Service charges are payable on the modern quarter days of 1 July, 1 October, 1 January and 1 April under the legal agreements for properties on the Estate. Since previous reserves were exhausted, they must be paid on time to provide enough money for day-to-day running of the Estate, and can no longer be paid monthly as a concession. Interest may be charged once payment is in arrears beyond a short grace period. Rights and obligations regarding service charges and administration charges are summarised in a document (PDF scan, 256kb). Service charges must be paid to the Managing Agent, which runs the Management Company's bank accounts. Payment can be made in several ways:
Interest on Arrears
The legal agreements for leasehold flats and freehold houses on the Estate have slightly different provisions on charges, which are referred to throughout this website as service charges for simplicity. In flat agreements terms include rent, rates, taxes, duties, charges, assessments outgoings and impositions, while the period allowed for payment is 14 days. In house agreements terms include rent, annual maintenance provision and service contribution, while the period allowed for payment is 21 days. Both types of agreement provide that interest may be levied on service charge payments overdue after the period allowed for payment at 4% above the Midland Bank (now HSBC) base rate. Because arrears were increasing, property owners agreed at the 2013 Annual General Meeting (PDF, 31kb) that interest could be charged if the situation did not improve. Regrettably it did not so, from 1 July 2014, interest may be charged on service and other charges from the end of the period allowed for payment when arrears are collected.
The rate of interest on arrears changes automatically with bank base rates and increased from 4.25% to 4.5% on 2 November 2017.
Under the terms of the legal agreements for the properties on the Estate, the Management Company has to set a budget at the start of each financial year, which provides the basis for collecting service charges for that year.
The current and previous budgets are available on the Documents page.
Under the legal agreements for the properties on the Estate, the Management Company is required to carry out periodic maintenance, usually every four or five years. To avoid a much larger service charge payment in the years when maintenance is carried out, a contribution is levied annually over the period to build up reserves estimated to be sufficient to cover the maintenance at the end of the period together with a contingency. If a property is sold during the period, the former and new owners both contribute to the periodic maintenance, so this should be allowed for in the payment on completion.
The current and previous reserve calculations are available on the Documents page.
The principles on which the reserve funds are based are illustrated in the following diagram:
The Managing Agent keeps the accounts for the Management Company. After the end of each financial year, the Management Company's accountant prepares the financial statements for the finacial year just ended, in accordance with company law and accounting practice. The accountant is currently PB Associates. Accounts are available on the Documents page.
At the Annual General Meeting on 1 December 2010, shareholders decided that the company would take advantage of the exemptions available to it as a small company and no longer have its accounts audited, to reduce costs. In addition, the accounting governing bodies decided that the treatment of service charges should be changed. For these reasons, accounts from financial year 2010-11 on are in a different format from those previously. To allow comparison of costs and reserves between years, as agreed by shareholders, since the change the accountant produces a separate service charge statement as well as the company financial statement.
Old accounts, mostly prepared and filed by former directors, have been retrieved from the Companies House website to provide as complete record of the company's financal history as is readily available. They were prepared in a variety of formats, so are not always readily comparable with more recent accounts.