Making the Service Charge More than a Dirty Word

The service charge famously has the potential to be a sore spot in the tenant-landlord relationship. You don’t have to go far to hear stories of discontented tenants being overcharged and feeling they aren’t getting their money’s worth.

For the honest and well intentioned landlord, the service charge can feel like an uphill battle; tenants may resent the amount they are paying (or the fact they are paying it at all), whilst you need the money just to take proper care of their block!

You’ll already be aware of the many ways in which service charges can be used. There are those with tangible benefits for tenants, for example;

  • Cleaning of communal areas and windows.
  • Grounds upkeep, such as grass-cutting and gardening.
  • General repairs and maintenance, such as maintenance of communal heating systems.

Seeing the lift being serviced periodically and the windows being kept clean, residents can visualise and understand the money they’ve paid being put to use. There are however a number of important aspects of the service charge that may not be anticipated by residents for example;

  • Bank and accountancy charges.
  • Redecoration fund- this will of course be put to practical use, but it may not produce immediate effects tenants can see.
  • Building/property owners insurance (although this may be paid separately).

Residents may feel that these types of costs are not benefitting them directly, especially as there are no tangible results for them, and this can lead to tensions with the validity of the service charge being questioned.

The good news is that from what Eco Matters have seen through working with block managers, we believe the service charge can actually be an opportunity to improve relations between you and your residents. First of all, it’s a brilliant way to demonstrate transparency. Legally they are entitled to the accounts and receipts that detail what their service charge is being spent on, so being very overt with your tenants about expenditure is crucial. Where increases to standard service charge are necessary, simply taking the time to let your tenants know exactly what this is required for and why will reassure them that their money is being well spent.

Moreover, sometimes the service charge may be required for work which will save them money in the long run. Tenants may be reluctant to shell out an extra £300 for large scale improvements to be made to the property, and rightly so - if however they understand that the work will reduce their bills and therefore end up saving them money, they will no doubt be more enthusiastic.

At the end of the day, although it may not always be apparent, the point of service charge is that it is required to keep your properties running as smoothly as possible for your tenants. We’ve seen first hand the massive improvements that can be made to residents lives through improvements, such as more comfortable living and reduced bills. From an environmental perspective, we tend to get pretty excited about things such as increased energy efficiency and alleviating fuel poverty, but that’s just us!

Of course, improving your property doesn’t always induce a service charge; for instance, the insulation work we do is often covered entirely by government funding. For the most part however, service charge is necessary- but that doesn’t mean it has to be a dirty word!

Who are ECO Matters? What works can we organise?

Set up five years ago, Eco Matters is a Sussex based company that provides insulation to residential blocks of flats. In company’s founder Peter Dunsby’s own words, ‘I wanted to make a difference and do whatever I could to combat climate change. We fell into working on flats by accident, now it’s what we do day in day out… if we can save people living in flats money on their heating bills then we think that’s great!’

In these five years, we have organised insulation for from Glasgow to Plymouth and Eastbourne and nearly everywhere in between. We look at a block of flats, we work out the best options to improve the insulation or to make the heating system better, and then we work out what grants there are to help meet the cost. Sometimes we can do work for free, sometimes we get a grant for work that has to happen anyway, like renewing a flat roof to save energy and reduce condensation in apartments.

Eco Matters can either fit or can organise cavity wall insulation, flat roof insulation, loft insulation, external or internal wall insulation and underfloor insulation (for example for garages below flats or undercrofts) for blocks of residential flats. We can also assist with communal heating system upgrades and switches from electric heating to a renewable based heating system.

Contact: 0800 001 4943

Email: info@ecomatters.org.uk

Website:  www.ecomatters.org.uk

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