FAQ's

 

What is Service Charge?

Because you live in a managed development, a number of services are arranged centrally by the management company and the costs of these are shared by the owners in the form of a service charge. When you purchased your property, you entered into a lease or transfer deed which states the proportion of the various costs that you have to pay.

The lease or deed also states how service charge is to be paid, on what items Trinity can spend the service charge and how the service charge is to be accounted for.

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Why do I have to pay Ground Rent?

If you live in a leasehold property, you have purchased your home for the residue of the term of the lease - often 99, 125 or 999 years. Under the terms of your lease there is a ground rent payable to the owner of the land and the building, the freeholder. The amount of ground rent, how it is paid and when it will increase is stated in the lease and will not change if the owner of the freehold changes.

Trinity often collect ground rent on behalf of the freeholder as a service to them but in some cases, the freeholder will collect this themselves.

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How can I pay my Service Charge or Ground Rent?

Often your solicitor will have collected an amount of service charge on account when you purchased your home which is usually passed on to Trinity.

However, thereafter Service Charge and ground rent can be paid by cheque made payable to 'Trinity Estates' and posted to our Head Office. Please write your Account Number or full name and address on the back of the cheque or enclose the Remittance Advice off our invoice.

In addition, you can also pay the above by Direct Debit. If you feel this method of payment would be more suitable please do not hesitate to contact Trinity.

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Why has the Service Charge increased?

The service charge is an estimate of the actual costs of providing the various services arranged by Trinity. The costs of these services can vary depending on contractors/suppliers charges, changes in the level or frequency of services required or maintenance requirements and, changes in legislation.

For example, utility suppliers for electricity or water may increase their prices on communal supplies, or usage might be higher than previously anticipated. The level of repairs needed might be higher than anticipated or it might be decided that services such as cleaning or gardening need to be carried out more frequently. Insurance costs may also change as a result of wider trends. Budgets /estimates will take into account long changes in costs.

Whatever the outcome, we use our expertise to keep costs as low as possible but consistent with providing the right level of service.

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How do I know what Trinity is spending my Service Charge on?

At the start of each financial year, a Service Charge Budget is prepared which is sent out to all owners and which sets out, line by line, how the service charge has been calculated, together with explanatory notes. The budget is an estimate of costs for the forthcoming year based on previous years expenditure for the development, current costs and planned and anticipated expenditure.

Following the end of the financial year, Service Charge Accounts, are prepared for each development, as in accordance with the lease or deed, and legislation. The service charge accounts detail the actual expenditure during the year and are certified by an independent Chartered Accountant as being accurate.

When the accounts are prepared we compare what the actual costs have been to what we have billed during the year, based upon the budget, to identify any surplus or deficit. If expenditure has been lower than anticipated then there will be a surplus that will be credited back to your account; if costs have been higher there will be a deficit, and an additional charge will be payable. Either way, you will only pay your proportion of the actual costs of providing the services.

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Why do I have to pay Service Charge when I live in a Freehold House?

Some developments of freehold houses have the benefits of shared facilities or areas which have to be managed, and the associated costs of this paid for by the house owners. There will generally be less maintenance required compared to a typical block of apartments, but maintenance costs might include electronic gates, shared grounds, areas of open space and private roads and drainage that are not adopted by the local authority or utility companies. Where there are shared areas Property Owners Liability (Public Liability) insurance will need to be arranged.

Where a development is mixed and comprises houses and apartments and in some cases commercial properties, the costs are apportioned fairly between the various elements and this is reflected in the service charge.

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What is the Sinking Fund and Redecoration Fund?

Trinity is responsible for the long term maintenance of the property including redecoration of the exterior and internal communal areas, future major repairs and renewals. Therefore, usually included in the service charge, there are amounts set aside in the form of a Redecoration Fund and/or Sinking Fund. Each year a contribution is made into these reserve funds with the intention that they build up over the years so that when works are required, there is a fund available to go towards the costs, reducing any additional one off payments that may be required to make up the shortfalls.

Reserve funds go towards ensuring that the development will be looked after for its full life, thus ensuring that property values, saleability and appearance are maintained.

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What is the Management Fee?

The Management Fee is one element of the service charge and is Trinity's charge for providing the day to day management service.

Trinity's Management Fee is based upon a set annual charge per property. It is not based on a percentage of expenditure which of course would give no incentive to keep costs down.

In general, Trinity increases its Management Fee each year in line with inflation.

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When will Trinity start charging me Service Charge?

Under the terms of your lease or transfer, service charge is payable for the full duration of the ownership of your property.

In the case of a new development however, often the developer is likely to retain control and carry out any early management services such as cleaning or landscape maintenance until they are ready to hand over responsibility to Trinity. In these situations, Trinity will generally not commence collecting the service charge until the particular block or area of a new development has been handed over to us and we are providing the services. We will write to you once we commence management.

If you have paid service charge to the developer when you completed your purchase, this will be passed over to us and will remain as a credit on your account until we begin providing services.

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My property is empty, why do I still have to pay?

Under the terms of your lease or transfer, service charge is payable for the full duration of the ownership of your property irrespective of whether it is occupied or empty.

Each property owner contributes towards the costs of the services and these contributions add up to 100%. If we did not charge you whilst the property was empty, we wouldn't recover 100% of the costs and there would be a shortfall which would have to fall unfairly upon the other owners.

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What has happened to the Service Charge that I paid to the developer when I bought my home?

If you paid an amount of service charge on account when you completed your purchase, this is passed to Trinity and will sit as a credit on your account until we start providing services.

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What do I do if the wrong name is on my Service Charge invoices?

If you have recently purchased your home, it is possible that we have been incorrectly advised of the name of the owner. It is a requirement of the lease or transfer that we receive formal notice of sale which solicitors should deal with as part of the completion process, and we are unable to change our records until we receive this. As a first step please check with your solicitor that they have issued the Notice required by the lease or deed to Trinity and if you still need help, please contact our Legal Team at Head Office.

If your name has changed or someone's name should legally be removed, we will need to be advised in writing together with a copy of the relevant legal document such as a marriage certificate, deed poll or probate certificate.

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Why is my Service Charge higher than my neighbour or the building down the road?

No two buildings are the same and although a block may look to be similar, there will be many differences that may affect the amount of service charge.

The number of apartments in a building can have an effect with regard to economies of scale - larger buildings can often be run more cost effectively than one with just a few apartments to share the fixed costs such as lift maintenance.

Different buildings have different equipment to maintain - looking after fire alarms, electronic gates and lifts for example are a significant costs that may not apply to some buildings. Not all buildings will have a provision in the service charge for building up reserve funds to pay for redecorations and major repairs. If these items aren't reflected in the service charge, then they are effectively a hidden cost for the future.

The service charge for individual properties can be calculated in a number of ways to reflect the services that they individually benefit from or, in some cases to reflect the size of the apartment.

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What are my rights?

There is an extensive body of legislation concerning the management of leasehold property and accounting for service charges to which Trinity must adhere. This legislation lays down requirements for how we keep and account for service charge monies, the reasonableness of service charges, information we have to give to you and consultation before we carry out major work.

If you own a freehold property, the body of legislation is somewhat less and you must rely on your terms of your specific transfer deed.

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