Final accounts

When the financial year has ended, the actual costs incurred are calculated and audited independently at the Council. Once agreed, the costs relating to every building, estate or heating system that are rechargeable are calculated. Each leaseholder (and freeholder for some costs) share is then calculated and we will let you know your final account.

An adjustment reflecting the difference in estimated service charge, compared to your share of the final accounts, will be applied to your account. Details of how this has been calculated will be sent to you. You can view the accounts in more detail, and inspect the actual invoices if you wish.

The final account will be issued to you no later than 18 months after the costs have been incurred. You have the right to inspect the accounts for up to six months after the final accounts have been issued or until the end of the financial year, whichever period is the longer. You must request this in writing. After that date, there is no obligation to provide this information to you.

The final account summaries you receive meet the requirements of the legislation and the lease agreement. However, they may change over time if we can provide better or clearer information for you.

Service charge final account statement

Descriptions of work may appear on your service charge final account statement, as well as your contribution towards the costs incurred for your block or estate during the financial year.

Definitions of the service charge descriptions are sent with your final account statement, and of some of the other terminology used in the accounts.

The final account charges are individual to each property, and not everyone will have the same items listed in their accounts. It is unlikely that all items will be listed your final account statement.

How to read your service charge final account statement

The summary provides a breakdown by element of the costs related to your flat, separated into building, estate and other costs.

It identifies your property together with administrative and property references, and a note of your weighted room value. Weighted room values for each item of service charge are also shown. The amount due is calculated by taking the total expenditure figures, multiplying them by your flat’s weighted-room value, and then dividing that figure by the total weighted-room value for the block/sub-block/estate (each in turn as necessary).

The total expenditure for your block/sub-block/estate is then shown under the heading actual share scheme, followed by the share allocated to your flat under the heading actual property share. This is followed by the amount originally recharged to you as part of the estimates, and then the difference between your share of the actual costs and these estimated charges.

All of these amounts have been totalled so the overall difference between the estimated charges and your share of the actual costs incurred is shown. This is the amount that will be credited or debited to your account as the final account adjustment.

How your share is calculated

For most leaseholders, unless the lease agreement states a particular percentage share, the Council’s weighted-room formula is used to calculate the share of the costs rechargeable to each individual property. That formula allocates one weighted-room for each bedroom in the property, one for each general living-room/lounge, half a weighted-room for each bathroom, and half a weighted-room for each kitchen.

The total weighted-rooms for every flat within a block is then calculated, whether they are sold or not, and used to make a fraction showing each individual flat’s share. For instance, if there are a total of 40 weighted-rooms on a building, a three bedroom flat will have 5/40ths share of any costs relating to that building.

The same calculation is done with regard to any areas of a building (or block) that only serve some flats, rather than all flats in the building. Such an area is known as a sub-block, and only the flats served by that area will contribute towards its costs. For instance, only six flats may have access through a communal hallway which is separately defined by the lease agreement, so only their values will be added together to give a total weighted-rooms for that sub-block. If, in our example, this added to 30 weighted-rooms, the same three bedroom flat may be asked to contribute 5/30ths of costs to the sub-block.

Similarly, all estate-based areas have a total weighted-room value calculated by adding together all of the weighted-room values of all flats within the estate. If the building in the example is located in an estate and the total weighted-rooms for the estate add up to 150, the flat will be asked to contribute 5/150ths of the estate-based costs.

This formula is shown at the bottom of your summary, together with your property’s weighted-room value, entitled “Apportionment of costs”.

Note: Though houses are sold freehold, if they are located within any estate they may still be liable to contribute service charges towards the external areas they share usage of in common with other residents of the estate. However, they should not be charged buildings insurance premiums or ground rent.