SERVICE CHARGE BUDGETS
We will prepare an annual service charge forecast based on the anticipated costs for the year ahead. We will carefully estimate the expected cost of providing the essential services such as cleaning, gardening, lighting, repairs, management, security, accountancy and insurance. The service charge budget is approved by the client. Costs are carefully monitored throughout the year to ensure the best use of funds.
Cyclical maintenance such as redecoration, tree pollarding etc. will also be included in the budget. It is important to include these items so that the funds are in place when the time comes to carry out the work.
Often the Lease provisions allow for a reserve/sinking fund to be built up where there is an amount put aside each year through the service charge for future large items of expenditure and major overhauls, for example, roof replacement and car park resurfacing. Windows, doors and roofs etc. will all come to the end of their useful life when they will no longer be fit for purpose. It is important to save up for these large items of expenditure. Reserve fund analysis and careful planning this way is in the best interests of the leaseholders and is also attractive to potential buyers if you decide that you wish to sell your property.
It is imperative that Leaseholders’ money is accounted for accurately and that there are records and receipts for all income and service charge expenditure. Depending on the requirements of the block or management company, Accounts or a Statement of Service Charge will be produced each year by the accountant appointed to do so. All records, invoices, bank statements are kept at our office and are available for inspection by leaseholders by appointment. We use industry approved software for our record keeping and accounts.
SERVICE CHARGE RECOVERY
We have an effective accounts department dedicated to collecting arrears of service charge and ground rent. The covenants in the lease set out the contractual obligations in which the leaseholders should pay their service charges. Francis Butson & Associates undertakes to collect the service charges in accordance with those terms and on the dates specified. On the rare occasion when we are unable to collect the debt we use the services of a professional property debt collection agency. There is no cost to the management company. The fees charged by them are added to the debt and therefore payable by the offending leaseholder.
GROUND RENT COLLECTION
Where applicable, Ground Rent is collected from the Leaseholders in the prescribed manner under current legislation and in accordance with the terms of the Lease on behalf of the Landlord,