A guide to Service Charges

What they are and why you have to pay them

Some tenancies will have service charges included in the rent. Others will have separate service charges that are charged at the same time as the rent. Both the rent and any service charge must be paid on the day it is due.

Service charges cover a wide range of items that relate to specific properties. Service charges could be set for things like lift maintenance, communal area cleaning, sewerage charges and external maintenance works. Not everyone will have service charges; it will depend on your property. Details about your service charges can be found in your tenancy agreement, updated with letters and notices that we may have issued since the tenancy started.

You must pay your service charges just like your rent. We do not collect these separately and expect our customers to pay their full rent and full service charge together on the day it is due. Failure to do so will result in similar recovery actions we would take if you did not pay your rent.

Your charges will vary according to the services you receive. Our customers pay a variable service charge which means that each year we will give you an estimate of what we think the cost will be for providing these services.

At the end of the year we work out the actual costs and send you a statement showing how this compares to the previous estimate. If the amount is higher than the estimate we will either carry this forward so that it is paid with future charges or ask you to pay the difference at the time. If it is lower we will carry this forward and take off the charge for the following year or refund you depending on the terms of your lease.

Generally, we will charge you for each financial year from 1st April but this will be confirmed in your lease. We will let you know the estimated charge for the year ahead at least one month before the charge changes and will send you a statement six months after the end of each financial year, letting you know how much we have spent on services provided to you.

In some cases a management company may provide services. Where this happens we generally pay their invoice and then pass this cost on to you. This might be called ‘Third Party Service Charge Managing Agent Fee’ or ‘estate management cost’. Your lease will give you more information about any management companies who are involved in providing services where you live.

If you think you are paying an unreasonable amount for your service charge you have the right to challenge this. In the first instance please speak to you home ownership officer to discuss your concerns.

You can ask us for copies of accounts, receipts and other supporting evidence which relate to the collection and administration of the service charge account for your home. We may make a reasonable charge for this service.

If a customer is going to be charged more than £100 per year for an individual service contract such as grounds maintenance, we will carry out a Section 20 consultation with all affected customers. This is a legal requirement. 

Below are some examples of what we include in your service charge. If you would like to know more, please contact the service charge team on 0333 400 8231 or email servicecharges@aster.co.uk.

No. Service charges differ from one area to another and can even differ between neighbours. The type of home you live in and the terms of your lease or tenancy agreement will determine what service charge you pay.

No. Service charges differ from one area to another and can even differ between neighbours. The type of home you live in and the terms of your lease or tenancy agreement will determine what service charge you pay.

Each year we will give you an estimate of what we think the cost will be for providing our services and this will be the amount that you will be charged. These estimates are calculated by the departments that provide your services, including our asset management and maintenance teams and independent living team. The service charge team set the estimated charges for communal utilities and third-party service charges.

At the end of the year, we calculate what was actually spent on the services paid for by your service charges. This may be higher or lower than we estimated. The difference between the estimated and the actual costs is then carried forward to your service charge budget for the next year.

If your lease does not allow us to do this, you will be asked to pay the difference if the cost was higher than estimated, or we will refund the difference if the actual amount was lower than estimated.

You will receive a service charge statement each year that will detail how the difference will be applied to your account.

Generally, we will charge you for each financial year – 1 April to 31 March – but this will be confirmed in your lease. We will let you know the estimated charge for the year ahead at least one month before the charge changes.

 

Your service charge may include the following:

  • Communal cleaning
  • Communal lighting
  • Communal water
  • Door entry system
  • Fire alarm system
  • Grounds maintenance
  • Insurance for the lift in your building (if you have one)
  • TV aerial (if there is a communal system)
  • Sinking fund.

A comprehensive list of what may be included in your service charges and an explanation of what each item is can be found in our Guide to Service Charges.

Sinking funds or ‘reserve funds’ are used to collect money to pay for major items that need to be replaced or maintained and are charged to leaseholders. Your lease will explain whether or not a sinking fund can be put in place and what it can be used for.

The sinking fund applies to the property and not to the owner. If you decide to sell your home any payments you have made will stay in the fund.

Yes – these can be supplied to customers on request, so please get in touch with the service charge team if you would like to receive a full breakdown by phoning our contact centre on 0333 400 8222.

Yes, all customer have the legal right to inspect accounts, receipts and other supporting evidence relating to the collection and administration of service charge accounts. This request can only be made at the end of the financial year and must be made within six months of you receiving your service charge statement. Please contact the service chage team on  Servicecharges@aster.co.uk or call our contact centre on 0333 400 8222.

 

The type of property you live in is irrelevant – if you live near a piece of communal land that we own and maintain, you may need to pay a service charge towards its upkeep.

There could be a variety of reasons – you and your neighbour could live in homes which are of different tenures (e.g. you may be a renting your home, while your neighbour could be a leaseholder). Also, the period your service charges are calculated over may be different – some customers pay over 48 weeks and some over 52, depending on the terms of their tenancy. If you do have any concerns, please contact the service charge team.

If we introduce a service charge, we need to give you a minimum of 30 days’ notice before we can start applying this charge. We may introduce service charges if we begin providing a new service, or if we are providing you with a service that you should have been charged for previously but have historically received for free.

In some instances, private owners may have to pay a service charge. You may be required to pay if you live close to land that we own and maintain. There should be a clause in the title deeds for your property outlining that you have to pay a service charge if this is the case.

Our Guide to service charges provides some information as to whether individual charges might be eligible to be covered by housing benefit. You can also obtain further information about eligible and ineligible charges from your local authority and the department of working pensions.

If you are having any difficulties paying the adjusted amount, please contact your local customer accounts team and they will be able to advise you on possible payment arrangements.

How to pay your rent

OPTIONS AND METHODS AVAILABLE

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How your rent is charged

WHEN IS RENT CHARGED AND WHEN YOU HAVE TO PAY

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Annual rent changes

WHEN AND WHY RENTS ARE CHANGED

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Service charges

WHAT THEY ARE AND WHY YOU HAVE TO PAY THEM

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It’s good to talk

WHEN AND HOW TO CONTACT OUR ACCOUNT TEAMS

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What happens if I don’t pay?

A BRIEF GUIDE TO OUR RENT COLLECTION PROCESS

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The Rental Exchange

SHARING YOUR PAYMENT DATA TO GET YOU BETTER DEALS

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Home Contents Insurance

INFORMATION ABOUT GETTING INSURANCE COVER

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