Service charges
We regularly review the way we charge you for service charges that relate to the building you live in or the estate that your house or building is on. This section answers some of the commonly asked questions about service charges.
The information on this page deals primarily with day to day services charges. You can also find out more about Rechargeable works.
Payment for services that we provide and for work that we carry out
Under the conditions of your lease or transfer document, you must pay us service charges for services that we provide to the building you live in and to the estate that your building is on. You must also contribute towards our expenses in carrying out repair and maintenance work to your building and estate.
Poor quality services or repairs
If you are not happy with the standard of a service or repair, you should tell your housing office who will investigate the matter for you. If the service or repair is below a reasonable standard, we will try to put it right. The housing office will confirm this to home ownership services. Your service charge account will reflect the period when the particular service was below reasonable standards. This will only happen when the final account adjustments are carried out, normally each autumn. If the adjustments result in a credit balance to your account, you can apply for a refund from Home Ownership Services.
If we do not do a repair we will not charge you for it. If we do a repair badly, we will try to put it right and charge you for the repair in your service charge.
What if I do not feel I have received a service?
If there is an item on your service charge account that you have not received, you should tell your housing office who will investigate the matter. If the service in question has been temporarily stopped, the housing office will tell home ownership services and confirm the period concerned. Your account will be credited for the period when the particular service was not provided. This will only happen when the final account adjustments are carried out. We normally make final account adjustments in the autumn after the end of each financial year. At that time, if the adjustments result in a credit balance to your account, you can apply for a refund from home ownership services.
Why do I have to pay service charges when I do not believe I benefit?
The method for charging service charges is set out in the lease. The lease says that the cost of providing a service must be shared out between all the flats in the building that are defined in the lease. The method of sharing the cost is done by using the rateable value (see below) of your property compared to the rest of the building. Your charge is a fixed percentage of the cost of services or maintenance to the rest of your building and estate (if this applies).
This means that even if you live on the ground floor you must pay a share of the cost of providing the lift service to your building. This principle applies for all service charges.
- Ground-floor flats share the cost of roof and lift repairs.
- Middle-floor and upper-floor flats share the cost of repairs to the foundations.
- The cost of repairs to a window frame (even if this is not a window frame in your flat) is shared between all flats in the building.
- People who do not use the main front entrance (that is, they use a side entrance) still pay towards the cost of lighting the shared areas of the building that their flat is in.
How we work out your service charge
We work out the service charge in line with the method set out in your lease, using the rateable value of your home, block and estate (if this applies). A rateable value is a unit of value given to a property. The Inland Revenue fixed the rateable value, not us. Rateable values depend on a number of conditions but, usually, the larger the property the larger the rateable value.
The method used to work out your service charge
For the building that the flat is part of we divide the rateable value of your flat by the total rateable value of your building. We then multiply the result by the total annual cost of services and repairs to your building to get the charge for the flat.
The calculation is:
Property RV ÷ Block RV x Cost = Cost for your property
Below is an example of how we work out a block service charge.
- Your home has a rateable value of 150.
- Your block has a rateable value of 3000.
You will be responsible for paying 1/20th of the cost of the services provided to the whole block. For example, if repairs to the roof in your block cost £9000, you would pay £450 or 1/20th of the cost.
(150 ÷ 3000) x £9000 = £450 for your property
For the estate that the building is on:
We divide the rateable value of your property by the total rateable value of all buildings on your estate. We then multiply the result by the total annual cost of services and repairs to the estate to get the charge for your property.
(Some buildings on the estate are not included in the service charge. These are community halls, garages and any other building or space that is responsible for its own financing.)
The calculation is:
Property RV ÷ Estate RV x Cost = Cost for your property
Below is an example of how we work out an estate service charge.
If all the roads on your estate which are the responsibility of the housing department are repaired at a cost of £12,000 and:
- your home has a rateable value of 150; and
- your estate has a rateable value of 50,000;
The calculation is:
(150 ÷ 50000) x £12000 = £36 for your property
We add the building charge to the estate charge to reach a subtotal (we add a management fee to this). Finally, we add the insurance premium to reach the total annual service charge.
The management charge
We have to get back all our costs in managing your home. This includes things such as renting offices and paying staff their wages. Leaseholders and some freeholders should pay the cost of services such as sending out service-charge bills or dealing with your enquiries. Services for both tenants and leaseholders will be shared. You do not pay for services such as lettings, repairs to the inside of tenants' flats or housing benefit. Under the conditions of your lease, you must contribute to our costs of managing your home and estate by paying a service charge.
We currently work out the management charge at 10% of the total annual service charge, not including insurance.
The process used to work out your estimated and final account service charge
Your percentage of the service charge is based on an estimated charge of what we think we will spend on your block and estate during the year.
Estimated service charges
Every March, we will send service-charge account holders details of the estimated annual service charge for the new financial year. Our financial year runs from 1 April to 31 March. The account is debited every month on the first day of each month. The annual charge for ground rent is added to the first debit in April each year.
Please note that the statement you receive every six months does not show the whole of the yearly estimate by various charges.
Final accounts
At the end of the financial year, we prepare our final accounts. This can take some time to complete. The final accounts show what we have actually spent in the previous year. Generally, we apply the final accounts to each service-charge account about six months after the end of the financial year, once the accounts have been audited. We send you the following.
- A covering letter telling you about the final account and whether we owe you money or if you owe us money. If you owe us money, you must pay us within 28 days. In special circumstances, we may allow you to pay over a longer period if you cannot pay the amount you owe us all at once.
- A certified summary of service charges.
- A refund request form if we owe you money.
- A change of circumstances form so that you can tell us if any of your circumstances has changed.
If the estimated charge was too low, we will adjust the service-charge account adding the difference. If the estimated charge was too high, we will make a credit adjustment of the difference to the service-charge account.
You can claim the extra amount back, as long as your account is in credit, by sending a written request for the refund to home ownership services. See 'how can I claim a refund?'. You should remember that the service charge is debited every month and you will still have to pay service charges up to the end of the financial year in March.
If you pay your service charges every year for the following year, please remember that you will have a running credit on your account that reduces each month as the monthly charge is debited. If, as a result of the adjustment to the final account, there is a credit to the account, this will increase your credit. It is only the credit-adjustment amount that you should ask to be refunded to you, as the previous credit will be used to pay for your service charges that will continue to be debited every month up to the end of the financial year in March.
If the adjustment to the final account results in a debit amount being added to your account, you will have to pay this straight away. However, we currently allow you to pay within 28 days of the date of the final account (also known as the Certified Summary of Service Charges).
Sometimes, the amount that is due as a result of the adjustment to the final account can be high. If you face difficulty in paying the extra amount, please contact your housing office.
The statement that you receive every six months does not show the whole of the final account by various charges. It just shows the total difference between the estimated and actual amount.
Ways of paying your service charge
You can pay service charges every year or month for the following year or month. If you choose to pay every year, the service charge is due on 1 April. If you choose to pay every month, the service charge is due on the first day of each month.
You can now pay your service charge online.
By standing order You can pay your service charge by standing order through your bank. You can get standing-order forms from your housing office. You should fill in, sign and send the form to your bank with instructions that payment reaches your service-charge account by the first day of each month.
Payment line You can pay by credit or debit card on 0845 3000 328 (local call rates apply). Make sure you make a note of the reference number that you will be given. This will be your receipt. You can use this service between 8am and 6pm, Monday to Friday.
By cheque Cheques should be made payable to ‘London Borough of Lambeth’. Put your address and service-charge account number on the back of the cheque. You should send your cheque to Lambeth Revenue Services, PO Box 22003, London SW2 1WS. If you need a receipt for postal payments, please send a stamped, self-addressed envelope with your payment.
By swipe card If you cannot pay in any of these ways, you should contact your housing office to order a swipe card. When you receive this card, you can pay your service charge by presenting your swipe card together with your payment at any post office (post offices will accept cheques) or high street shop or retailer displaying the PayPoint 'PP' sign. You will be given a receipt for your payment.
In person You can pay by cash or cheque in person at:
Olive Morris House
18 Brixton Hill
Brixton
SW2 1RL.
The office is open from 9am to 4.15pm, Monday to Friday.
Claiming a refund
We send refund request forms to homeowners every autumn, after the final account adjustments are made to the service-charge account.
If there is a credit on your service-charge account, you may claim a refund by filling in and signing the refund request form and sending it to Home Ownership Services. See ‘Other useful addresses and phone numbers’
If you are a joint owner, each joint owner must sign the form. If you want to have the cheque paid into the bank account of only one of the owners, you must say so in the letter and each joint owner must sign agreeing to this.
If, at other times during the year, there is a credit on your service-charge account, for example, as a result of an overpayment, you should write to home ownership services asking for a refund.
We will only pay refunds to the person named in our records as the owner of the property concerned. So, if you are no longer the owner of the property, you should contact the new owner for any amount that they owe you.
If there has been a change of name for any other reason, we will only give a refund if we receive the appropriate documentary evidence of ownership. These could include a marriage certificate, a notice of transfer or notice of assignment, or a solicitors letter confirming that they are acting for the estate if the homeowner has died.
What if I do not have a bank account?
If you do not have a bank account and you have a credit on your service-charge account that you would like refunded to you, we will organise for you to receive a giro. You can then cash this at a post office.