Maintenance and Repairs
A significant portion of service charges goes towards maintaining the building and dealing with repairs. This might include things like fixing roof issues, repairing communal areas, or addressing general wear and tear.
Regular maintenance helps prevent small issues from becoming expensive problems later on.
Cleaning and Grounds Maintenance
If your building has communal hallways, staircases, lifts, or outdoor areas, these need regular cleaning and upkeep. Service charges usually cover:
- Communal cleaning
- Gardening and landscaping
- Window cleaning
- Bin store maintenance
These services help keep the building safe, tidy, and pleasant to live in.
Buildings Insurance
Most leasehold properties have a block insurance policy that covers the structure of the building. This is usually arranged on behalf of all leaseholders and paid for through the service charge.
This ensures the building is protected in case of major damage or unexpected events.
Utilities for Communal Areas
Shared spaces often require electricity and sometimes water. Service charges typically cover:
- Communal lighting
- Power for lifts
- Door entry systems
- External lighting
These everyday running costs are essential but often go unnoticed.
Managing Agent Fees
If a managing agent is appointed, part of the service charge will go towards professional management.
This usually includes:
- Organising repairs and maintenance
- Managing contractors
- Collecting service charges
- Preparing accounts and budgets
- Ensuring compliance requirements are met
A good managing agent helps keep everything running smoothly behind the scenes.
Reserve or Sinking Funds
Some buildings collect money into a reserve fund. This is savings set aside for larger future works, such as:
- Roof replacement
- External painting
- Lift replacement
- Major structural repairs
Having a reserve fund helps reduce the likelihood of large, unexpected one-off bills.
Why Transparency Matters
Service charges should always be clearly explained and properly accounted for. Leaseholders should be able to see:
- What has been spent
- What is planned
- What is being saved for the future
Good management ensures service charges are not just collected but used carefully and responsibly to protect the building and everyone’s investment.
If you’re ever unsure about your service charge, reviewing the budget and accounts is a good place to start. A clear understanding of where the money goes helps build confidence that the building is being properly looked after.
