What are service charges?
They pay for the services we provide to your estate or block. This could include cleaning communal areas, looking after any outside space, lift maintenance and communal lighting. Any changes in the amount you pay will take effect from July each year.
Can I see my rent and/or service charge statements?
Please ring Customer Services on 0300 303 1010 to ask for a statement.
Service charges – FAQs
What is a service charge?
Service charges pay for the services we provide to your estate or block. This could include cleaning communal areas, looking after any outside space, lift maintenance and communal lighting.
When will my service charge amount change?
The service charge for shared owners and tenants is applied to your weekly rent. Leaseholders will receive an annual invoice.
When will I know how much I need to pay?
You will get at least four weeks’ notice of the change.
Why have I received a statement?
The service charge year operates in overlapping 18-month cycles. Before the year begins, we send an estimate of what we think the cost of providing services will be in the coming year to all customers. These are being sent in June 2021. This estimate is based on what was spent in previous years, taking into account any increases or decreases due to changes in contracts or service requirements. Every accounting year (April to March), we will ask you to make monthly/weekly contributions towards the estimated costs for managing, repairing and providing services to the block/scheme that includes your flat. If your block is part of an estate, the estimate will also include estate costs. If your flat is connected to a district heating system it could include heating/hot water costs.
At the end of the year, i.e. after the end of March 2021, we calculate the actual amount spent on each service, using invoices received from our service contractors, utility providers, managing agents and any other cost. Where appropriate, we ensure that independent examiners check the accounts and certify them. We then produce your Service Charge Year End Statement which shows your share of the amount spent, what we estimated and the difference between them. This difference is applied to your account as an actual charge, also known as a year-end adjustment.
Paradigm doesn’t make a profit on service charges, they just pay for the services you receive.
What is an under recovery?
An under recovery is when we have overspent on the budget we set. This means your charge will go up the following year to cover this extra cost.
What is an over recovery?
An over recovery is when we spend less than we have charged you. When this happens, the calculation for your service charge for the coming year takes this into account.
What is the management fee?
The management fee pays for the administration costs incurred by Paradigm when providing services to your estate or block. It covers:
- estates services
- contract management and monitoring
- service charge calculation and production of accounts
- general administration
We review how much it costs us to administer service charges for the year and then allocate these costs to each block or estate based on the level of services received. Paradigm’s management fee will not exceed 15% of your total service charge costs.
I have been charged for a service but I have not received it, what should I do?
Firstly, tell us you haven’t received the service and we will act to sort it out.
If, for example, your grass hasn’t been cut as often as it should be, we will ask for a credit note from our contractor. This amount will be credited to the account of your estate or block and be reflected in the following year’s service charges. Refunds are not usually made during a year.
If you believe you have been charged for a service you have not received please contact Customer Services on 0300 303 1010 and they will investigate.
I have been charged for a service I don’t receive?
You should only be charged for services you receive. If you believe you have been charged for a service you do not receive please contact Customer Services on 0300 303 1010.
What services are included in my service charge cost?
Your service charge includes all services you receive in your block or estate. The statement you receive provides a list of services and for more information on what each service charge heading covers please see the Service Charge Guide. Please note the guide is comprehensive and you are unlikely to require every service listed.Service Charges guide
What if I am having problems making payments?
If you are having a problem making payments please contact our Customer Service Team on 0300 303 1010, press option 3. Alternatively if you wish to set up a direct debit please dial 0300 303 8048. If you are worried about your finances please contact your local Citizens Advice.
Do I pay for repairs for my building?
Yes but only if they are for communal areas or chargeable services you receive. Some are included in the maintenance and service contracts, like lifts and car park barriers.
Why do you charge for bulk refuse collection?
We will arrange for the collection of bulk rubbish when the local authority doesn’t do it and the cost will be included in your service charge. Where we have evidence that a specific resident is responsible for the bulk rubbish this will be recharged directly to the resident.
What is section 20?
Under Section 20 of the Landlord & Tenant Act 1985, we are legally obliged to consult you if we plan to:
- Do any work to your block that will cost you more than £250 (known as ‘qualifying works’)
- Enter into an agreement for work or services which will last for more than 12 months and will cost you more than £100 a year.
This consultation is carried out through the Section 20 consultation process. It includes but is not limited to:
- Reactive repairs
- Investment works – redecorations, roof and window replacements
- Contracts such as grounds maintenance, cleaning and utilities.
Further advice on section 20 processes can be found here.
Why do I pay service charges when I live in a house?
If you live in a house, you may still pay service charges towards the maintenance and upkeep of your estate. For example, external cleaning, gardening, or play equipment. All properties on the estate will share the costs.
Who should I contact if I'm unhappy with my service charge?
In the first instance, you should contact our Customer Service team on 0300 303 1010. Our Service Charge team will investigate. If you are unhappy with the outcome of this investigation we will explain the options available to you.
What is a sinking fund?
The purpose of a sinking fund is to set aside money for larger maintenance work to ensure suitable funds are available when required.
If a fund is not in place, leaseholders would be at risk of facing large bills when maintenance work is required. A sinking fund effectively spreads the cost of this work and would only be charged where your lease allows.
Sinking funds can be used towards a range of key maintenance tasks such as:
- Roof replacement
- Window replacement
- External decoration
- Internal decoration of communal areas
What is ground rent?
Most leaseholders have to pay ground rent as a condition of their lease. It is paid to the owner of the land your home is built on. The amount you have to pay and how you pay is in your lease agreement.
What impact will COVID-19 have on my service charge?
We recognise that some services have been disrupted by COVID-19. For the 2020/2021 service charge year we have taken account of any reduction or change in the services provided due to the pandemic and these will be reflected in your 2020/2021 year-end service charges.