Leaseholders Handbook

This is the money you pay towards the day-to-day running costs of your block of flats and maisonettes and any major works and improvements which have been carried out. If you live on an estate you will also be required to pay a proportion of estate costs. Your lease sets out your share of the costs for repairs, maintenance and services that we carry out.

Service charges will differ from one scheme to another and will depend on the layout of the estate, the type of property you have purchased and the terms of your lease. We are only able to charge for services and for repairs that are identified as our responsibility in the lease.

Leaseholders are not required to contribute towards the cost of services and repairs which are provided solely for the benefit of Council tenants in the building.

Resident Service Officers monitor the services that are provided on your scheme and visit regularly to ensure that the expected level of service is being provided.

What does a service charge cover?

There is no prescribed list of what services are provided by us as the landlord. The starting point in deciding if a particular charge is payable by the leaseholder should always be the terms of the written lease.

The 1985 Landlord and Tenant Act provided a definition of what could be included in a service charge. A service charge is defined as:

An amount payable by a relevant tenant of a dwelling as part of, or in addition to rent which is payable directly or indirectly for services, repairs, maintenance, improvement or insurance or the landlords costs of management and the whole or part of which varies or may vary according to the relevant costs. (sections 18-20 Landlord and Tenant Act 1985).

This is known as a variable service charge and the charges can vary each year depending on the works carried out to the block.

The Landlord and Tenant Act 1987, the Leasehold Reform, Housing and Urban Development Act 1993, the Housing Act 1996 and the Commonhold and Leasehold Reform Act 2002 extended this definition to include the cost of improvement works. Depending on the building, service charges may include the following items:

• caretaking services
• grounds maintenance e.g. grass cutting
• heating, lighting and cleaning of communal areas e.g. stairways
• centrally supplied heating and hot water systems
• communal TV aerial maintenance
• fire safety equipment
• laundry facilities
• door entry systems
• day to day repairs
• lift maintenance
• maintenance of shared gardens
• maintenance of boundary walls and fences
• management charge
• building insurance.

Leaseholders may refer to their estimated and actual service charge statements for an indication of the services their block of flats or property receives.

How the service charge is worked out

The service charge is calculated so that every leaseholder bears a fair share of the costs of providing each service in their block or property. This share is stated in your lease and cannot be altered.

Your percentage of any block costs is worked out from the floor-space of your property compared to the total floor-space of all the properties that make up the block. This means the larger the flat the more you contribute toward block costs.

Where your flat or property is on an estate shared by more than one block, you may also be liable to contribute toward costs relating to parts of the estate that do not form part of any one block but are enjoyed by all, for example the cost of maintaining a communal garden shared by two blocks. Your percentage of any such estate costs is calculated so each flat contributes equally toward estate costs.

Estimated service charges and actual charges

The service charge year is 1 April to 31 March each year. Estimated service charges are payable half yearly in advance on 1 April and 1 October. At the beginning of each financial year (in April), the Council will estimate the cost of the works and services that are expected to be provided and send a statement of anticipated expenditure to each leaseholder.

Service charge estimates are based upon an average of the three previous years’ actual costs.

Leaseholders will be sent a “summary of costs” within six months of the end of each financial year identifying the actual cost of maintaining their properties. The actual costs will be compared with the original estimate for the year and any difference between the two will be credited or debited to the service charge account. This is called the “balancing sum”

The “summary of costs” will also show the cost of any major works programmes carried out to your block or estate. Such major works will have previously been subject to the normal consultation procedures (see section 8 of this handbook for further information about paying for major works).

If your flat was bought from the Council under the Right to Buy Scheme within the last five years, you will have received a Section 125 Notice - “Notice of Purchase Price and Other Matters”. This document gives details of the purchase price and discount. It also lists the possible major works, which may be carried out during the first five years of your lease, and their estimated costs. Within that period, Kingston Council cannot charge you for those works more than the amount shown in your Section 125 Notice, plus an allowance for inflation.

Major repairs could include:

• roof repairs and replacement
• lift repairs
• window replacement
• decoration or maintenance of the exterior/ interior.

Administration and management charges and fees

The Council is a not for profit organisation but must cover the costs of managing the services it provides and the collection of ground rent and administering the service charges. This is known as the management charge.

The Council will also raise a one-off administration fee for matters that are not subject to a management charge, such as surveyors visits to properties to advise on improvement works you may wish to undertake, or if a fee is payable for a non standard service.

If exceptional costs have been incurred for enforcing individual leaseholders’ obligations the Council may also make additional charges.

Paying the service charge

For service charge payment methods please refer to the information on the invoice.

As a leaseholder, you have accepted the terms and obligations placed upon you by the lease and this includes your payment of the service charges when invoiced.

Non-payment of service charges is a breach of the lease. If you do not pay on time, arrears will be pursued by the Council. Unless an arrangement is made to repay the debt, legal action will be taken which may put your home at risk. Non-payment of service charges is also a breach of the mortgage agreement and we are obliged to inform your mortgage lender.

If you have any queries regarding your service charges please contact the Income Recovery Team. or by calling 020 8547 5468. If you are concerned that you might not be able to pay any of your service charges you must contact the Income Recovery Team immediately

Other agencies that may be able to assist you, including the Benefits Agency, are listed under Help and Advice in the Useful Contacts Section at the end of this handbook. To find out more about them, please contact the Customer Access Information line on 020 8547 5000 or the Housing Contact Centre on 020 8547 5003.

Ground rent

Most leaseholders pay £10 a year ground rent. This is invoiced half yearly in advance on 1 April and 1 October together with the estimated service charge. The annual ground rent is set out in your lease, and is fixed for the term.

Buildings insurance

The Council, on your behalf, arranges the building insurance cover for your property. The annual premium is included in your service charge. Each year an updated schedule of cover is sent out to leaseholders.

How to make a claim: Please contact the buildings insurance company Zurich Municipal directly by calling 0800 0261 841. For non-urgent incidents please call within normal office hours or Email: homeclaims@uk.zurich.com

It is important that you report a claim to the insurance company promptly and no more than 90 days after the incident occurred. If you delay reporting the incident the insurance company may refuse your claim.

Please see below for more detailed information on the cover included in the buildings insurance:

• Policy number: 10/006460/05500380
• Period of insurance: From noon 1 April to noon 1 April the following year
• Policyholder: You, the leaseholder
• Insured premises: The property
• Interested parties: The Council as freeholder of the building

Insured risks and excesses: (what’s covered by the policy) Your buildings are insured against loss or damage caused by the following major events: Fire, smoke, explosion, lightning, earthquake, riot, civil commotion, strikes, labour or political disturbances, malicious damage, collision by vehicles, aircraft or animals, storm or flood, escape of water from any fixed tank, falling trees or branches, theft or attempted theft, subsidence, ground heave, or landslip, leakage of oil from any fixed oil-fired installation, damage caused by falling television aerials or satellite dishes. Malicious damage, theft or attempted theft and escape of water from any fixed tank are not insured if the buildings have been unoccupied for more than 30 days.

Policy excesses: When claiming for accidental damage you must pay the first £50. When claiming for subsidence you must pay the first £1,000. These apply to each property for each and every loss. No excesses apply to other claims.

Benefits and limitations

(some benefits included are limited as follows):

Please note the above is a summary and is not an exhaustive list of items covered. For full details of your policy cover and all terms and conditions, please refer to the buildings insurance policy document. 

A policy booklet is sent out to new leaseholders. 

Sum Insured: This is property specific and reflects the cost of rebuilding the property as part of the building up to a cost of £350,000.

If there are any changes to the use or occupation of the leasehold property please contact the Insurance Team or call on 020 8770 5353 to notify them of this change. 

You will need to arrange your own contents insurance cover for your belongings. We operate a special scheme for Tenants and Leaseholders Contents Insurance. To find out more about this scheme please contact Finance Operations on 020 8547 5413.

We have more information on our website about Home Contents Insurance. 

Service charges calendar

We will write to you at least three times each year as follows: