Service Charge FAQ

A Service Charge covers the cost of providing services to communal/shared spaces that are not covered by your rent. The amount that you pay will depend on the terms of your tenancy/lease agreement and the level of service provided.

For example: 

If you live in an individual home on an estate, you may contribute towards the cost of grass cutting on the Incommunities land that’s near your home, or as it is mentioned in your tenancy/lease agreement.
 
If you live in a flat within a block, you may contribute towards the cost of cleaning the shared spaces in that block, for shared lighting and heating.

That cost in both examples will be split, as explained within the terms of your tenancy/lease agreement.

Every penny that we receive from service charges goes towards the cost of the services that we provide.

Service charges pay for things such as:

• Fire alarm and fire safety
• Lift services
• Caretaking and cleaning
• Communal lighting
• Grounds maintenance

Plus lots more. However, not all customers pay for all services.

For most customers the cost for the services that you receive are estimated and sent to you in February each year, alongside the rent increase letter.

Those customers are charged based on the estimates for the financial year starting in April. We’re doing a review of our services at the minute to help us understand the range of service we provide and their costs.

This review will help us to provide you with more detailed information, including the actual cost of the services that you receive.

Service Charge Estimate: 

In most instances, service charges are first worked out as estimates of costs. Some services are responsive and depend on demand such as fly tipping or communal repairs, so we don’t know in advance the exact amount it will cost to provide these services. In this case we’ll estimate the cost of the service charge for the coming financial year by looking at costs from previous years, take an average cost and apply an uplift.  Where we have external suppliers providing contracts for services, we’ll look at any changes to the contracts, and any expected changes in VAT and inflation over the coming year and use this is as a basis to calculate an estimated service charge. 

A Service Charge Estimate is prepared before the start of the new financial year (April) and sent to you in February.  

Some large items, for example, door entry systems, need to be replaced from time to time. To plan for this, and to avoid charging you the costs all at once, we collect regular amounts as part of the service charge. These are known as provisions.  When the work needs to be carried out, this money is then used to pay for the work. 

In some cases, you may pay for equipment that has already been replaced. This is because the cost is spread over a number of years, so that you don’t have to pay for it in one big lump sum. 

If you are charged a variable service charge, the surplus (underspend) or deficit (overspend) will be included in the Service Charge Estimate for the next year. 

A management fee is also included within the service charge to cover the administrative cost of managing the service charge process.