Your guide to service charges

Service charges are made up of a number of different items which may include scheme staffing costs, communal heating and lighting, emergency alarm monitoring service, communal gardening, repairs, annual service contracts etc.

The specific items contained in the service charge accounts for individual properties/schemes are determined by the terms of the Lease agreement.

Johnnie Johnson Housing charges management fees that are reasonable having regard to the services provided.

The management fee is charged as one identifiable amount in the service charge budgets and accounts which are presented to our leaseholders and shared owner residents.

Here are a few examples of just some of the duties which are provided for within the management fee:

• Preparing and distributing service charge budgets/estimates
• Collecting service charges
• Providing information to auditors for the production of annual accounts
• Providing management and service charge information to residents
• Inspecting the property regularly to check condition and deal with any necessary repairs and health and safety checks
• Regular visits to supervise scheme managers
• Preparing specifications for minor works and services
• Carrying out consultation on management matters, major works and long term agreements
• Preparing specifications, obtaining tenders and supervising major works

The management fee included within the Service Charge Accounts covers the general cost of managing leasehold and shared ownership properties, and includes but not limited to managing day-to-day services such as cleaning, gardening, repairs, major work consultations and producing the service charge accounts. The management fee also includes but is not limited to a contribution of the general organisational running costs such as IT services and financial management.

In some circumstances it is necessary for Johnnie Johnson Housing to charge an additional administration charge for work that is not included in the service charge or management fee. This includes administering re-sales, providing duplicate sets of accounts and dealing with permissions under the Lease.

The following table shows Johnnie Johnson Housing Trust’s administration charges;

• Duplicate set of service charge accounts – £35 + VAT
• Provide copy Buildings Insurance Summary of Cover and/or certificate – no fee
• Landlord’s Reference for Mortgage Application/Tenancy – £20 + VAT
  Where a leaseholder or shared owner requires a Landlord’s reference as part of their mortgage application/tenancy application
•  Approval of a new mortgage – £25 + VAT
  Lender requires Landlord’s permission to a mortgage
• Refinancing (including Transfer of Equity if applicable) – £80 + VAT
  We are required to carry out an affordability check and risk assessment, approving the mortgage etc.
• Transfer of Equity (No mortgage in property) – £70 + VAT
• Receipting Notice of Charge or Transfer – £75 + VAT
• Home Improvement Request – £50 + VAT – basic permission fee plus cost of legal fees for obtaining a licence (currently £200 +VAT).
  If a maintenance surveyor inspection is required an additional fee of £100.00 + VAT will apply.
  The Lease will require the Leaseholder to seek the Landlord’s permission to carry out any structural or major alterations to their home.
  In order to ensure that the repair responsibility for such items as porches, conservatories etc. is passed to all future leaseholders for the specific property concerned, it is necessary to obtain a licence which is registered with the Land Registry.
  For some works, it will be necessary to send a maintenance surveyor to pre and/or post inspect. In this case an additional fee will be charged.
• Issue Notice Seeking Possession (NOSP) under Schedule 2 of Housing Act 1988 – £75 + VAT administration plus any additional legal fees incurred.
  Here the shared ownership lease allows the Landlord to recover the costs associated with the preparation and service of a NOSP for arrears of rent
• Issue of Notice of Forfeiture under Section 146 of The Law of Property Act 1925 – £75 + VAT administration plus any additional legal fees incurred.
  All residential leases allow the Landlord to recover the costs associated with the preparation and service of a S146 Notice for arrears of service charge or other breaches of the lease.
  Sellers Fee 1% of sale price if JJHT nominate a purchaser or
  £250 + VAT if sold via an Estate Agent.
  This is a charge to the Seller to cover the cost involved in the sale process including finding purchaser and/or handling enquiries from solicitors e.g. provision of Licence to Assign, service charge accounts, sinking fund calculations, etc.
  This charge will normally apply if JJHT are unable to nominate a purchaser and therefore the property is sold via an Estate Agent. It covers the cost of the Licence to Assign, responding to solicitor enquiries and providing information required as part of the conveyancing transaction e.g. service charge accounts, sinking fund balance, lease queries etc.
• Notice of Assignment/Transfer of ownership – £75 + VAT (Unless a fee is stated within the lease).
  This is where a property has been sold and the solicitor is notifying the Landlord of a change in ownership. It will also occur when a property is being transferred from single to joint/joint to single ownership or any new 100% Leaseholder by way of sale
• Response to Solicitor Enquiries – £250 + VAT.
  For 100% leaseholders – this charge covers the cost involved in responding to solicitors enquiries as part of the sale transaction.
• Provide copy Lease – £50 + VAT – at our discretion, but will likely be charged if we need to go to Land Registry for Lease
• Approval for Subletting – £75 + VAT – Where the lease allows subletting this normally requires the prior approval of the landlord for which a fee is payable.
• Lease Extensions – £250 + VAT – Where the outstanding term of a lease drops below 82 years, Leaseholders may want to extend it, as mortgage lenders often refuse prospective purchasers without a minimum of 80 years left on the lease.
• Staircasing – £100 + VAT – Leaseholders may want to purchase a bigger share of their property. Buying it 100% outright will entitle them to the freehold unless they are in a flat/apartment, in which case we keep the freehold and the service charge remains.
• Copies of Fire Risk Assessment – £60 + VAT