What are Service Charges?
On top of rent, some residents also pay a Service Charge. All residents should receive a schedule, giving details of the Service Charge that they are expected to pay and how it has been calculated. The rules for Tenants, Leaseholders and Shared Owners are different in some respects, and these differences are explained below.
Who pays a Service Charge?
Mostly Service Charges apply to flats with common areas, although some houses may also have a Service Charge if there are communal grounds. They cover things such as cleaning shared hallways, gardening of communal grounds, electricity for the lighting in communal areas etc.
Only those residents who benefit from a service have to pay a Service Charge. Normally the cost of the service is divided equally between all of the residents who benefit from the service.
Details of what is included and excluded from your Service Charge is given in the leaflet in the Download section.
How the Service Charge is calculated (Tenants)
Tamar operates a Fixed Service Charge for tenants. The Service Charge is calculated each year in the October prior to the rent increase. The Service Charge is calculated by taking the cost of providing the services for the preceding 12 months and adding inflation (CPI).
In this way, residents only pay for services that they have actually received, and Tamar is able to manage the service charge calculation in a straightforward way.
How the Service Charge is calculated (Leaseholders and Shared Owners)
The way that Leaseholders’ and Shared Owners’ Service Charges are calculated is set out in their lease. Generally, Tamar estimates how much the services will cost for the year and charges accordingly. At the end of the year Tamar calculates how much has been collected and how much has been spent for the estate.
If Tamar has collected too much, the residents receive a refund of the overpaid amount. If too little has been collected, the residents have to make up the shortfall.