Annual Budgeting

As the cost of upkeep of your property is met by you and your fellow lessees there will only be a certain amount of income per annum. This is normally divided equally amongst all lessees. It will need to be of sufficient amount to cover planned expenditure for the year to come, to take into account extra unforeseen items and to cover major pre-planned exceptional items such as external decorating. These latter items may be items that will not take place for several years. Rather than pay for them in one year it is prudent to save by way of a Reserve or Sinking Fund.

 

We will, therefore, in agreement with you agree an annual service charge level to reflect your needs and circumstances. We will make a service charge recommendation but the final decision as to how much each lessee will be charged will rest with you.

 

You and your fellow lessees can help keep the cost of the service charge to a minimum by avoiding unnecessary expenditure. Good communication will help improve the management of your property. This will ensure that funds are used for their intended purpose rather than wasted on unnecessary expenses. Areas where service charge funds are frequently wasted are:

 

-         Undue delays in the notification of the need of repairs,

-         Ensuring that all service charges are paid promptly at all times,

-         Ensuring that items such as lifts, communal phones etc are treated properly and with care,

-         Taking collective responsibility for the common parts of your properties and not allowing them to be misused. An example of this is bin areas being used for the disposal of freezers and refrigerators. Their removal will attract a council charge,

-         Making claims on buildings insurance because insufficient care has not been exercised e.g. in relation to leaks of taps, wastes and roofs.

 

 
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