Working together with our clients, we prepare a budget for the service charge year that is usually based on the historic expenditure and the envisaged expenses for the upcoming year. We may also agree to include a reserve/sinking fund depending on the nature of the property that would be based on a long term maintenance plan to allow for a larger scale project such as a roof replacement to be collected over a period of time to ensure leaseholders do not get a large one off bill when a roof needs replacing but rather the funds will have been collected over several year in preparation for this eventuality to ensure there are no nasty surprises
Service charges are paid every 3, 6 or 12 months as per the terms of the lease and a forecast is usually distributed 1 month before the year end for the next financial year. Whilst the leases may be strict on the payment dates, we do have a facility to allow leaseholders to spread the payment at no additional cost by way of a direct debit scheme however this is at the discretion of our instructing client.
At the end of the financial year, we aim to have the service charge accounts (audited by and independent auditor) circulated within 4 months and if a surplus/shortfall is apparent, we advise lessees accordingly.
Along with this we have strict processes and procedures for the collection of the service charges to ensure that payments are made on time. We work closely with debt collection agencies and solicitors to ensure service charge & ground rents are received on the due date as per the terms of the lease in order to provide services required to the property without having to experience cash-flow difficulties due to lessees failing to settle their service charges.