Rent, ground rent and service charges

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Rent, ground rent and service charges 56

Rent If you own a shared ownership property, you will pay rent on the part of your home that we own. This money from you helps us repay the money we borrowed to buy your home in the first place. It does not cover any services. Please remember that your rent amount will be reviewed on an annual basis. The way we carry out this annual review is explained in your lease.

Ground rent If you are a leaseholder or shared owner living in a flat or apartment, you might have to pay ground rent. Ground rent is the rent you pay for the piece of land that your flat or house is built on. It is usually a small amount – around £100 or £200 a year. Details of how much your ground rent is, and how often you need to pay it are set out in your lease. We will send you an invoice each time you need to make a payment.

Service charges Service charges are payments you make to us for all of the services that we or a management company provides (such as communal cleaning and general maintenance of your communal surroundings). Service charges will differ from one area to another; they will depend on the layout of your neighbourhood, the type of home you have bought and the terms of your lease. We can only charge for services that are specified in your lease, unless you agree to extra services being provided. All of our leaseholders pay a ‘variable service charge’. This means that each year we will give you an estimate of what we think the cost will be for providing our services. This will be the amount that we charge you for that year. At the end of the year, we calculate what we have actually spent on providing these services. If this amount is higher than the estimate, we will ask you to pay us the difference. If

Generally, we will charge you for each financial year (1 April – 31 March), but this will be confirmed in your lease. Legally, we have to send you a statement six months after the financial year to tell you how much we have spent on services. We will also let you know the estimated charge for the year ahead, at least one month before the charge changes. In some cases, a management company may provide these services. We will pay their invoice and then pass this cost on to you. If you think you are paying an unreasonable amount for your service charge, you have the right to challenge this. In the first instance, please contact your leasehold services officer to discuss your concerns. If you are still not happy, you have the right to make an application through the Leasehold Valuation Tribunal who will be able to determine whether the costs are reasonable. Details of your local Leasehold Valuation Tribunal are listed in the ‘Contacts’ section.

Rent, ground rent and service charges

the actual amount is lower, we will either carry forward the amount (and take it off the charge for the following year) or refund you the difference.

List of services you may receive This section provides you with a list of services you may receive from us that are included in your service charge.

Audit fee This is the cost we pay for an independent chartered accountant to check the process we use to calculate your service charge costs.

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Rent, ground rent and service charges

Communal cleaning The cost for cleaning the shared parts of your building. If a block contains fewer than four flats we will not usually set up a cleaning contract. The residents will be responsible for making sure the shared areas are kept clean. We will regularly check these areas to make sure they are being kept to an appropriate standard. If you would like a copy of the cleaning specification for your block of flats, please contact your leasehold services officer.

Communal lighting The cost of providing lighting to the shared parts (inside and outside) of the building.

Communal water The cost for water supplied from a tap (either inside or outside) in the shared parts of your building.

Door entry and security Some blocks of flats have a controlled door entry system. To keep this working correctly it must be serviced and maintained regularly. This cost is for regular servicing by a qualified engineer and for any repairs to the door entry system.

Fire alarm

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Some blocks of flats have fire protection equipment such as fire alarms, emergency lighting or smoke vents. To make sure this equipment is working correctly it must be serviced and maintained regularly. This cost is for regular servicing by a qualified engineer and for any repairs to fire protection equipment.

The cost for maintaining the outside grounds of the building. If you would like a copy of the grounds maintenance specification or a copy of the map(s) which apply to your home, please contact your leasehold services officer.

Heating and hot water The cost for the heating and hot water used in the shared parts of the building.

Insurance The cost of insuring your building. Under the terms of your lease, we have to provide buildings insurance. It offers cover for the structure of the building.

Lift Some blocks of flats have a lift. To make sure they are working correctly we have to have it maintained and serviced regularly, and this is what you will be charged for.

Rent, ground rent and service charges

Grounds maintenance

Management fee A contribution towards the cost for the time and resources taken in preparing and administering the service charge account.

Private heating The cost for heating in your home where the electricity used is from the communal supply in the building. 59

Rent, ground rent and service charges

Refuse The cost of collecting rubbish from your home or for the supply of bins where the service is not provided by the local authority. The cost will be your share of the total cost of the collection service.

Scheme manager costs The cost of providing a caretaking service to your block.

TV aerial Some blocks of flats have a communal television aerial or satellite dish. If this equipment is provided, it must be serviced and maintained regularly. This cost is for regular servicing by a qualified engineer and for any repairs to the television aerial or satellite dish.

Sinking funds ‘Sinking funds’ or ‘reserve funds’ pay for any items that may need replacing, renewing, maintaining, improving or redecorating in the future. Your lease will explain whether you will need to pay this. We will collect an annual amount from you, which will be based on the estimated cost of the work when it needs to be carried out. For example, if redecoration is needed, we will work out the likely cost of the redecoration and when it needs doing. The estimated cost will be spread over the time period we have to collect a fund. When the time comes to carry out the work, we will use this money to cover the cost. If we have not collected enough money to cover the cost, we will charge you the extra amount. If there is too much money, we will keep this in the fund for future work. Your lease explains the terms for this.

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Other fees We may also charge you for administration fees on other items. For example, we will charge an administration fee for: • providing a copy of your lease • responding to solicitor enquiries, and • granting permission for improvements. Details of these charges are available from your leasehold services officer or on our websites.

Ways to pay We offer a variety of ways to pay rent and other charges including:

Rent, ground rent and service charges

If you pay into a sinking fund, you will receive a statement each year telling you what the fund amount is and your contributions towards it. Please remember that the sinking fund applies to the property and not to the owner. If you decide to sell your home, any payments you have made will stay in the fund.

• by direct debit • by phone (you will need a payment card to do this) • online (you will need a payment card to do this) • by post (send a cheque or postal order to your housing association) • in person (some offices have payment machines), or • by payment card. Please speak to your leasehold services officer who will be able to help you choose the best payment method for you. 61

Rent, ground rent and service charges

What to do if you are struggling to pay If you are struggling to pay your rent and other charges, please contact your leasehold services officer as soon as possible. We can talk to you in complete confidence, offer support and direct you to other agencies who may be able to help. We can often work with you to overcome financial problems before they get out of control. For example, we may be able to come to an agreement for you to pay any outstanding amount over a set period of time. We may also be able to tell you about any benefits you are entitled to - if you are a shared owner you may be entitled to receive Housing Benefit. You should also speak to your mortgage lender as they might be able to help you. They may offer you a mortgage payment break or allow you to change to interest only payments for a set period of time. In severe cases, you might have to consider selling your home. If you meet certain criteria, you might be able to consider ‘reverse staircasing’ (where we buy back shares of your home from you). In cases like this, it is important that you seek independent legal advice. Other organisations that could offer support and guidance are listed in the ‘Contacts’ section.

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