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call the estate management team: 03330 124 125

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Q: What is a Leasehold property?

A: Leasehold properties are most commonly apartments however can be purpose-built blocks, converted buildings or part of a “mixed use” development along with commercial or retail premises.  Leasehold ownership is a long term tenancy of a property which is often 99, 125 or 999 years and diminishes over time.

Q:  What is the difference between a leaseholder and a freeholder?

A freeholder (lessor) owns the land on which a development is built and in most cases owns the structure and the external fabric of the building.  A leaseholder (lessee) is granted the right to possess a property within the building by the freeholder with a fixed term of occupancy.  Usually the freeholder is referred to as “landlord” and leaseholder as “tenant”.

Q:  What is the difference between a managing agent and a management company?

A management company is a legal entity, registered at Companies House and referred to within a lease.  It is created to provide ongoing management of a development.  In most cases the management company is made up of leaseholders as member and directors and they in turn will choose to employ a professional management agent such as Centrick Property to provide services and management on its behalf.

Where a management company does not exist the managing agent will be directly instructed by the landlord/freeholder.

Q:  What is a Lease?

A :  A lease is a legal contract between the landlord and the tenant (and in some cases the management company).  It details the rights and responsibilities that all parties have.

Q: What are service charges?

A: Service charges cover your share of the cost of maintaining the building and development in which your property is situated.  Service charges are paid as detailed in your lease.  Usually Service charges cover all the costs associated with looking after the common parts of a building, e.g. maintenance, electricity, cleaning, gardening,  plant and machinery, buildings insurance, contribution to the sinking fund (subject to the lease allowing to do so).

Service charge amounts can vary from year to year, based on predicted expenditure. Most leases allow for the service charge to be collected in advance, repaying any surplus or collecting any shortfall from the leaseholders at the end of the financial year.

Q: What is a service charge budget?

A:  At the start of the financial year, a budget or “statement of anticipated expenditure” is prepared for the costs likely to be incurred during the service charge period.  The service charge budget is primarily designed to cover expenditure anticipated for the day to day costs of managing the communal areas of the development.  As this is only an estimate there will often be a “balancing charge” or “balancing credit” to adjust the level of costs incurred.

Q:  What is a balancing charge or balancing credit?

A:  At the end of a service charge period, a reconciliation of actual expenditure supported by valid invoices is compared to the amount of service charge requested in advance (as per the budget ).  Any variation between budgeted expenditure and actual expenditure being either a surplus or shortfall is then apportioned to each leaseholder.  If there is a “balancing charge” then this will be invoiced to each leaseholder.  If there is a balancing credit this will usually be reflected on your service charge statement or in some instances (depending on your lease) it will be decided to transfer this surplus to the reserve fund for future works.

Q:  Who is liable to pay a balancing charge?

A:  The leaseholder at the time of when the charges are issued is responsible to pay the balancing charges.

Q:  Are balancing charges applied when your managing agent hasn’t done a good job?

A:  No.  Balancing charges are applied when the expenditure has exceeded income.  Budgets are only estimatess based on the knowledge that the property manager has of the development at that time.  Using their best endeavours they budget as accurately as possible, however unforeseen circumstances cannot be budgeted for. 

Q:  How long have I got to pay the balancing charge?

A:  Balancing charges are required to be paid immediately upon receipt of the invoice.

Q: How do I make payments?

A:  The managing agents are legally bound to collect monies on behalf of the management company or landlord in accordance with the terms of the lease.  There are several ways to pay:

By Cheque: Please make cheques payable to 'Centrick Property'. Please write the tenant reference number/property on the back of the cheque.

By BACS:  Details of the account number, sort code, and bank are often found on your invoice.  Please quote tenant reference number.

Q:  What happens to my service charge payments?

A: Service charges are collected and held in a trust account for the individual client. This is  to allow for contractors and utilities providers services to be paid. As members of ARMA (Association of Residential Managing Agents) we do adhere to the RICS Code of Practice which requires Centrick Property to hold all client monies in designated accounts.

Q:  What happens if I do not pay my service charges, balancing charges, ground rent when requested?

It is the leaseholders obligation to make payments promptly when demanded under the terms of the lease.  Centrick Property maintain a strict procedure to ensure that money is collected on time to ensure a smooth running of the development.  If payment is not made the leaseholder could face legal action against them and a charge made on the Property. 

If you have difficulty in paying the charges for whatever reason we ask that you make contact with us to discuss a resolution.

Q:  If my contact details change, what should I do?

A:  It is important that our records are kept up to date with the relevant contact information.  If any of your personal details change, please contact the Estates Management Department as soon as possible and notify them of the changes.

Q:  I own a freehold house, why do I have to pay a service charge?

A: If a development has a combination of freehold and leasehold properties the freehold houses may have to contribute to the management costs of the communal areas, i.e. gardens, gates, lighting, access roads.

Q:  Am I responsible for buildings insurance on my apartment?

A:  The freeholder/Management Company (or managing agent on their behalf) arrange the building's insurance for leasehold properties.  Leaseholders would need to arrange their own contents insurance.  

If your property is freehold then the owner is responsible for arranging both buildings and contents insurance.

 

Providing an outstanding service is key to our philosophy at Centrick Property and we always strive to provide the best to our customers. However, if you feel we havn't achieved this to your expectations, please consult our complaints procedure to see our internal policies and what your next steps are.

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