The annual service charge (maintenance fee) is established on an annual cycle between 1st September and 31st August to coincide with the academic year.
A budget is set before the start of each budget year and the ‘on account’ charges are established as quarterly payments (in advance) from this total budget.
Note: The individual long leases sometimes stipulate that the On account service charges shall be payable by the leaseholder either annually in advance or, monthly in advance – for ease of administration, we operate all on account payments ‘quarterly in advance’ i.e. The payments are due 1st September, 1st December, 1st March and 1st June each year for the quarterly period ahead.
Note: The property managing agent is under a duty to all leaseholders to collect the service charges from each leaseholder in a timely manner so that the appointment and payment of maintenance suppliers is not delayed and building services are fully maintained. Credit control procedures are in place to collect any unpaid service charges which will include escalation through a series of notices and referral to solicitors for formal legal action for breach of any long lease terms.
At the end of each budget year, an account reconciliation is carried out to determine if there has been an under-spend or over-spend of funds during the year. In the event of overspend, each leaseholder will be required to add additional funds by way of a ‘balancing charge’. In the event of an account underspend, each investor will receive a ‘balancing credit’ to their account (unless it is deemed suitable to allocate the underspent amount to reserves or, sinking fund).