Service charges

What are service charges?

Some Melin residents will pay a service charge in addition to their rent. The service charge covers things such as the cleaning of communal areas, maintenance of lighting and security systems, and upkeep of communal outdoor areas.

Residents who live in a sheltered housing scheme or in extra care properties will also pay towards the cost of their Scheme Manager or Independent Living Co-ordinator.

Melin Homes does not make a profit from service charges.

What your service charges pay for

The following information explains what your service charges pay for.

Communal utilities – electricity and water

This covers the cost of providing electricity in communal areas. This is normally in stairwells and entrance ways in flats but can also include external lighting in car parks. certain bin stores or street lighting. It also covers the cost for any water and sewerage services that we pay for in communal areas.

Communal cleaning

This is to cover the cost of the cleaning service we provide to internal communal areas.

Window cleaning

Depending on the contract in place, we arrange for an external contractor to clean communal or individual windows in high rise blocks of flats.

Communal gardening

This covers the cost of cutting grass and looking after other garden/estate shared areas maintained by an external company. This may not be the grounds directly surrounding your property.

Grounds maintenance

This charge covers the cost of grounds maintenance outside the regular contract, such as gritting or removal of large amounts of rubbish or if we need to maintain or remove any trees. Just because you cannot see a tree directly outside your property, you will still need to contribute towards this charge.

Door entry

This covers a contract and repairs for all door entry systems.

Firefighting equipment

For areas that have communal fire extinguishers, this covers the cost of repair. replacement and servicing of equipment. In some cases, this can appear within the fire/smoke alarm maintenance service.

Fire/smoke alarm maintenance

For properties that have a communal connected fire alarm system, this covers the cost of annual servicing, weekly testing as required by law, and maintenance of the system. This can also incorporate dry risers, automatic operating ventilation systems and emergency lights.

TV aerials/satellite

This covers the cost of servicing and repairing communal aerial systems.

Hard wired alarm/call system

This charge covers the monitoring of the communal system. This can also cover any lifelines or alarm support.

Management charge

This fee is to cover our costs in sourcing contractors to undertake the work needed and in managing the contractors who do the work for us. We do not make a profit from service charges.

Why service charges can change each year

Service charges are calculated in accordance with your Occupation Contract or Lease.

All our service charges are known as variable charges as the costs can go up and down every year. This is because the costs we must pay to maintain your home go up and down as well.

How they are calculated

Service charges are produced by reviewing the costs for the previous financial year and forecasting the costs for the current year.

A comparison is made between the actual cost of delivering services and the estimated cost charged. Where the actual cost is higher or lower than the estimate, this is carried forward to the forecasted costs for the next year.

A variable service charge is applied to your account at the beginning of April, following an estimate made in September of the expected cost of delivering services over the next financial year (from 1st April to 31st March). This is then broken down to weekly/monthly payments throughout the year.

Residents receive service charge accounts pack including:

• Service charge schedule
• Service charge booklet
• Sinking fund accounts
• Audit report (retirement for sale only)

Where you can find info about your service charges

Service charges and how they are calculated are detailed in your Occupation Contract when you become a Melin resident. All of our service charges are known as variable charges so the cost may change from year to year. As actual costs may vary year on year, so too may your service charge.

Every September, Melin will produce a service charge statement which will detail your service charges for the coming year. This will be made available on your online account.

Will Housing Benefit or Universal Credit cover the costs of your service charges?

There are some service charges that will be covered by Housing Benefit or Universal Credit these are known as eligible charges.

Housing Benefit

For a service charge to be eligible the Council must consider that they are necessary for you to be able to live in your home and that they are not too expensive.

Costs that are generally considered eligible include the cost of a scheme manager, communal cleaning, communal lighting and grounds maintenance. Your local Council Housing Benefit Team will be able to give you specific advice on what is eligible and what is not.

Universal Credit

For a service charge to be eligible the Department of Work and Pensions will assess which costs are eligible. You can speak to your work coach for more information.

What is a sinking fund?

Some large and expensive items, such as a lift or door security system, need to be replaced from time to time. We know that people can’t just find a large amount of money to pay towards the cost of these major works at short notice.

If you live in a leased property we may make a small regular charge and put these funds into an interest receiving account until the funds are needed. We call this a sinking fund. If you pay into a sinking fund you will receive a statement explaining how much money we have collected, what interest has been earned and details of any money spent.

If you are a tenant, major repairs will be funded by Melin and you will not have sinking fund on your annual statement.

What is a management company cost?

On some of our newer estates, the company that developed the site, from which we bought your home, provide services to the whole estate through a management company.

These services often include grass cutting, road maintenance or street lighting costs. We will receive a bill from the management company appointed by the developer, and we will in turn split these costs amongst our residents who benefit from the charge.

This would also apply to those who live in one of our Homebuy properties where we retain a financial interest in the property.