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Home > Housing > Leaseholders > Service charges

Service charges

Service charge

When a flat or maisonette is purchased under the Right to Buy scheme or on the open market, the council is still responsible for the upkeep of the structure, exterior and communal areas of the block and for providing services.

As a leaseholder you have to pay a share of the cost of these services, called a service charge.

Service charges are paid to the council to cover your share of the cost of managing, maintaining, repairing, insuring and providing services to the block or estate you live in.

Ground rent 

Leasehold is a special form of tenancy and is subject to the payment of a rent (which may be nominal) to the landlord.  Ground rent is a specific requirement of the lease and must be paid on the due date. 

Service charge loans

If you are a leaseholder of a property purchased through Right to Buy, you may have the right to a loan for service charges for repairs that we have carried out.  

To qualify for a loan, the following conditions must be met: 

  • Your lease must not be more than ten years old 
  • Your total service charge bill must be more than £2,640 in any one year
  • You may borrow the amount by which the service charge for the accounting period exceeds "2,640, but you may only borrow in respect of charges for repairs.  The amount of the loan must be between £880 and £35,1000 (all these figures are subject to change) 

The loan must be for repair and maintenance charges - loans are not available for improvement work, ground rent, management charges or other regular annual charges.

When we send you your annual service charge bill, we will tell you if you have the right to a loan. You then have six weeks to apply for a loan. 

If you are entitled, you will have to repay this loan over a period of three to ten years (depending on the amount you borrow).