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Management Fees

L&Q charges all residents with management fees. These fees contribute towards the costs that we incur in managing our sites ie towards the cost of the various departments and staff within the organisation who make sure you receive the best standard of service possible. Our right to charge management fees is set out in the terms of your tenancy, lease or freehold transfer agreement.

On your service charge statement for 2017/18 you will see up to two entries:

  • L&Q Admin Fee This is a fixed amount which contributes towards our central services (eg Revenue and Housing Services departments). This fee does not change in accordance with any other expenditure and remains constant for the year
  • Management Fee This is based on a percentage of other service costs, and contributes towards your Neighbourhood Office expenditure. The percentage rates are 10% for L&Q managed properties, dropping to 5% if your home is third-party managing agent

Sinking funds

For homeowners, depending on the terms of your lease or transfer agreement, you may contribute towards a sinking fund as part of your service charge. We hold sinking fund contributions on your behalf to offset the cost of long-term major works at the Estate, Scheme or Block where you live.

Qualifying works could include cyclical redecoration of communal areas, or replacement of facilities such as lifts, door entry systems or electronic gates. We work out an appropriate level of sinking fund contribution based on the expected life cycle of the facilities to which your property has access. We review contribution rates from time to time, usually after a cycle of major works has taken place, to ensure that they remain relevant and reasonable.

Note that sinking funds are used to cover the costs of planned major works. We may not use them to cover the cost of responsive day-to-day repair jobs.

Ground rent

You may be required to pay Ground Rent under the terms of your lease. If Ground Rent is due to L&Q as your landlord, we will send you a separate notice for this. If it is due to another landlord, ie the Freeholder of the estate where you live, the Ground Rent will be payable via your service charges and it will show as an itemised line on your statements.

Other Common Service Charge Items

Below are examples of typical service charge codes that may appear on your estimated schedule, along with explanations as to how we have calculated them for 2017/18:

Third Party Management Costs (4758/4759)
These costs are for some of the services provided by third-party managing agents and are based on the most up to date budgets from the management companies. For schemes with mixed tenure the costs have been split between two codes, 4758 and 4759. All tenures contribute to costs under the code 4758.

We have replaced the code 4480 Amenity Area Charges for the 2017/18 Service Charge year. The costs under this code will now fall under the 4759 Third Party Management Costs (Homeowner Only). We have made this change to make our service charge estimates to you clearer.
This charge covers some services provided by third-party managing agents. These costs are only applicable to homeowners, not tenanted properties. However, when we allocate the charge, we divide by all properties, and L&Q absorbs the tenants share. Examples of such costs include insurance, communal repairs and reserve fund contributions.

Communal Cleaning (4180)
The cost of cleaning has increased for the 17/18 estimate by 5.06% on the original contract costs applied in March 2015. This equates to a 3.3% increase on the 2016/17 charges to you.  This above inflation increase has been calculated in accordance with the terms of the Cleaning contract, which came into effect in March 2015, and is based in the BMI index. Consultation was carried out under Section 20 of the Landlord and Tenant act for this contract and the documentation which outlined this increase was available for review at that time.

We have also included an increase to certain schemes put in place as a contingency for the mis-measuring which took place in the original procurement of the contract. This means that your contribution to Communal Cleaning may have increased by more than 3.3%. The costs in previous years did not cover the actual costs of providing this service to all parts of your block.

Grounds Maintenance (4140)
The cost of providing the Grounds Maintenance Service has increased for the 17/18 estimate by 5.06% on the original contract costs from March 2015. This equates to a 3.3% increase from our 2016/17 charges to you. We have also included an increase to certain schemes due to a variation of the frequency of services provided from the original contract. Where hedge trimming was provided in the original contact at twice yearly we have varied this to include an additional, third trim each year. The costs have increase to incorporate this additional service.

Non-Contract Grounds Maintenance (4144)
We have included a new service to some estates for the coming year. This service has been put in place to cover the maintenance and pruning of any trees, shrubs and hedges on your estate which our Estate Services team have identified will need to be carried out on a regular basis in the future. This service has been provided on an ad hoc basis in previous years. These works are not covered under the regular 4140 - Grounds Maintenance contract. [Variable response only - We have included this in our estimate to mitigate any potential deficits under this code in future, as in past years we have found this to be the cause of higher charges in some cases.]

Buildings Insurance (4752)
Your 2017/18 Buildings insurance premium has been increased. In the last year consultation under Section 20 of the Landlord and Tenant act was carried out in relation to the provision of Insurance. Our estimate for 2016/17 was prepared and issued prior to the tender process of the consultation being carried out, and a capped cost of £100 for the service was charged.

As per the consultation, this actual cost of this service in 2016/17 is £119.00 and we will deal with the shortfall in final reconciliation for this year.  The cost for 2017/18 is set at £122.00, which is an increase of £3 on the consulted cost.

Caretaking (4980/4982)
The cost of our Caretaking service has increased for the coming year. We have included an increase of 5% from the 2016/17 estimated charges. We have based this above inflation increase on the increased cost of staff wages, additional supervisory cost and a more comprehensive overhead cost for the coming year.

Emergency Lighting Servicing and Maintenance (4953/4958)
4953 relates to the fixed aspect of the emergency lighting system. This covers the scheduled servicing ie quarterly inspection, annual inspection, flick tests etc. This does not cover any remedial work. These should be the same each year, apart from agreed rises.

  • We take the basic service contract value as provided by the M&E Team; add VAT, plus an inflationary uplift (1.2% in 2017/18). 4958 - Relates to remedial works found on scheduled service visits, ie lamp changes, battery replacement, etc. it is also used for non-scheduled service visits. ie call raised by call centre, NSOs etc. It is a variable cost as it reflects non-planned work.
  • We estimate these costs out by taking the annual forecast of total spend by L&Q across all sites for Fire Protection Equipment and Emergency Lighting, and subtracting the total values of the 4953 costs worked out above. We take the resulting net amounts and divide these by the total number of properties that benefit from each service. This gives as an average unit value which we use as the basis of our service charge estimates. In 2017/18 the values approximate to £8 for Emergency Lighting.

Fire Protection Equipment Servicing and Maintenance (4296 / 4292)
4296 relates to the fixed aspect of the alarm, AOV etc. This covers the scheduled servicing ie quarterly inspection, annual inspection etc. this does not cover any remedial work. These should be the same each year, apart from agreed rises.
4292 relates to remedial works found on scheduled service visits, i.e. battery replacement, detector replacements etc. it is also used for non-scheduled service visits. I.e. call raised by call centre, NSOs etc. It is a variable cost as it reflects non-planned work.
With regard to the calculation of costs:

  • 4296 we take the basic service contract value as provided by the M&E Team, add VAT, plus an inflationary uplift (1.2% in 2017/18).
  • 4292 we estimate these costs out by taking the annual forecast of total spend by L&Q across all sites for Fire Protection Equipment and Emergency Lighting, and subtracting the total values of the 4296 costs worked out above. We take the resulting net amounts and divide these by the total number of properties that benefit from each service. This gives as an average unit value which we use as the basis of our service charge estimates. In 2017/18 the values approximate to £36.00 per property for Fire Protection Equipment.

Bulk Refuse Collection (4364)
On some estates we include a cost for the collection and removal of bulk items which have been fly-tipped.
Your local authority is responsible for the regular collection of household waste. However, they will not collect items that are fly-tipped, or otherwise not stored correctly in the appropriate bins. When this happens, L&Q as your landlord will step in and arrange for a specialist contractor to remove the dumped items.

We recover the costs that we incur from residents as it is a service from which everyone benefits. Where we are able to identify the perpetrators, we will charge them individually for the cost of bulk refuse removal. However, it is not always possible to do so, and on those occasions we will add this as a communal charge.

Communal Refuse Bin Hire (4362)
Depending on where you live, your local council may charge for specialist refuse containers in your communal bin store. L&Q hires the bins from the local authority, and we then split the cost between the residents who have access to them.

Water Testing (4432)
We have included a new service to some estate this year. This service has been put in place to cover the regular testing of the water supply we carry out at your block. This testing is a Health and Safety requirement. We have always carried out this service as part of our obligations under the terms of your lease, but in previous years the cost has been met by L&Q due to an oversight.  We will not be recovering the costs of previous years, however, the costs are recoverable from you as part of your service charge and will be included in future estimates to you.

Disabled Adaptations Servicing and Maintenance (4785)
The costs under this heading apply to the servicing and maintenance of the equipment provided to your property. In previous years, L&Q have absorbed much of the costs due to an oversight. We have reviewed the costs for the upcoming year and so if you have any equipment in your home which falls under this category, your service charge will reflect this. Depending on your circumstances, you may be entitled to financial support which may be used towards the equipment in your home.

Variable service charge deficit

If you pay a variable service charge, you should have received a final service charge statement for the year ended 31 March 2016. The statement showed a year-end balance, which was either a credit in your favour or debit to pay. If the balance was a credit, we have already applied this to your L&Q account. If you had a debit balance, we will bring this forward to the 2017/18 year and spread the cost across 12 months from April 2017.

This method of payment enables L&Q residents to settle the outstanding amounts interest-free, in an affordable way. If you have a deficit balance to pay, it is itemised on the first page of the notice we have sent you.

Service Charges for Secure tenants

Service Charge is set by the Rent Officer every two years when we register your fair rent. You have 28 days to appeal the service charge when you are issued with the new registration form, otherwise it will remain fixed until your next registration. If you have a variable service charge under your secure tenancy, we will still issue you with a final statement each year. However, if there is a balance to pay, we will not collect it from the following April. Your service charge will be adjusted on the next occasion your fair rent is registered.

Withholding Payments

As a Leaseholder the terms of your lease agreement will include a requirement for you to pay a service charge.  As per the Summary of Tenants Rights and Obligations, you are only able to withhold payment if we have not provided you with a copy of the summary.  We provide this at the time of serving our estimate and actuals to you and therefore any non-payment would be a breach of the terms of the agreement.  
If you own the freehold of your property, you may still be required to pay a service charge in accordance with the legal transfer completed at the time of your purchase to contribute towards the services we provide to the estate on which your property is situated. If you have not previously received any charges, please refer to your transfer agreement as this will outline your obligations.

If you have any queries about the service charges due at your property, please contact us as follows:

In writing: L&Q Direct, Cray House, 3 Maidstone Road, Sidcup, Kent DA14 5HU
Telephone: 0800 015 6536 (Option 2, then Option 1) our office hours are 9.00 to 5.00. Monday to Friday
Website: www.lqgroup.org.uk
Email: homeownerservices@lqgroup.org.uk

Should you be unhappy with the quality of the services you receive, and we are unable to resolve your query, you may log a complaint via the L&Q website. Our Customer Relations Team will work with you to resolve the issue as soon as possible.

If we are unable to resolve your complaint, you may contact the Housing Ombudsman via www.housing-ombudsman.org.uk or on 0300 111 3000. Please note that the Ombudsman will only be able to deal with your case if you have exhausted our in-house complaints process. You may also contact the Citizens Advice Bureau for further guidance: www.citizensadvice.org.uk

If you are a leaseholder or shared owner, you can contact the Leasehold Advisory Service for impartial advice about any matters regarding your lease and service charges. Their website has a whole range of useful and relevant information.  The information includes details on how to make an application to the First Tier Tribunal (Property Chamber), which is the ultimate body who can decide on the reasonableness of a service charge.