What are service charges?
Service charges are an amount that residents pay to cover the cost of providing communal or shared services to a building and, if applicable, the surrounding estate. The way charges are calculated and what they cover are set out in your tenancy agreement. We are committed to providing all our customers with quality services and value for money.
Service charges can be fixed or variable and the type of service charge is then decided by the terms of your lease. Your tenancy agreement will give more information on your service charge, including whether you have a fixed or variable cost.
What are the different types of service charge costs?
Depending on your home and the services you receive, and any specific terms in your lease, you may be required to pay for one or more service charge elements.
What does 'actual costs' mean?
At the end of the financial year, we spend a few months reviewing all expenditure (the amount of money spent) for the services provided to each block and estate for the past 12 months. Once we have looked through this, we provide an end of year statement to each resident detailing the actual costs incurred.
The estimated service charge amount is also set out in this statement to show whether your service charge for that year is in surplus or in deficit (i.e. whether the estimate was higher or lower than the actual costs).
You only pay for the services that have been provided. We do, however, make a small charge for management and administration which is described on your service charge statement as the ‘Management Fee’. Please note: Guinness does not make a profit from service charges.
The final accounts are also reviewed by an independent accountant to confirm they are accurate.
What to do if my service charge is in surplus or deficit?
If your end of year statement shows your account is in surplus, this means that the amount you have paid towards your service charges for the year is more than the actual amount we spent and so money is due back to you.
- For customers that rent, there is no need to contact us, this is deducted from your service charge for the following year.
- If you are Homeowner, there is no need to contact us, this is deducted from your service charge for the following year.
If the end of year statement shows your account is in deficit, this means that the amount that you have paid towards your service charges for the year is less than the actual amount we spent.
- For customer that rent, these additional costs will be added to your charge for the following year, as per agreed in the terms of your tenancy agreement.
- If you are Homeowner, these costs will be added to your account for the following year. Alternatively, you can make a payment online at www.allpay.net or by calling us and using our automated payment line.
Explaining what specific terms mean on your service charge letter
Helping you understand your service charge letter
Please click on the box that relates to you – homeowner or tenant – below. This will take you through to your dedicate service charge letter webpage.
Answering your frequently asked questions
How do you work out service charges?
At the beginning of each financial year, we estimate the cost of communal services and charge you for your share of that estimate. These estimates are worked out using information from our contractors and by analysing past costs. For example, we estimate communal electricity consumption based on bills from the supplier over previous years.
When the service is provided under a regular contract (work carried out on a regular basis), such as grounds maintenance or cleaning shared areas, we know the annual cost of the contract in advance. We divide the estimated charge into equal regular payments, so you don’t have to pay the whole amount in one lump sum.
What are my privacy rights?
We take your privacy seriously. Any information that we collect and use in order to manage your rent account will be necessary for the performance of your contract with us. For more information as to how we use your information, including how you can make any request under Data Protection, please see our Privacy Notice page.
What are my rights and obligations?
As resident, you have a set of rights and obligations when it comes to paying service charge.
We have created a document that has also been sent to you via post, detailing what these rights and obligations are and what action you can take.
Why have I received a statement?
The service charge year operates in overlapping 18-month cycles. Before the year begins, we send an estimate to you of what we think the cost of providing services will be for the upcoming year. This estimate is based on what was spent in previous years, taking into account any increases or decreases due to changes in contracts or service requirements. Every accounting year (from April to March), we will ask you to make monthly or weekly contributions towards the estimated costs for managing, repairing, and providing services to the block or scheme that you live in. If your block is part of an estate, the estimate will also include estate costs. If your flat is connected to a district heating system, it could include heating/hot water costs.
At the end of the accounting year, we calculate the actual amount spent on each service, using invoices received from our service contractors, utility providers, managing agents and any other cost. Where appropriate, we ensure that independent examiners check the accounts and certify them. We then produce your Service Charge Year End Statement, which shows what costs we estimated, what the amount spent on your area was, what your share of that amount is and then the difference between them. This difference is applied to your account as an ‘actual charge’, also known as a year-end a surplus or deficit. This tells us whether any money is either owed to you by us or if you owe us money.
Reminder: We do NOT make a profit on service charges; they just pay for the services you receive.
I have been charged for a service but I have not received it, what should I do?
Firstly, please tell us you haven’t received the service and we will look into this for you.
If, for example, your grass hasn’t been cut as often as it should be, we will contact the contractor or member of staff to find out what has happened. If necessary, a credit note will be applied to your service charge account and once we know what has happened, we will get in touch. If you are owed this credit back, the amount will be credited to the account charges of your scheme or block and will be reflected in the following year’s service charges.
Do I pay for repairs for my building?
Yes, but only if they are for communal areas or chargeable services you receive. Some of these charges are included in the maintenance and service contracts, for things such as lifts and car park barriers.
Why am I paying more towards the service charge than my neighbour?
We make sure that the cost of providing a service are shared fairly between all the homes in your scheme or block. To work out your fair share, we look at what is called the ‘apportionment value’ of your home when compared to the rest of the scheme or block. The apportionment value can be worked out using different methods and these include:
- The number of homes in your scheme or block
- The number of bedrooms in your home
- The size of your home
If your home has a higher apportionment value than your neighbours’, you may pay proportionally more for the services we provide to your home. When we work out your apportioned service charge, we always review the amount to make sure we are being as fair as possible.
Why does my service charge include a cost for refuse collection when I already pay for this through my Council Tax?
Your Council Tax payment includes the cost of regular refuse collections. When bulky or abandoned waste can’t be disposed of through these normal collections, most local councils will do a special collection for things like old sofas, fridges or washing machines. They may do these bulky item collections for free when they are booked in advance by a resident.
We have a duty of care under health and safety regulations to keep areas, around your estate, clear of bulky or abandoned items. If we book the collections, we’re charged a fee because we’re a business rather than an individual resident. We encourage all residents to book bulk item collections directly with your local council to keep these charges as low as possible.
I am a homeowner and I live in a mixed block of flats where some flats are rented, and some flats are owner-occupied. Do I pay for the tenants’ works through my sinking fund?
No, you only pay the sinking fund contribution for your home.
I have credit on my Guinness account. Can I have this refunded to me?
We will refund you as long as there will be enough credit left on your account (after the refund) to cover your next payment.