Service Charges

Property Service Charges | Block Management Arrears | Property Accounts

RICS property block management service charges collection arrears and accounts for residential blocks of flats with transparent financial reporting controls

Property Service Charges for Block Management and Property Accounts

Professionally prepared property service charges accounts, forecast budget and planned financial expenditure are underpinned by transparent financial reporting and controls.

Service charges are calculated and agreed with the freehold landlord or leasehold management company on the basis of an approved budget forecast. The agreed service charge is collected from each leaseholder by issuing individual applications requesting payment in accordance with the lease.

property service charges
Property Accounts

Compliance with statute is necessary requiring that specific service charge notices be served on the leaseholders which must state the tenants’ rights in a prescribed form. It is important to issue the payment demand within the correct time frame taking account of statute and the dates stipulated in the property lease.

Where ground rent is to be collected for the landlord or developer the same principles apply with payment demands requiring to follow a prescribed format in accordance with statute.

Planning your property service charges budget and expenditure

In order to facilitate the property service charge calculations and the proportion to be allocated to each of the flats, it is essential to carefully prepare a projected cost estimate of the likely annual expenditure for the whole estate. An annual budget forecast will be prepared on your behalf for your agreement and approval.

property accounts
Block Management Arrears

Whilst the budget will need to take account of previous expenditure levels and estimated future requirements, figures must be realistic and affordable to the leaseholders who are being asked to contribute. Put simply, a good service charge budget should ideally be tailored to the needs of the estate, the lease and the priorities and wishes of the freeholder and leaseholders. 

Armed with suitable and affordable expenditure limits appropriate to the property accounts and the leaseholders, we will endeavour to maintain a balanced cashflow throughout the year. By securing service charge monies and ground rent payments in a timely fashion this helps ensure that financial commitments can be planned and met.

Property accounts income and expenditure is carefully planned to ensure that sufficient funds will be available to meet the property management company liabilities in respect of regular outgoings from the service charges client account

property service charges
Property Service Charges

Prudent financial management is exercised to control expenditure to within the limits set out in the overall budget. We are very much aware that overspend must be avoided and that an explanation will be necessary if the agreed parameters are at risk of being exceeded.

Service charge funds must be held separately in trust in a protected, designated client bank account which provides safeguards and insurance to leaseholders in the event of default under the RICS Client Monies Regulations. Your service charge monies are covered by the RICS’ Client Money Protection Scheme.

An effective accounting system is also imperative to maintain the trust of the leaseholders and all participants. You are of course assured of impartial professional standards and ethics through the RICS Regulations and more specifically under compliance with the RICS Residential Service Charge Management Code.

Freehold, Right to Manage Company (RTM) or leasehold management company property accounts may require to be produced separately which we will arrange in an acceptable format.

Client reporting of accounts is equally important. Regular financial reporting is presented in a clear, easy to read format using plain simple English, avoiding the use of technical jargon wherever possible. 

Experience has shown that transparent reporting allows fast, decisive action to be taken by management to help solve potential problems before they escalate. As you would expect from a firm of chartered surveyors, regulated by RICS, and member of the Property Ombudsman, we carry out our duties in a professional and diplomatic manner.

Service charge accounts are prepared at the year end and circulated to all leaseholders in accordance with statutory requirements. We will implement suitable accounting procedures and will produce annual accounts for audit by chartered accountants in strict compliance with statute and the RICS regulations.

Freehold, Right to Manage Company (RTM) or leasehold management company accounts may require to be produced separately which we will arrange in an acceptable format.

In the event that block management arrears eventuate we have tried and tested, robust procedures that we follow. Please be assured that we are well versed in resolving matters fast and achieving a satisfactory outcome. We will act promptly before problems escalate undertaking whatever is necessary to recover any service charge arrears in a measured and diplomatic manner.

Property accounts are prepared and finalised in an easy to understand and  transparent format and issued as soon as possible following the property service charge year end.