Under the terms of the lease you are responsible for paying a proportion of the total costs for managing the building and its common parts. This is known as Service Charge, it is revised annually and is based on the known requirements of the development for the forthcoming year as well as the work that has been previously carried out on the development. These are usually paid quarterly but can be charged monthly or annually.
Service Charges cover your share of the cost of maintaining the building and development in which your property is situated. As a guide service charges usually cover all the costs associated with looking after the common parts of the building and development e.g. maintenance, electricity, cleaning, gardening and servicing of equipment such as the lift. A figure for buildings insurance is often also collected as part of the Service Charge. Ideally the Service Charge includes a contribution to a Sinking Fund which allows for major repairs and redecoration of the building and common parts. The Management Fee within your service charge is the fee payable to LIV Group Limited for arranging and managing all of these services on your behalf.
To pay your Service Charge and any other charges relating to your development please visit the Leaseholder Portal or call our Accounts Team on 0113 831 3300.
As leasehold is a form of tenancy, it is usually subject to a payment of Ground Rent to the Landlord. It is a specific requirement of the lease and must be paid on the due date, subject to the issue of the statutory demand of the Landlord or their agent at least 30 days before it is due.
The Ground Rent is usually a fixed amount and it may be payable annually, half yearly, or quarterly. The amount may be reviewed at a frequency set out in your lease.
A Sinking Fund is also known as a Reserve Fund, a contribution towards a sinking fund is usually built into the budget each year. This money is retained in an individual, interest bearing, trust account to build up a fund for future major repairs, renewals or replacements for example internal redecoration, roof repairs or lift replacement. A healthy sinking fund is essential to maintain the long term value of your asset and LIV Group Limited review contributions annually.
Service Charge Budget
The Service Charge budget is a forecast of the day-to-day running costs of the common parts of the building and is reviewed each year. The financial year is shown at the top of your budget and accounts.
In the weeks following the end of the financial year we will prepare service charge accounts which will identify the actual expenditure during the year and any surplus shortfall is then credited/charged to you. We do our best to produce as accurate an estimate as possible.
We will review the Service Charge Budget prior to the start of the financial year which relates to your development and we send out a new budget to you at this point, together with an invoice.
Balancing Charge and Balancing Credit
At the end of the service charge period a reconciliation of actual expenditure incurred, supported by invoices, is compared to the amount of service charge asked for in advance, as per the budget. Any variation between budgeted expenditure and actual expenditure being either a surplus or shortfall is then apportioned to each Leaseholder.
If there is a balancing charge, then this will be invoiced to you. If there is a balancing credit, this will be refunded to your account or in some circumstances the lease will provide for the surplus amount to be placed into a Sinking Fund for any future major works to your building.