Homeowner service charges
Everything you need to know about service charges as a homeowner.
Service charges cover the cost of the services we provide under the terms of your lease or transfer deed which is the agreement you have made with us. These charges vary from year to year depending on what has been spent to provide the services.
Your lease or transfer deed will tell you what service charges you need to contribute.
Homeowner service charge FAQs
How can I check my service charge?
The services we provide depend on the terms of your agreement and the type of property you have. It could include:
- Cleaning of communal areas
- Communal grounds maintenance
- Lift servicing
- Repairs and maintenance of communal areas
- Buildings insurance
- Reserve fund contributions
- Management fees
How are service charges calculated?
If you are a homeowner, you are charged a variable service charge.
This means we estimate your service charge every year and charge this amount at the beginning of the financial year. Then at the end of the financial year, we calculate what we have spent on services and compare the difference.
If we have spent less than we estimated, we will add credit to your account. If we have spent more than we estimated, you will be asked to pay the outstanding amount.
When do I have to pay my service charge?
Your legal agreement tells you when you need to make a payment. Usually, you need to pay your service charge in 12 equal monthly instalments.
Your agreement might say that you need to pay in advance; you will have the option to spread out the payments and pay monthly by direct debit.
How can I pay?
There are several ways you can pay:
Cheque payable to Home Group Limited and send to Leasehold Team, One Strawberry Lane, Newcastle upon Tyne, NE1 4BX
Direct Debit by calling 0345 141 4663 and choosing option three.
Debit or credit card by calling 0345 141 4663 and choosing option three.
BACS payments. You can make a payment directly into the following account:
Home Group Limited
Sort code: 20-59-79
Account number: 63908208
Please make sure that you quote your customer reference number when making payments.
What happens if I don't pay my service charge?
If you are finding it hard to keep up with your payments, then please contact our leasehold customer support team on 0345 141 4663 or email us.
We may contact your mortgage lender or begin legal proceedings if:
- We can’t contact you to discuss your arrears
- You don’t agree to a repayment arrangement or
- You don’t keep to a repayment agreement you have made
Can I challenge service charges?
If you are a leaseholder you have a right to challenge service charges, even when you have already paid. Every time we send service charge estimates or statements of costs to leaseholders, we provide a document that details these rights and obligations.
If you spot an issue or have any questions about your service charges, please contact our leasehold customer support team on 0345 141 4663 or email us.
If we can’t resolve your dispute, you can contact the First-tier Tribunal (Property Chamber). The tribunal will look at the costs and services or works provided and decide if the service charges were reasonable.
The Leasehold Advisory Service is a government funded independent body that gives free advice to residential leaseholders on service charges and other matters.
Do I have a right to be consulted?
If you are a leaseholder, we must let you know if we plan to:
- Carry out work that costs each leaseholder more than £250 per year
- Enter into a contract to provide services for more than a year and that will cost each leaseholder more than £100 per year
This process is called a section 20 consultation. As part of this process you have the right to comment on the proposals and in some cases nominate alternative contractors.
What if I have a managing agent?
Your home may be part of a development where some or all the services are provided by a managing agent for which a management fee is payable to the agent. This is usually because Home Group is not the freeholder of the development. In this case, the service charge budget will be set by the managing agent and we will review this budget carefully.
Your service charge will include a small fee to cover our costs of producing the annual accounts. The managing agent may just provide estate management services, or they may provide communal repairs, maintenance and sometimes building insurance.
What is a reserve fund?
Many leases allow the landlord to collect sums of money in advance to create a reserve fund (sometimes referred to as a sinking or building fund).
The purpose of these funds is to build up a sum of money which can be used for expensive works which don’t happen every year. It could be something like lift replacements, structural repairs, or external decoration.
This reduces the likelihood of you having to pay significant amounts when major works fall due, as the payments have been spread over a longer period.
How do I claim a service charge credit?
I own a freehold house, why do I have to pay a service charge?
Usually freehold houses have estate services provided by the local authority. This could include the maintenance of:
- Green spaces
However, some freehold houses are built on private land. This means the developer and local authority agree the communal facilities will not be ‘adopted’ by the local authority but will be privately managed. When this happens a management company will be appointed to look after the communal areas and charges will be payable.
If you are a freeholder (or own a leasehold house) you won’t contribute towards the costs of maintaining any blocks of flats within the development, but all residents will contribute towards the cost of maintaining communal areas of the estate.
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- Documents required when selling your home
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- Homeowner service charges
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- Repairs information for homeowners