Home Ownership

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What is a service charge?A service charge is a charge that you are liable to pay under your lease. It normally covers the cost of such matters as general maintenance and repairs, insurance of the building and, where the services are provided, central heating, lifts, porterage, lighting and cleaning of common areas etc. The charges may also include the costs of management by the landlord.

What is the difference between ‘Estimated’ and ‘Actual’ service charges?Each year in March you will receive a set of estimated service charges for the financial year 1 April to 31 March. These are not the final costs, but a prediction of what your landlord expects to spend in managing and maintaining your property and block. The terms of your lease and the Landlord and Tenant Act 1985 (as amended) allow for service charges to be collected in advance, though they may be paid in monthly instalments.

At the end of the financial year, your landlord will have a record of what was actually spent on service charges for the year, including the cost of repairs, any cleaning or gardening contracts, the cost of communal lighting etc. These are known as ‘Actual’ costs or ‘Final Accounts’. The difference between the estimated costs, which is the amount you have already paid, and the actual costs, is called your Final Account Adjustment. 

How are 'Estimated' service charges calculated?Our aim is for the estimated costs to match the actual costs as closely as possible. This helps leaseholders to budget effectively, and also helps your landlord to recover funds and budget for future expenditure.

In order to match the estimated costs as closely as possible to the actual costs, we carry out an analysis of the actual costs for the past three years, for each service charge heading ‘ Building Repairs’, ‘Internal Communal Repairs’, ‘External Siteworks’ etc. 

We increase these costs by inflation, using published indices, so that the costs are set to an equivalent level for the new financial year and are more realistic. Often we will base the new estimate on an average amount across the last three years. Sometimes, however, we will need to take other factors into consideration, such as where there was an unusually high cost of repairs one year, or where a gardening contract was not previously in place.

How are Final Accounts calculated and why are they issued in September when the financial year ends on 31 March?After the financial year ends on 31 March your landlord begins to compile a list of total service charge costs for your block. Some of these, such as Repairs, will require careful checking to ensure that jobs have been raised for the correct block, that no jobs have been raised in error, and that the descriptions of each job are clear.

Producing the Final Accounts takes time, especially as some flats have over a dozen different service charges that are calculated in different ways. Before the Final Accounts are issued they are checked by the Homeownership team and by senior staff at the Royal Borough of Kensington & Chelsea. The figures are not released until all concerned are satisfied that they are as accurate as possible. For these reasons the Final Accounts are issued in September each year.

What do I need to do as a result of receiving the Final Accounts?The Final Accounts are your formal notification, certified by the Royal Borough of Kensington & Chelsea, of the service charge costs incurred for your block and property. There will be a Summary Sheet showing the total service charge costs estimated for your block, what the actual costs were, and what your share of these costs is, in accordance with your lease. You should look at the figures carefully, as this is the basis for any money you have already paid, and may be asked to pay. 

Whether you are required to do anything will depend on the difference between the actual and estimated costs, or your Final Account Adjustment. When the actual cost is higher than the estimate, you are required to pay the difference within 14 days. If the estimated costs were higher than the actual costs, however, you will receive a credit. If the balance on your account is in credit as a result, you may request a full refund or you can leave the credit in place and it will count towards your next quarter service charge payment(s).

What is a Section 20B Notice, and what should I do if I receive one?A Section 20B Notice is a legal notification (in accordance with Section 20B[2] of the Landlord and Tenant Act 1985) that the certified Final Accounts costs are not yet finalised. Our aim is to issue the Final Accounts within 18 months of the start of the financial year (by the end of September) but there are occasions when, for factors beyond our control, we cannot be confident in issuing the final figures. This may be because costs are unusually high and require further investigation. 

When this happens, we have no alternative but to serve a Section 20B Notice. This will state what costs we believe we have incurred like an ordinary Final Account, but importantly, these costs are not certified. If you receive this Notice you should keep it for your records, but you do not have to take any action. Instead you should wait for the Final Accounts to be issued, which will be done as soon as the certified figures are available.

Why should I have to pay a Final Account Adjustment for a period when I was not the leaseholder?Final Accounts are sent to the current leaseholder. If you have recently bought your property this may mean that the Final Accounts relate, in part or in full, to a period when you were not the owner. If the actual costs were higher than the estimated costs for this period, you will still be required to contribute towards any shortfall in the usual manner. 

When you purchase a property from a previous owner, it is usual for your solicitor to request that the seller keeps behind a sum of money to cover any possible shortfall in the Final Accounts. This is called a ‘retention’ and the amount is agreed by the buyer and seller’s solicitors. If this applies to you, you should contact your solicitor and send them a copy of the Final Accounts when these become available. They will then arrange for the money held in retention to cover part, or all, of the costs (depending on when you purchased the property). If there is a credit adjustment, not a debit, you will still need to inform your solicitor so that the money held in retention can be released back to the seller. 

Why am I charged a ‘Management Fee’ and what does it cover?The Management Fee is to recover the running costs of your landlord in managing your property and block. This is a non-profit service charge and covers the cost of staffing and providing the following service (please note the list below is not exclusive):

  • Sending out estimated service charges and Final Accounts each year 
  • Sending out account invoices/statements four times a year 
  • Logging payments on your account 
  • Dealing with account and service charge queries
  • Monitoring service contracts.

Why am I charged for graffiti removal and pest control if these services were not carried out to my block?Any block which has communal areas (internal or external) which are not adopted by the council (and therefore dealt with under your Council Tax) may experience problems with graffiti or nuisance creatures in these areas. 

The cost of graffiti removal and pest control is based on the cost of preventative teams that operate across the borough and on any work that might be carried out. Leaseholders will continue to pay an Estimate but will only be charged in the Final Accounts if work was carried out to the block or estate. 

Why should I have to pay towards a stairwell or lift if I live on the ground floor and do not use it?Your property forms part of the building. Under the terms of the lease you are liable to contribute towards the cost of all services provided to the block whether you benefit directly from them or not (with the exception of heating).

What should I do if I am not happy with the cleaning or gardening service?You should contact the Customer Service Team who will investigate your queries, call 0800 137 111.

Can I challenge my charges?If you think the charges are unreasonable or incorrect you can challenge it by writing to us, either by email or by post. Please make sure you tell us your address, and the item or items that you are challenging. Once we receive your letter or email we will consider your reasons for the challenge, check our figures and costs, and then decide whether to agree to your challenge and change the bill.

We will always try to sort out any challenges and disputes, but if you are unhappy with our reply, you can go on to challenge the particular service item you are unhappy with at a First Tier Tribunal (FTT). FTT’s are made up of a panel of three independent and impartial members. They will look at the facts of a leasehold disagreement and try to settle the dispute.

If you do have a problem with your service charge, you should raise it with our Home Ownership Team rather than through our formal complaints procedure. We don’t generally treat initial service-charge questions as complaints.

What should a summary of the service charge account under Section 21 of the Landlord and Tenant Act 1985 contain?The summary should show:

  • how the costs relate to the service charge demand, or if they will be included in a later demand;
  • any items for which the landlord did not receive a demand for payment during the accounting period; 
  • any items for which a demand was received and for which no payment was made during the accounting period; 
  • any items for which a demand was received and for which payment was made during the accounting period; and 
  • whether any of the costs relate to works for which an improvement grant has been or is to be paid.

I have received a service charge demand and I think it is too high. What should I do?A service charge is not payable unless it is reasonable but it is risky to withhold payment because this is likely to be a breach of your lease. It may be better to contact your landlord and express your concerns about the charge. You can try and resolve the situation amicably, perhaps through mediation. If this fails and you have evidence to challenge the charges, the matter can be determined by the First Tier Tribunal (FTT).

Are there any circumstances in which I can legally withhold my service charge?The circumstances in which you can legally withhold payment are;

  • Where the demand is not accompanied by the prescribed summary of rights and obligations. 
  • Where the demand does not contain the landlord’s name and address for service. 

Please note that if you receive a further demand in the correct form you may be required to pay.

My service charge has been consistent for some time, is it fixed?Not necessarily, you should refer to the terms of your lease to establish whether it is fixed or variable. Most service charges are variable.

How can I find out what my service charge is being used for?Under Sections 21 and 22 of the Landlord and Tenant Act 1985 (LTA 1985) you have the right to request a summary of the service charge account and to inspect receipts, accounts etc in relation to the last accounting year, or where accounts are not kept by accounting years, the past 12 months preceding the request.

You need to write to your home ownership officer and request a summary under Section 21 LTA 1985. The summary should be provided within one month of your request (or within six months of the end of the accounting period whichever is the later) and should be certified by a qualified accountant if there are more than four dwellings.

Once you have received the summary, you have the right under Section 22 of the LTA 1985 to inspect documents as a follow-up to provide more detail on the summary. Within six months of receipt of the summary you may write to the landlord or managing agent requiring them to allow you access to inspect the accounts, receipts and any other documents relevant to the service charge information in the summary and to provide facilities for them to be copied. Facilities for inspecting the documents should be provided within one month of your request and should be available for two months.

The Council are carrying out improvement works to the building, do I have to contribute towards the costs?You should refer to the terms of your lease to establish whether you can be required to contribute to the costs of carrying out improvements. If the lease does not require you to pay for improvements you may not have to contribute towards the costs, however there is sometimes a fine line between repair and improvement depending on the nature of the works. Such matters can be determined by First Tier Tribunal (FTT) if in dispute.

What is ground rent?Ground rent is a payment made by the leaseholder to the Council under the terms of the lease. A lease is a tenancy and so it is subject to the payment of ground rent. It is an income for the landlord rather than payment for the provision of services.

Am I liable to pay for the renewal of the roof on a block in which I own a flat?You should refer to the terms of your lease in order to establish what you are required to pay for. If your lease requires you to contribute to roof repairs you will be liable to pay provided the costs are reasonable and statutory requirements such as the Section 20 consultation procedure have been complied with.

What should the notice of estimates for major works contain?The notice of estimates must be sent to each leaseholder and the recognised tenants association, if there is one. It must include details of at least two estimates. The landlord must invite observations in writing within 30 days and must have regard to any observations received.

My landlord is going to do a lot of work to my building. Does he have to consult me before the work starts?Section 20 of the Landlord and Tenant Act 1985 requires the landlord to consult the leaseholders before carrying out major works which will cost any individual leaseholder more than £250. If consultation is not undertaken the landlord cannot recover more than £250 from any individual leaseholder towards the cost of the works unless the First Tier Tribunal  (FTT) has dispensed with the requirement to consult.

What should the notice of intention to carry out major works contain?A notice of intention must be sent to each leaseholder and the secretary of the recognised tenants association (RTA), if there is one. The notice must describe in general terms the works proposed, or specify a (reasonable) place and hours at which a description may be inspected.

The notice should also give the reasons why it is necessary to carry out the proposed works and invite observations in writing within 30 days. Where applicable it should also inform leaseholders of their right to nominate a contractor. The landlord must have regard to any observation received by the due date and seek estimates from nominated contractors where applicable.

My landlord has completed the work without seeking my views beforehand. What action can I take?If there is a dispute about whether or not your landlord has acted in accordance with the Section 20 consultation process, where required to do so, the matter can be referred to the First Tier Tribunal (FTT) for a determination. Please note that dispensation from the consultation process can be granted retrospectively by the FTT.

In cases where the landlord is not required to use the consultation process you still retain the right to challenge the costs if you feel they are unreasonable.

What should the notification of award of contract for major works contain?This notice should be given within 21 days of entering into the contract. It must contain the reasons for the award of the contract and give a summary of the leaseholders’ observations regarding the estimates or provide a place at which these could be inspected. This notice is not required where:

  • the contract has been awarded to a contractor nominated by a leaseholder or recognised tenants association (RTA) 
  • the contract has been awarded to the contractor with the lowest tender 

My landlord wants to enter into a qualifying long term agreement (QLTA). What should the notice of intention contain?A notice of intention must be sent to each leaseholder and the secretary of the recognised tenants association (RTA), if there is one. The notice must describe in general terms the agreement proposed, or specify a (reasonable) place and hours at which a description may be inspected.

The notice should also give the reasons why it is necessary to enter into the agreement and invite observations in writing within 30 days. Where applicable it should also inform leaseholders of their right to nominate a contractor. The landlord must have regard to any observation received by the due date and seek estimates from nominated contractors where applicable.

The Council wants to enter into a qualifying long term agreement (QLTA). What should the notice of estimates contain?If the agreement proposed is a QLTA and ‘public notice’ is not required the landlord must prepare at least two proposals (estimates) concerning the services in question. One of these must be from a contractor wholly unconnected with the landlord One must be from a contractor nominated by the leaseholders if they provided one. You have an opportunity to send in written observations on the estimate within 30 days. The landlord must have regard to any observations received.

What is the Section 20 consultation process for major works?The Section 20 consultation process generally has three stages:

  1. A notice of intention 
  2. Notification of estimates 
  3. Notification of award of contract 

The Council wants to enter into a qualifying long term agreement (QLTA). What steps do they need to take?The Section 20 consultation process generally has three stages:

  1. A notice of intention 
  2. Notification of estimates 
  3. Notification of award of contract 

The Council wants to enter into a qualifying long term agreement (QLTA). What should the notification of award of contract contain?This notice should be given within 21 days of entering into the contract. It must contain the reasons for the award of the contract and give a summary of the leaseholders’ observations regarding the estimates or provide a place at which these could be inspected. This notice is not required where:

  • the contract has been awarded to a contractor nominated by a leaseholder or recognised tenants association (RTA) 
  • the contract has been awarded to the contractor with the lowest tender 

What payment methods are available to homeowners?By phone

Please call 020 3859 6087 please select (option 6) – available 24 hours a day,  Please have your card details ready along with your payment reference number.

By internet

You can make payments online by visiting our website www.rbkc.gov.uk, To Make a payment online you will need to enter your payment reference number as shown on your Payment Card. This can be found on the bottom right hand corner of your Payment Card.

By internet or telephone banking

If your bank offers this service, you may be able to arrange a direct payment. You will need to contact your bank or access your account via the internet and arrange to make a direct payment to us. You will need to provide our bank account number: 00000000 (eight zeros), our bank sort code: 57-20-40 and reference number: (your payment reference number). Our bank is National Westminster.

By cheque

Please make all cheques payable to The Royal Borough of Kensington and Chelsea and write your payment reference number and property reference number on the reverse. Please send all cheques to: Royal Borough of Kensington & Chelsea, Network Hub, 292a Kensal Road, London, W10 5BE.

By direct debit

This is the most efficient and cost-effective method and avoids the need to adjust a monthly standing order each year. For more information or a mandate form please contact us. 

How can I get a statement of my service charge / major works account?You can request a statement of account at any time, provided this covers the period since you have been the leaseholder. Please contact us on 020 7605 6464 or by email at homeownership@rbkc.gov.uk specifying the period you require. Please provide your full name, the address and postcode of the leasehold property concerned, your contact address (if different) and your property reference number to help us identify you. A daytime telephone number will also be helpful.

I am getting behind with my service charge payments. What will the Council do?Under the terms of your lease agreement you are responsible for paying your service charges / major works within 21 days of your invoice date (25 March, 24 June, 29 September and 25 December). In the first instance we will write to you informing you that your service charge/ major works account has fallen into arrears and request that you arrange to bring your account up-to-date immediately. If you are unable to make the required payment then you should contact us immediately. The contact details will be shown on the letter that we send to you. If you have a mortgage, your mortgage lender may be able to assist you. They may pay the outstanding bill/arrears on your behalf and add it to your mortgage. This might be cheaper than getting a loan.

What if I can't pay?If you are having a problem with payment for whatever reason, please contact us immediately. If you are out of work, disabled or retired you may be able to get help with paying your service charges. For more information, you will need to contact your local Department for Work and Pensions office. You can also contact your local Citizens Advice Bureau or talk to us for advice.

The welfare benefit system can provide help to owner occupiers in certain circumstances if they have become unemployed or are suffering financial hardship. If you are in receipt of income support or Jobseeker's Allowance you should inform the benefits agency of the service charges you are required to pay. You will need to send a copy of each bill you receive - including your estimated service charge, your final account and any details of proposed works. You are required to inform them of any changes to your service charge within four weeks of receipt of the demand.

Your lease states that you have to pay service charges / major works promptly on demand. If you fail to do so and do not contact us, or if you fail to keep to an agreement, we may take legal action to recover the money you owe. If you fail to pay your service charges / major works you have broken the conditions of your lease and you could lose your home.

What if I cannot make payments because of issues relating to the Coronavirus pandemic?

We realise that the Coronavirus pandemic will be impacting on some people’s financial circumstances, however you should continue to pay your service charges if you are able to and avoid unnecessary arrears accumulating. The last thing we want is for leaseholders to fall into debt and experience hardship or distress. It is however important to state the Council relies on service charge and rent income to run its housing management services, which includes providing caretaking, repairs and maintenance services to your home, block and estate. If you are struggling financially we request you contact the home ownership team in the first instance to discuss options and ways in which we can assist. We are here to help.

If my service charge / major works account is in credit, can I have a refund?If your service charge / major works account is in credit, and there is no amount due on your other account (service charge / major works), then a refund can be given. Contact us to request a refund form.

I never see my caretaker and I’m not satisfied with the caretaking service.Although you may not often see your caretaker it does not necessarily mean that you are not receiving a service. You may be at work or somewhere else when the caretaker visits, or the caretaker may be at another property when you are at home.

Homeowners charges are based on the caretakers’ scheduled hours. If the caretaker only visits a couple of times a week it is possible that between visits the communal areas will be littered or problems will occur.

I have a leak from the property above. Who should I inform and who will deal with the problem?In the first instance you should contact your neighbour and inform them about the leak. They should contact customer services on 0800 137 111 if they are tenants or if the leak is emerging from communal pipes (generally concealed within walls or lofts). Ask them to arrange for the leak to be repaired if it is their responsibility (such as internal plumbing). If that is not possible contact us for advice.

Can I change the windows in my flat?The repair and replacement of the windows in your flat is the responsibility of the council. You are required to contribute to the repair/replacement cost through your major works charge. Please also note that if you replace your windows without having your lease amended you will be required to contribute to the cost of any future window replacement programme carried out to your building. Your contribution will not be reduced even if you do not have your windows replaced. You may be required to reinstate the property to its former condition if the windows have not been fitted to a reasonable standard or have not had appropriate planning and building regulations approval. You should contact us to find out about granting retrospective landlord consent under the terms of the lease.

I want to sell my flat and need information regarding the service charge and possible works.These sorts of enquiries will usually come through a solicitor; however, some leaseholders will contact us themselves. These enquiries are known as pre-sale enquiries and we sell an information pack to the current leaseholder (or their representative). Sometimes the prospective purchaser (or their representative) will request this information, but unless the Council has written permission from the current leaseholder, the Data Protection Act prevents us from providing this information to them.

Any requests for a pre-sale enquiry must be made in writing and a charge is made for the information that must be paid before the information is provided.

How should I report dumped rubbish?You should contact us to investigate your query, call 0800 137 111.

How do I report graffiti?You should contact us to investigate your query, call 0800 137 111.