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What is my service charge?
The service charge is payable by each property on the development and is used to contribute to the costs associated with the communal parts of the development. The service charge is paid annually and ensures that services provided to the development can be completed effectively and the development maintained.
The service charge to be paid is specific to each property, your service charge will be calculated based upon the specific requirements detailed within your property lease or transfer documentation. Depending on the specific services that you have access too or benefit from will be used to calculate how much you will need to contribute as your service charge.
All service charge funds collected by Hillcrest for your development are held in a specific client fund account, these funds are only used to pay for the services provided on your development.
Each year, our teams will produce a service charge budget, this will be issued to you along with a payment request. Included within the information will be a list of the services that your property benefits from and that you are paying towards.
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When is my service charge payment due?
Your service charge payments are due as detailed within your property lease or transfer. Commonly, you will be required to pay your Service charge either annually or twice a year or in monthly instalments.
Details of your service charge payment requirements will be detailed within the request for payment issued by Hillcrest, if you would like to discuss your payment options please get in touch with one of our customer support team, you can complete this form and the team will reach out to you with the information requested.**
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How is my service charge calculated?
Every year your property manager will produce an estimation of service charge for the development (the budget). The budget is calculated based on an estimate of the likely costs of providing the services required at the development. Common services provided for the developments managed by Hillcrest include but are not limited to:
- Cleaning maintenance of communal areas
- Landscape maintenance of communal areas
- Utility costs (lighting, heating, water) of communal areas
- Window cleaning – generally for apartments only, depending on the specific requirements for the development this may cover either communal windows only or all windows
- Lift maintenance
- Fire equipment maintenance
- Vehicle gate maintenance
- General repairs and maintenance
- Common area insurance – For apartment blocks, buildings insurance is usually required as part of the service charge payable. The lease will require a policy to be in place to cover the risks relevant to the development
- Banking Charges
- Reserve funds – these are monies collected relating to longer term projects such as redecoration, replacement of equipment etc
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I own a Freehold property do I pay a service charge?
It is becoming more common for freehold property owners to have to contribute towards a service charge for their property.
It used to be that local councils would adopt communal space on housing developments and undertake the maintenance of these areas on behalf of property owners.
Nowadays, this is not the case and companies such as Hillcrest are being appointed to undertake the management responsibilities for these areas. This ensures that the communal areas are maintained, and the development is managed as intended.
The transfer documentation for your property will detail the requirements for service charge payments for your property. As explained in the points above, your service charge will be calculated based only on the services that your property has the use of or benefit from.
As an example, if your property is part of a development that has a mix of houses and apartments, your service charge will be specific to the services providing benefit to the property. Maintenance of things like a lift, cleaning of the communal areas, buildings insurance etc would not be included within your service charge, however landscaping and street lighting would be included.
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Service charge accounts
As explained above the service charge budget is produced and a request for payment issued every year for the coming period. At the end of each financial year Hillcrest will produced a set of service charge accounts for the development.
The service charge accounts are usually produced within six months of the financial year end for the development. The accounts will detail all the expenditure that has been incurred within the service charge year, they will detail the expenditure for each of the services provided separately, in order to provide you with a transparent breakdown of the actual costs incurred.
Once produced the accounts will either show a surplus or a deficit for the year. If a surplus has been incurred, arrangements will be made to credit the balance due to you to your service charge account. Unfortunately, if a deficit has been incurred it may be necessary to issue you with a further payment request for your contribution towards the deficit amount.
The service charge accounts will be reviewed and certified by an independent firm of accountants.