Maintenance and Service Charges

If you own an apartment, you will be responsible for paying a service fee and maintenance charge for the upkeep of communal areas, for shared services and for any repairs that may be needed. Each apartment owner will be assigned a proportion of these charges, usually dependent on the size of their flat. Charges may include some or all of the following:

General maintenance
Lighting in communal areas and grounds
Cleaning, decoration and maintenance of communal areas and buildings
Membership and upkeep of communal facilities such as a health club, gym or swimming pool
Use of private gardens (especially in London)
Caretakers, concierges or porters
Garden maintenance
Buildings insurance
Heating and hot water
Water supply for gardens and communal areas
Lift maintenance
Entry phone and security
Pest control
Administration
Sink fund for major repairs

Although buildings insurance should be provided by the freeholder, you will be required to have third party insurance for any damage you may cause to other apartments, for example, from a flood or fire.

Always check the level of service charges and any other costs before buying an apartment; if you're buying from a former owner, ask to see a copy of the service charges for previous years. Fees can vary considerably and luxury developments with a high level of amenities may cost upwards of £5,000 a year. Apartment blocks managed and maintained by a management company are likely to have higher service charges than those without; however, this may be offset by the fact that the building may be maintained to a higher standard. This is an important point to remember - the value of an apartment depends to a large extent on how well the development is maintained and managed.

However, sometimes apartment owners may feel that service charges are excessive; if so, they can bring their dispute to a Leasehold Valuation Tribunal (LVT). This consists of three members: a lawyer who is often the chairman, a valuer and a lay person. It is entirely independent and impartial in its approach. The LVT hears both sides of the argument and then determines the issue on the basis of the evidence and the judgement and experience of the LVT members. They can determine the reasonableness of a service charge, resolve disputes involving insurance and can also make certain decisions relating to the right to manage.

High service charges aren't necessarily bad, as long as they give you value for money and the development is well managed and maintained.

From time to time, owners may be charged additional fees to make up for any shortfall of funds for maintenance or repairs. It is therefore essential to check how much money is in the sink or reserve fund for repairs and to see whether any major maintenance or capital expense is planned for which you could be charged.

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