Service charge management
Effective service charge management is critical for landlords, leaseholders and residents, providing a steady cash flow to cover ongoing repairs and maintenance.
Without clear guidelines in place for collecting the service charge, a property can easily fall into disrepair and decline in value.
That’s why many leaseholders, developers and RMCs enlist the support of a bespoke property management company like SBA to help with service charge management.
What is a service charge on a property?
A service charge on a property is a fee paid by each flat or apartment within a building towards the collective costs of managing and maintaining the development as a whole.
At SBA Property Management, we collect a service charge to cover the costs associated with the maintenance, repair and management of the shared areas and facilities within a property, along with other administrative tasks.
This allows us to maintain high-quality communal spaces and shared amenities, benefitting residents and freeholders alike.
What does the service charge cover?
Property service charges vary depending on the need of each individual property, however they will generally cover costs associated with maintenance, major works and cleaning, as well as administrative costs for day-to-day management, compliance and other legal services.
Maintenance and repairs
One of the main expenses covered by the service charge is the maintenance and repair work that forms a part of day-to-day block management.
This includes carrying out regular site inspections to ensure that any issues with our properties are resolved in a timely manner. If something needs to be fixed, our team will schedule a repair and handle the service contracts on your behalf.
Major works
The service charge is also used to pay for major repairs and additional works that are outside the scope of regular maintenance.
This could be changes to the external structure of a building or major works in shared areas like lifts and fire escapes. Allocating a portion of the service charge to the reserve fund ensures that any future major repairs or additional works are appropriately financed.
Cleaning and upkeep
The costs associated with waste management and cleaning in the communal areas of the building are also covered by the service charge.
These services form a key part of facilities management and contribute towards the general upkeep of the building, ensuring it is a comfortable place to live or work.
Compliance and legal services
Carrying out regular safety checks and meeting building compliance requirements is one of the biggest expenses associated with managing a property.
Part of the service charge goes towards health and safety inspections, fire assessments and building insurance. It also covers the cost of any meetings with local and statutory bodies on matters of building compliance as well as dealing with solicitor enquiries on lease sales.
As a bespoke property management company, our service charge will always reflect the level of service provided within the property. Your lease agreement will specify exactly what the service charge covers and provide further details of your financial responsibilities.
How is the service charge calculated?
The service charge on each of our properties is calculated using an annual draft budget that estimates a fee based on the previous year’s spend and any forecasted plans for the coming year. The total is then split between the owners based on the lease or agreement apportionments.
Once paid, the service charge is held in a designated client-named bank account in accordance with Section 42 of the Landlord and Tenant Act of 1987.
All fees and charges are set out fairly and honestly for residents to see using a transparent accounting process. Service contracts are also regularly tendered to ensure all charges represent value for money.
How can we help with your service charge?
At SBA, we work closely with a strong partner network to ensure that your property is being managed to the highest standards at a competitive cost for the services provided.
We understand that the service charge can be a significant expense and as a bespoke property management company offer flexible payment plans to spread the cost over a certain period.
Ultimately, our aim is to ensure costs for managing and maintaining property are split fairly between owners and offer the best value for money.
Service charge management is an integral part of our offering. With our dedicated team, you can expect the highest standards of maintenance of your property.
Contact us today to learn more about how we can help you with effective service charge management.
Telephone: 020 7629 4949
Email: office@sbaproperty.com
SBA out-of-hours contact: 020 7629 4949
SBA Property Management
91 Wimpole Street
London W1G 0EF