Your Service Charges Explained

How are service charges calculated?
The lease allows for any reasonable method to be used for the apportionment of service charges and therefore some services are calculated per dwelling rather than on the bed-weighting method. An example of this would be Building Insurance and Front Entrance Door repairs.

Major works contracts may include work to the inside of tenanted dwellings, and where this is the case, the cost of these works is excluded from the major works service charge.

The calculation of most annual service charge headings are based on a ‘weighting’ method. This assumes that each property has four basic rooms – bathroom and toilet, kitchen, living room and hallway. We then add the number of bedrooms to come to a number of units for each property.

For example a one-bedroom property consists of five units, whilst a three bedroom property has seven ‘units’. Next, we total the number of units in the block – so a block with 5 two-bedroom and 5 three-bedroom properties would total 65 units – and divide this total into the cost of providing the services. This gives us the unit cost.

Finally, the unit cost is multiplied by the number of units for each individual property in order to reach the charge for that property. Consequently, the larger the property the higher the charge.

Service charges, estimated and actual bills
Home owners are required to pay a fair proportion of the cost of managing and maintaining their estate and the services the JMB and the council provide. Each years’ annual service charges are estimated based on the last financial year, which runs from the 1st April – 31st March. Estimated service charges are notified and invoiced in the February/March and the payment is due quarterly in advance starting 1st April.

Major Works estimated service charges are based on the contractual tender received and the JMB invoice these separately in order to facilitate various payment options outside of the terms of the lease (if applicable).

For annual service charges, every autumn the JMB calculates how much was actually spent providing services to your property and/or estate in the preceding financial year.  Major works service charges are calculated based on the actual amount spent on the contract.

If the amount is higher than estimated, you will be invoiced accordingly and must pay the difference within one month. If the amount is lower, the credit will be applied to your service charge account immediately.

Major works
Major Works comprise large items of work, such as repairs, refurbishment, replacement or renewals to the exterior and communal elements/services of the block and/or estate.

Where costs are expected to be higher than £250 per dwelling for an individual contract of works, there is a statutory consultation process where the JMB must notify both it’s intent and proposal to the affected leaseholders who will be expected to contribute by way of service charges. The consultation process is S20 of the Landlord and Tenant Act 1985 (as amended) and the Commonhold and Leasehold Reform Act 2002.

Major Works contracts are usually on site and/or have a defects period which last more than 18 months. Therefore, the JMB must notify leaseholders of costs incurred every 18 months until actualisation of the Major Works service charge in accordance with S20B of the Landlord and Tenant Act 1985 (as amended).

If you’re having trouble paying your service charge
If you are having problems paying your service charges, please contact the JMB immediately to discuss your situation and review your options.

If you’re not happy with service or charges
If you are not happy with a service you are receiving from the JMB you should contact us so we can put it right.

If the problem goes on longer than is reasonable you should record a complaint in a letter or e-mail. JMB staff should answer/ acknowledge the complaint.

If you don’t think you should be paying for a service because you didn’t receive it or the standard was not good enough you may want to ask for a rebate of some of your service charge. As the actual service charge bills are sent out a year after the close of the financial year the service was received then rebate request may relate to what was going on almost two years ago.

The only way to decide whether a rebate is reasonable is to review written records from that time, so we can only consider rebates if we received a formal complain about the service at the time.