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Your service charges explained

Making sense of service charge

We are introducing some changes to our service charge system and processes, making them clearer, easier to understand and service costs more transparent. These changes will be introduced from February 2018.

What is changing? | The service charge annual cycle | Property groupings | Statements | How will my share of service costs be calculated? | Further information | Paying your service charge on time | Find out more about service charges  

What is changing? 

  • The way we categorise and then group, our estates, buildings and homes is changing. These new groupings will ensure we have a consistent approach to asset and financial management across all our properties.
  • Service charge statements will provide greater visibility on the charges and costs residents have to pay. The statements will continue to be itemised but will be separated under the new groupings, making it clearer and easier to understand.
  • Our new Property Managers will be the eyes and ears on our estates making sure services are delivered and keeping accurate records. 

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The service charge annual cycle 

Service charge estimates are sent out between January to March each year, statements for the previous year are sent out by the end of September and estimated charges for the following year are prepared between October and December. 

Take a look at our handy infographic for more information. 

 

 

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Property groupings

The new categories will provide a clearer structure for how our properties are grouped together and will clearly identify the services that fall under each category.

You may see the same services in the different groupings; this is not a duplication as services could be assigned to a number of groups, for example, responsive communal repairs. Click on the image to enlarge.

Property

An individual property with a single occupancy agreement (lease, tenancy, freehold).

Services include: Insurance, management charges.

Sub-bloc

A sub-section of a building that is segregated either physically or by service from another part of the building.

Services include: Responsive communal repairs, lift servicing, compliance (eg Fire Risk Assessment and legionella). 

Block 

A building that contains a number of homes across which shared services can be collectively charged.

Services include: Responsive communal repairs, lift servicing, compliance (eg Fire Risk Assessment and legionella). 

Group 

A number of blocks or stand-alone homes that receive a shared service. 

Services include: Caretaking staff, grounds maintenance, play areas. 

Estates 

Multiple blocks in a defined area where shared services are provided to communal spaces. 

Services include: Ground maintenance, estate lighting, cleaning costs, CCTV. 

Area 

A number of estates where a shared service is provided. 

Services included: CCTV. 

Our new Property Managers will be the eyes and ears on our estates making sure services are delivered and accurate records are kept. They will monitor service standards in communal areas, (cleaning, gardening, communal repairs, health and safety) and will report back to our Service Charge Team. You can learn more about Property Managers by watching our short film

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Statements

From February 2018, your service charge statements will look different. The services you receive will be itemised and divided under the new groupings, with a column for the total costs and a column for your share of the costs. This simplified layout will provide greater visibility on the charges and costs that you have to pay.

Click on the statement image view full size. 

How will my share of service costs be calculated?

Your service charge is made up of all the services you will receive under the new groupings. In some cases the new groupings may result in a change to the way we present costs to residents. Below are two examples that show the changes we have made.

Example 1: Bill for block cleaning for £10,000 

 

 

Old method

  • 4 leaseholders - Costs = £4000/Charge = £1000 each
  • 6 tenants - Costs = £6000/Charge = £1000 each

New method

  • 10 residents - Costs = £10000/Charge = £1000 each 

Example 2: New groupings for groups maintenance 

 

Old groupings

  • Block 1 - 5 properties - Total = £5000/Charge = £1000
  • Block 2 - 5 properties - Total = £5000/Charge = £1000
  • Block 3 - 5 properties - Total = £5000/Charge = £1000 

New groupings 

  • Estate - 15 properties - Total = £15000/Charge = £1000 

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Further information 

 Read on for answers to some of the most frequently asked questions about service charges. 

  • What is a service charge?

    A service charge is a payment made by a tenant or homeowner towards the cost of services and repairs beyond those specifically for their house or flat. For example, if you live in a block of flats with a communal garden, the cost of maintaining that garden is covered by a service charge because it is available to all residents as a communal service and it is outside of their flats.

  • What services are covered by a service charge?

    As a landlord, we are obliged to provide you with certain services and repairs, which we then charge on to the residents who received the service.

    The exact services you pay for will be set out in your tenancy agreement or lease, but could include:

      • Employing a caretaker
      • Cleaning communal areas, including cleaning windows and removing dumped rubbish
      • Gardening and grounds maintenance
      • Repairs to communal facilities such as door entry systems, television aerials and lighting
      • Lift maintenance and repairs
      • Providing fire-fighting equipment, including repairing and testing emergency lighting and smoke alarms
      • Providing water, electricity and gas supplies to communal areas
      • Insurance for blocks of flats and houses (usually homeowners)
      • Health and safety such as fire safety, legionella, asbestos and electrical testing in communal areas.
  • Am I tenant or a homeowner?

    Tenants are residents, who rent their homes from Hyde under a tenancy agreement. Types of tenure include secure and assured tenancies, starter tenancies, market rent and affordable rent tenures.

    Homeowners are residents, who wholly or partly own their own homes, under a lease. These can include leaseholders, freeholders and shared owners as well as residents who have bought under the Right to Buy, Right to Acquire and Shared Ownership schemes.

  • What is a deficit / surplus?

    An estimated service charge is prepared before the start of each financial year and the amount you pay during the year is based on this estimated charge. At the end of the financial year we check the amount residents have paid and the actual cost of providing services and repairs to your block / estate to calculate if there has been a deficit or surplus.

    A deficit / overspend on your service charge statement is where we have spent more on providing the services than we charged you.

    A surplus / underspend on your service charge statement is where we have spent less on providing the services than we have charged you.

 

Service charge booklets

Payment of your rent and service charge must be a priority and be on the top of your list of outgoings. Please read more on our Paying on time page. 

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Find out more about service charges 

If you have a specific query, please fill in our online service charge enquiry form

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