When a rental property is contained in an apartment block or housing development, either the tenant or the landlord may be expected to pay an annual service charge. This charge will usually cover maintenance and repair work in communal areas.
Paying a service charge
If you expect the tenant to be liable for any service charges or management fees levied on you by the building manager, you must make reference to this in the tenancy agreement. If there is no reference to additional service charges, the tenant cannot be held liable for paying this as the tenant never agreed to make the payment.
Regardless of who is responsible for paying the service charges, you should make a copy of the service charge agreement available to the tenants so the tenant knows what work the building manager is supposed to carry out and who deals with any problems that may arise. The service charge contract should specify whether the charge is a fixed fee or a percentage charge, the monetary value of which can change from year to year. The contract should also include a list of services which the building manager is expected to provide in return for payment of the charge.
When you make a payment, ask the building manager to provide you with a receipt. Although contracts vary from building to building, The Royal Institute of Chartered Surveyors has published guidelines which suggest best practice for building managers in operating service charges. You should receive an annual statement which shows the payments you have made.
Services covered by charge
The services that are provided by a building manager will differ depending on the service contract. Usually, you can expect your service charge to pay for the following items:
- cleaning and maintenance of communal areas
- maintenance of any communal gardens
- regularly servicing lifts in the buildings
- upkeep of any communal heating systems
- carrying out repairs in communal areas
Building manager's responsibilities
If your property is in a managed building, make sure both you and your tenants have contact details for the building manager. The building manager will usually be responsible for
- collecting service charges
- arranging for the recovery of unpaid charges
- preparing, submitting and circulating service charge statements to tenants
- ensuring that funds are used correctly
- engaging and supervising maintenance staff
- arranging and managing for annual safety or service checks
- ensuring the building complies with all relevant fire safety and health & safety legislation
- making sure that all insurance on the building is up to date
- communicating with tenants in the building
- responding to any tenant enquiries
In Northern Ireland, there is not currently any legislation that relates specifically to service charges and block management issues. The terms contained in these agreements vary from contract to contract.
If you are concerned that services which are included in your contract are not being carried out, you should speak to a solicitor and get legal advice.