Ground rent and service charges
All you need to know about ground rent, service charges and maintenance fees.
Our leaseholders and shared owners pay us ground rent, service charges and management fees as part of the lease.
Ground rent is a payment you make to us, as the landlord and freeholder or head leaseholder, for using the land that your home is built on.
If you live in a flat or house that has shared areas or facilities, you’ll pay a service charge towards the cost of maintaining and repairing those areas.
If you’re a tenant, rather than a leaseholder or shared owner, you can find more information about your rent and service charges in our Your tenancy section.
Here are some examples of what your service charge may cover:
- administration charges
- buildings insurance
- cleaning of shared areas, such as stairs and hallways
- gardening and grounds maintenance, such as paths and car parks
- gas, water and electricity supplies to communal areas
- maintaining and repairing communal areas
- maintaining door entry systems and lifts
- maintaining fire equipment and fire safety checks
- a ‘sinking fund’ or ‘provision fund’ to cover future work such as replacing shared carpets in hallways and major repairs like new windows or roofs. The sinking fund may not cover the full cost of all future major repairs, depending on the cost of the work and how much money is in the fund at the time, but it will contribute towards it.
As well as what’s listed here, we may provide you with other services and carry out other work that affects your property or communal areas. You can find more details of what your service charge covers in your lease. We also explain the charges in detail in your annual service charge statement of account, sometimes called a service charge certificate, that we send to you every September.
You’ll either pay a fixed or variable service charge, depending on your lease. We’ll always let you know at least a month before any changes to your service charge.
A fixed service charge is when we set your service charge at the start of the year, based on our estimates. The amount you pay doesn’t change, regardless of how much we spend. If it costs us more than we expected to maintain your home and neighbourhood, we’ll cover the additional costs. If we spend less than planned, you won’t receive a refund.
With variable service charges, we estimate the charges you will need to pay from April each year and write to tell you what your new payments will be.
At the end of each financial year, we review our accounts to calculate the difference between what we estimated and what we spent. In September, we’ll send you a statement of account, called a service charge certificate, which explains exactly what we spent and gives you an account balance. If you owe us any money, you will need to pay this off. If we owe you money, we will use this to offset future payments.
Management fees cover the administration costs involved in managing your lease.
We will invoice you separately if you have to pay ground rent. The easiest way to pay your ground rent, management fee and service charge is by using your online customer account.
We also have a number of other ways to pay.
If you can’t afford to pay your ground rent, management fee or service charge, please contact us as soon as possible.
You can find more information about what to do if you’re struggling to afford your bills on our financial advice page.
Legally, we must consult leaseholders and shared owners on qualifying long-term agreements and qualifying work. This is sometimes known as a ‘Section 20 consultation’.
A qualifying long-term agreement is when we enter into a contract lasting more than 12 months, where you’re likely to be charged more than £100 each year. Typically, these are contracts for cleaning shared areas, gardening and maintaining door entry systems, but the contracts could also be with contractors such as window fitting companies or fire safety specialists, etc.
Examples of qualifying works include repairs, maintenance and routine decoration or improvement work, where we will charge you more than £250 per year eg for roof repairs or replacing windows. We will consult you if you have to pay £250 or more towards the cost of any qualifying work during a financial year.
We’ll always consult any recognised residents’ associations if our maintenance or repairs will affect more than one household.