenance and any services provided to the property. This includes a maintenance and administration fee and a building insurance premium
• Your share of future major building works

Notification of service charges

When you are notified of the selling price of your flat or maisonette, you will be given a schedule headed ‘Schedule to Section 125 Notice’. This will provide you with details of the estimated annual cost of the service and maintenance of your property and will usually remain fixed for the first five years of the lease.

The schedule will also indicate estimates for major works which may be planned over the next five years. If they are carried out, you will need to pay an additional contribution.

When and how to pay

After the completion of the purchase of your flat or maisonette you will be sent an invoice for the service charge every three months. This invoice is based on the estimate and is payable in advance.

Settlement account

A 'settlement account' is prepared at the end of the first five-year period and then annually, from the date the lease commences.

We will gather the actual charges and offset them against the service charges you have paid. Will will give you a statement that will show whether you owe us any money or are due a refund.

If you sell your property

You will be entitled to a settlement account based on the time you were the legal owner. Any part year is charged pro-rata on the same basis as described above.

Repairs and maintenance

The inside of your flat or maisonette and any service pipes or cables, are your responsibility.

We are responsible for any communal areas including:

• corridors
• landings
• stairwells
• common entrance doors
• shared water facilities

We cover the cost of these in the service charge.