What is Leasehold?
It is a legal agreement with the landlord (often known as the ‘freeholder’) called a ‘lease’. When you become a leaseholder you have essentially bought the exclusive right to live in your property for a fixed number of years (“the Term”, this can be anywhere between 100 and 999 years). When the lease comes to end, the ownership of the property returns to the freeholder, unless you agree on an extension. Almost all ‘owned’ flats in England and Wales are leasehold.
When you purchase a flat, you don’t actually own the bricks and mortar or the land on which it is built; you have bought the right to live in the property for a long time. The lease will tell you what your landlord must do, the services that must be provided, the amount you must pay for those services and what you can and can’t do. The wording of leases can vary from property to property, so it’s important you familiarise yourself with it’s content.
The ownership of the bricks, mortar or the land as well common parts of a building containing flats is usually retained by the landlord or freeholder. The obligation to maintain these areas sits with the them, however they also have the right to recover the costs from you, which are usually in the form of a service charge, all of the leaseholders have a collective responsibility for these shared costs.
What is a service charge?
As the ownership of the bricks, mortar or the land as well common parts of a building containing flats is usually retained by the landlord or freeholder, this means they have the obligation to maintain these areas but they also have the right to recover the costs from you in the form of a service charge. The service charges are there to cover the cost of maintaining the structure of the building, the common areas and of any services provided. These include but are not limited to; maintenance and repairs, cleaning, lift servicing, gardening, on-site staff, utilities, buildings insurance, managing agent’s fees, and any other service provided under the lease agreement. Service charges cover the actual cost and provide no profit. Your lease will outline what your service charge covers, when they are due for payment and how they are accounted for.
Most leases state that a budget should be produced at the start of the service charge year. This is an estimate of what is likely to be spent during the course of the year and is prepared by us as the Managing Agent, Residents’ Management Company or landlord; depending on the lease. The amounts you pay will be a proportion of the total budget minus the forecast costs to run your building in the next financial year. Your lease will set out what percentage you are responsible for and the frequency of payments.
At the end of the service charge year, accounts are produced to show how the money has been spent and whether it was higher or lower than the original estimate in the service charge budget outlined at the start of the year. The lease will also explain how we manage an over or underspend.
What is Ground Rent?
When you purchase a leasehold flat, you purchase the right to live there for a given number of years (“the term”). Ground Rent is charged by the freeholder (landowner) as rent for the land on which the block is built. The amount of Ground Rent payable, will be set out in the lease. It may be annually, half yearly or quarterly.
The lease will also set out how the Ground Rent is to be increased over the period of the term, these are referred to as rent reviews.
What is a balancing charge?
An overspend is accrued if the service charge accounts at the end of the financial year find that more money was spent throughout the year than originally forecasted in the service charge budget. This results in additional invoices to all leaseholders/flat owners who need to contribute towards this overspend. The balancing charge is the difference between what you paid under the forecasted service charge and the actual amount spent.
Your lease will say what your contribution towards the service charge expenditure is. We will send you a letter along with the overspend invoice which explains in detail breakdown of the additional charge.
If the actual money spent throughout the year is lower than originally estimated in the service charge budget, this is known as an underspend. Your lease will state how the underspend should be dealt with. Usually, by crediting the leaseholder’s service charge account.
What is a reserve fund?
For every service charge you pay, a portion of the money goes towards the reserve fund. The two funds are different however, the service charge you pay goes towards the day-to-day running costs of your block or estate and is used to cover items such as maintenance, repairs, gardening and communal facilities.
The reserve fund is collected to help contribute towards the cost of future non-annual costs like external redecorations, internal redecorations, carpet replacements or a lift replacement. Having money in your reserve fund means that when large projects like these come up there’s already money set aside to help fund them.
What is a levy and why am I being charged for it?
Levy is an interim request for money to cover unexpected expenditure in relation to the management or safety of the building that has not been originally budgeted for and cannot be funded by the reserve fund. The levy request is accompanied by the Section 20 consultation, which means that we will consult all leaseholders on the planned expenditure as well as the process of choosing the contractor.
Can I pay the levy via a payment plan?
We only offer monthly payment plans for the service charge invoice. All other invoices will have the terms to pay listed on them.
What is the tenant portal?
The tenant portal is a platform which gives you access to services and information relating to your leasehold flat.
You can register for access to the tenant portal here
- Once registered, you can access your tenant portal
- Select ‘Leaseholder Login’ before entering your login details.
- The following documents can be accessed via your portal:
- Annual budgets
- AGM minutes
- Insurance documents and policies
- Financial documents e.g. invoices, statements etc.
- Service charge accounts
- Fire risk assessments
- Management agreements
- Building specific information (where applicable)
Where can I find my service charge balance?
You can find all information in relation to service charges in your online tenant portal. Please see the section “what is the tenant portal” for access details.
Once logged in, please select the ‘History’ tab to show a breakdown of all payments. If you wish to make a payment you will then need to select the ‘Make a payment’ tab.
How do I make a payment for the service charge?
You can make a payment via the online portal, by standing order or BACS transfer. The bank details and unique customer reference number you will need to make a payment can be found on the front page of your invoice. All invoices can be accessed via the online portal.
Once you have logged in, select the documents tab and then your name. You must use the customer reference as your payment reference so we know which account to allocate the receipt to.
Don’t forget to make sure you set up equal payments to clear the balance.
Can I spread the cost of my service charge and pay monthly?
We offer the monthly payment service as a goodwill gesture to help our customers manage their finances but we can only offer this if your service charge account is up to date with no outstanding arrears. As long as your account is up to date and you set up equal instalments to reach the property bank account by the 10th of each month, we are happy to offer monthly payment terms. If your statement shows you have a previously outstanding balance, a one off payment must first be made to bring the account back up to date before a monthly payment plan can be setup.
You then must send an email to the property team using the email address on the invoice to confirm what date a monthly standing order has been set up for. Only then can we note this on your account to ensure you do not receive reminder letters chasing the full invoice payment.
Has my payment been received?
All payments received will show on your statement which can be found on the tenant portal. Please allow a minimum of 2 days for us to process these payments. If you believe there is a payment missing or an issue with your statement, please contact your property team via email providing details of the payment so we can look into it for you.
Can I change the date of my direct debit payment?
Yes, please send your request to our credit control team via our customer portal here.
When trying to make BACS transfer, the account name and number couldn’t be matched?
The bank we use is not registered with all other banks for the approval software which is why you are experiencing this issue. You should be able to proceed with the payment anyway, this should be only a warning message to ensure that your bank is not taking any responsibility for the transaction. If you click “Ignore” on any similar option, you should be able to proceed. If not – please contact your bank.
Why have I received a payment reminder despite already making the payment?
It can take up to 5 working days for the payment to show in our bank account, however you can log in to your tenant portal and select the ‘Balance due’ tab to show the accurate balance due and the breakdown of all payments.
I have not received my invoice/email/letter?
It is very important that your contact details are correct and up to date at all times. You can check your details by logging in to your tenant portal.
We sold our apartment but we are still receiving service charge invoices, what do we do?
If you have sold your property but are still receiving service charge invoices, our legal team will be awaiting information from your solicitor. To be able to update our system to show that the property has been sold, the lease requires that the Management Company is served with the completion documents. Could you please get in touch with your solicitors and chase the completion documentation?
What does the insurance cover?
The building insurance covers the repairs for the fabric of the building if it is damaged by the insured risks, e.g. fire, storm, flood or subsidence. There is a different insurance excess for the different types of damage, e.g. a building with a history of subsidence or leaks will have a higher excess amount. The insurance for the building must cover all risks as stipulated in the lease. You can find the insurance certificate or/and the building policy schedule on your tenant portal.
Building insurance does not replace the need for the contents insurance for individual apartments (e.g. damage to fixtures and fittings is not covered under the buildings insurance if the leak originated in your flat). It is the leaseholders responsibility to ensure their own flat is adequately insured.
What is the Insurance excess?
Insurance excess is an amount of money that the insurance provider charges in the event of a claim. There is a different insurance excess for the different types of damage, e.g. a building with a history of leaks will have a higher excess amount.
How does the insurance excess work?
If there was an issue which caused damage to your flat e.g. a leak, and the cost of damage to your apartment was £2500.00 and the insurance excess for the leak was £500.00, you would be able to recover £2000.00 if the damage originated within your apartment.
Sometimes the insurance excess amount exceeds the damage costs, in which case it would not be beneficial to claim against the insurance. On other occasions, the damage costs are only slightly higher than the excess amount in which case it would not be beneficial to claim through the building insurance because this will increase the insurance premium and the excess in the future.
Why is insurance billed separately?
The insurance is sometimes billed separately from the service charge, if it is stipulated within your lease.
Could I please have a copy of the insurance quotation? How do we know you have provided us with the insurance cover that offers the best value for money?
When arranging the insurance cover, we deal with insurance brokers who provide us with three quotes from different providers. The lease will say what risks the building needs to be insured against. If you would like to see a copy of the insurance quotation then please contact your Property Manager directly.
What is your debt collection process?
Stage 1 – We will send a first reminder if we have not received the payment within 14 days of the date on your invoice.
Stage 2 – We will issue a final reminder via letter if we don’t hear from you within 7 days from the date on your first reminder. Fees will be incurred at this stage.
Stage 3 (Legal stage) – If we don’t hear from you within 7 days from the date on your final notice, we will send the debt to our solicitors to chase. Further fees will be incurred at this stage. After this stage the account is handled by the solicitors until the arrears are collected. Glide team members cannot discuss any financial issues related to your account during this stage.
You can see a copy of these reminders by logging in to your online portal.
Why have I been sent to debt collection?
Once your overdue account is passed to solicitors to chase, we are unable to discuss any service charge or debt queries. You will need to get in touch with the solicitor to discuss any questions or queries you have, including if you dispute the arrears. The solicitors will have contacted you directly.
I cannot afford to pay/I am behind with my payment plan. What do I do?
Please raise a ticket via our customer portal and a service charge accountant will be in touch to assist you.
You can find the details of how to get in touch with your property manager on the notice board within your building or you can call our customer support team on the details above, who will be able to tell you the best way to get in touch with them.
App: If you know your Property Managers name then you can send them a direct message via our app or tag them in a comment (@propertymanagername). If you do not know their name then please either send a direct message to our customer service team via the app or use the above contact information for them.
If you aren’t already registered to our app then please click HERE to get started.
What is the security check?
At the beginning of each phone call and occasionally via email communication, we need to check you are the account holder to ensure we don’t release confidential information.
You will need to answer 3 security questions, for us to be able to talk to you. If you fail one question, we will ask you an additional security question.
If you fail the security check, unfortunately, we won’t be able to help you over the phone and we’ll ask you to put your enquiry in an email to us.
It is important your contact details are up to date, you can check the details we hold for you on your tenant portal.
How do I let you know if I am not happy with how my enquiry or issue has been dealt with?
We pride ourselves on giving a professional service to all our customers. We welcome you to tell us if things go wrong so that we can ensure we get it right next time. Please put any comments you have in writing, either by letter or email. We will acknowledge receipt and respond in line with the timescales and stages set out in our complaints procedure.