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Understanding your service charges

Learn about service charges, which cover costs for communal areas and shared facilities.

What is a service charge?

A service charge is a payment that helps cover the cost of services and maintenance provided to your home and the areas you share with other residents.

This can include cleaning communal areas, maintaining gardens, lighting shared spaces, carrying out safety checks and keeping shared facilities in good condition.

The services you receive will depend on your home and where you live, so not everyone will pay for the same services.

On this page you will find information on:

How service charges are calculated
What service charges cover
Types of agreements and service charges
FAQs and terms explained

How much will I pay?

The amount you pay for service charges depends on whether you rent, own a shared ownership home, lease your home or own your home.

Your tenancy agreement, lease or other legal documents will explain the charges that apply to you.

If you pay a service charge, you have the right to:

ask for a summary showing how the charge is worked out and what it’s spent on
see any paperwork supporting the summary, such as receipts.

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Unsure about your service charge?

What service charges cover

The list below shows some common service charges. You will only be charged for services that are provided to your home, building or estate.

If you are an Affordable Rent tenant, service charges are usually included in your rent. Personal charges, such as heating, electricity or water supplied to your home, may be charged separately.

Abandoned vehicles: removing abandoned vehicles from your estate.
Administration fees: a fee of 15% to cover looking after your account.
Bin hire: paying for refuse companies or councils to hire bins for the estate or block.
Building insurance: for damage by risks such as fire and flood.
Caretaking: vehicle hire, cleaning materials, equipment and a portion of salaries.
Cleaning: contractor cleaning fees for stairs, communal areas and paths.
Clearance of rubbish: removing large objects, eg caused by fly-tipping.
Communal electricity: for lifts, boilers, air-source heat pumps, water pumps etc.
Communal lighting: repairs and maintenance of block or street lighting.
Communal window cleaning.
Concierge: maintenance access and security for buildings run as part of a scheme.
Day-to-day repairs: for repairs in communal areas, eg main entrance doors.
Door-entry service contract: maintenance of door-entry systems.
Fire protection: maintenance of emergency lighting, alarms, sprinklers and automatic opening vent systems.
Grounds maintenance (contract): grass cutting, tree surgery, maintenance of flowerbeds.
Grounds maintenance (non-contract): costs for the above incurred outside of contract.
Intensive housing management: for managing facilities used by LiveSmart residents.
Laundry service: servicing, washing, drying, and maintaining washing machines and dryers.
Lifts: maintenance of lifts and stairlifts.
Lightning protection: protection against lightning strikes.
Major works (homeowners only): planned maintenance, eg roof replacements or new lifts. You’ll be informed in advanced of estimated costs.
Management fees (homeowners only): managing your lease, collecting rent and service charges, consultation on repairs, investigating breaches etc.
Managing agent services: use of an external managing agent to provide services if we don’t own the freehold (copy of agent’s accounts provided on request).
Provision of mechanical and electrical: eg CCTV, door-entry phones, fire safety equipment (calculated by dividing the cost of the installation by its life expectancy).
Provision of other equipment: non-mechanical and non-electrical equipment, eg salt bins (calculated by dividing the cost of the installation by its life expectancy).
Rooftop safety: fall arrest safety equipment used for roof maintenance and window cleaning.
Sewer or surface pump servicing contract: maintenance of wastewater or sewerage plant and system (not applicable if your home is connected to a main sewerage system).
TV aerial servicing contract: maintenance of communal TV aerials.
Water hygiene management: maintenance of communal water tanks, including annual testing for legionella.

How are service charges calculated?

For services provided by Clarion

We calculate each service charge at the start of the year. We do this using previous costs, changes to contracts and expected inflation.

Your share of the cost is worked out in line with your agreement.

We write to residents in February of each year with their service charges for the new financial year (April to March). If you have not received your letter, or need help understanding it, please contact us.

For services provided by a managing agent

In some cases, services are provided by a managing agent. A managing agent is someone who runs the day‑to‑day management of a property.

If a managing agent provides your services, we may use their data to work out or explain your charge. We check the information they provide and ask for evidence to support the costs.

If you pay charges directly to a managing agent, the way you pay and who you contact may be different. If you're not sure who to pay or who can help with your charges, please contact us.

Types of agreements and service charges

Depending on your agreement, your service charge may be fixed, variable or dealt with through another arrangement, such as an estate charge.

A fixed service charge is set for the year and does not change, no matter the actual cost for that year. It may still be reviewed for future years if your agreement allows this.
A variable service charge may be adjusted once the actual costs are known, where your agreement allows this.

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What type of agreement do I have?

Find out if you pay a fixed or variable service charge.

FAQs

If you get Universal Credit or Housing Benefit, you must inform the DWP of any changes to your service charges. Some service charges will be covered by these payments – these are known as eligible service charge. Other charges will be classified as ineligible and not covered. Eligible charges are typically those related to communal services, such as communal electricity, refuse removal etc. Charges for personal services, for example personal heating and hot water, personal electricity, tinkering and sinking fund etc.are ineligible and therefore not covered by Universal Credit or Housing Benefit.

Please contact us so that our service charge team can look into why the charge has occurred/ what the charge covers. If you remain dissatisfied with a charge, you have the right to request that a review is carried out by the First-Tier tribunal, a government body, who have the authority to determine whether a charge is payable.

Further information on tribunals can be found in the Summary of tenant’s rights and obligations document. We include a copy of this in your service charge mailing.

If you would like a full breakdown of your service charges, please contact us stating ‘Section 22 request’ so we can deal with your request promptly.

There are strict timeframes for us to respond to a Section 22 request. Full details can be found in the ‘Summary of tenant’s rights and obligations’ document which is included in your service charge mailing.

Below is a summary of points 9 and 10 which covers Section 22:

9. Getting a breakdown of service charges

You can ask your landlord in writing for a summary of the service charge costs for the last 12 months.
The landlord must give it to you within 1 month, or within 6 months of the end of the period it covers -whichever is later.

10. Checking the documents

After you receive the summary, you have 6 months to ask to see the receipts and accounts behind the charges.
The landlord must let you look at them and take copies.

The administration fee of 15% is charged on the total cost of services to communal service charges; this is capped at a maximum of £205 per property per annum . It covers our costs of obtaining and managing the service and the cost of preparing and reconciling the service charge account.

A management fee is charged to some homeowners to cover our costs of managing the relationship with you as set out in your lease or freehold transfer and covers our costs of managing the lease obligations, collecting rent and service charges, and carrying out consultations with leaseholders.

Essentially, the admin fee is charged on communal services provided, whilst the management fee covers our cost of managing the relationship with you as the homeowner.

If you are a variable service charge customer and you have overpaid service charges, based on estimates provided, the overpayment will be credited to your account.

The credit can either be refunded to you or used to reduce ongoing payments. Please contact us to discuss these options.

If you pay by direct debit, this should automatically adjust to use up the credit over the remainder of the year but please do check and let us know if this doesn’t happen.

If you pay by other methods then you can use the credit to reduce your on-going payments. If you are unsure what to pay, please contact us.

Glossary - terms explained

This list defines the key terms and phrasing used in service charge communications.

Administration fee

A charge (capped at £205 per year) applied to communal service costs to cover the landlord's costs of arranging, managing, and reconciling those services.

Apportionment

The method used to divide service charges between residents in a block or estate, based on what is set out in the lease or legal documents.

Eligible service charges

Service charges that can be paid through Universal Credit or Housing Benefit — typically communal services like lighting or refuse collection.

Ground rent

A payment required under some leases that homeowners pay to the freeholder. The lease sets how much is due and whether the amount increases.

Ineligible service charges

Service charges not covered by Universal Credit or Housing Benefit. These usually relate to personal services such as personal heating and hot water, personal electricity, tinkering and sinking fund etc.

Management fee

A fee charged to some homeowners to cover the landlord's costs of managing lease obligations, collecting rent or service charges, and carrying out required consultations.

Service charges

Payments made by residents to cover the cost of services provided to a building or estate, such as communal cleaning, maintenance, or repairs.

Sinking fund (or reserve fund)

A long-term savings fund collected from homeowners to cover major future works, such as roof replacement or large repairs.

Summary of tenant’s rights and obligations

A legally required document sent with annual service charge demands, explaining your rights — including how to request information or challenge charges.

True-up

A credit or charge applied after comparing estimated service charges with actual costs at year-end.

Variable service charge

A service charge amount that can change each year based on actual costs (as opposed to a fixed charge).

First-tier tribunal

An independent government body that reviews disputes about service charges, including whether a charge is reasonable or payable.

Understanding your service charges

What is a service charge?