Sometimes terms, words, and phrases can get confusing. So we have written an extensive guide and breakdown of helpful terms and definitions:
1. Staff Employment – The full costs of any staff we employ locally who work exclusively for your development, such as Development Managers, concierges, handymen and cleaners. This category covers their salaries and Employers’ National Insurance Contributions, holiday cover, sickness cover, provision for pensions, employee benefits and any other costs related to employment (for instance the recruitment costs of advertising the position). It also includes:
- a. Any costs payable to the Landlord for site offices or for dedicated accommodation for staff who live at the development as part of their role (e.g. Retirement Development Managers).
- b. Any business rates payable to the local authority, together with any Council Tax that may fall due for empty staff residential facilities (any staff actually living there will pay this themselves).
- c. On-site costs such as uniform, equipment, and office costs where an on-site office is in situ.
2. Out Of Hours Emergency Support (Monitoring Service) – Most property developments have access to an out-of-hours support line, to report any emergency repairs which may be required, such as leaks. The cost of which comes under the accounts heading known as Monitoring Service.
For retirement living sites, the service is part of a comprehensive 24-hour emergency monitoring service, to ensure your continued safety at home.
3. Insurance – The cost of insuring the buildings plus any other the communal areas and facilities, such as the grounds and lifts (if applicable) – please note that it does not cover the contents of your own home – see our home contents page. Cover is placed either by the Landlord or is arranged by ourselves through our insurance business, which is fully FCA-regulated.
The level of cover is always based on the full cost of reinstatement, which requires periodic independent revaluations to ensure that it remains adequate. To fully protect yours and the landlord’s assets, cover also has to be provided for public liability and employer’s liability (to protect against any claims arising from injury, for example) and risk of terrorism. Where applicable, it may also include cover for lift breakdowns and staff sickness (so that relief cover can be provided if essential staff are unavailable).
4. Electricity – Is provided to areas that require it for services to be provided, whether it be for on-site staff offices, interior and exterior lighting, door entry systems, car park gates etc, including metering and VAT.
5. Gas Supply – For communal water systems and heating, including metering and VAT. Some developments have additional feeds into individual homes for private usage which may also be managed by us, but these are charged for separately outside of the service charge.
6. Water & Sewerage – Sewerage and drainage for sinks, laundries, toilets and garden taps.
7. Communal Area Cleaning – Periodic cleaning of lobbies, hallways, stairs and carpets, plus any other shared facilities (e.g. lounges, kitchens, lifts and bin stores), which is either contracted out, or carried out by cleaners employed by the development. See our maintenance and repairs – internal pages.
8. Window Cleaning – This covers the costs of regular internal and external cleaning of windows in the communal areas only, unless your deeds specifically allow for the external cleaning of your individual property windows to be paid through the service charge too. See our help page about Windows.
9. Grounds Maintenance – Regular gardening and landscaping carried out under contract by suitable suppliers and occasional procurement of specialist services like litter clearance and tree pruning.
10. Lift – Covering all lift maintenance costs, ad-hoc repairs and the lift telephone, plus the maintenance costs of any communal stair lift facilities. Please note that annual lift maintenance contracts include regular safety inspections and emergency call-outs, but not the cost of any parts needed. See our help pages about lifts.
11. Fire Protection Maintenance – Regular fire safety inspections, maintaining and servicing any fire extinguishers, smoke detectors, fire safety panels, dry risers, automatic opening vents and automatic doors.
12. Door Entry Systems – Maintenance or rental of the main entrance door intercom systems and wiring leading up until the front door of your apartment, which usually comes under your own responsibility instead. See our maintenance and repairs – internal pages.
13. Gates & Barrier – The cost of annual maintenance contracts to ensure the gates are functioning correctly, plus any additional repairs required.
14. TV Distribution System – Many of our sites have a shared TV aerial system and these costs are for any repair and maintenance required.
15. General Maintenance – To fund a wide range specifically planned works/services for the year to the shared building and facilities; including checks, maintenance and repairs to: (where applicable):
- a. Roofs, drains, gutters and plumbing
- b. Electrical repairs
- c. Plumbing repairs
- d. Lighting repairs and lightbulb replacement
- e. Fencing, furniture and other ad-hoc repair costs
16. Leisure Facilities – On some developments we have a gymnasium, swimming pool and other leisure services available, which incur costs for the upkeep and maintenance of such items due to equipment risk assessments, equipment repairs, changing rooms upkeep, water and paper towels etc.
17. Plant & Machinery – Many of our sites contain shared plant and machinery items. Examples include smoke ventilation systems, extract fumes from an underground car park, booster pumps to circulate water around the building, communal heating systems, private foul water pumps and various others. We usually have an annual maintenance contract in place for these items, which requires them to be serviced on a regular basis to ensure their continued functionality.
18. CCTV – Many developments benefit from CCTV security, the costs included are for annual maintenance servicing, telephone lines and any repairs or minor upgrades required.
19. Pest Control – Some developments require annual pest control contracts to place and monitor bait boxes and pests on site. This also includes the cost of other ad-hoc pest control treatment, including bird spike installation.
20. Major Works – Specific large scale projects, such as roofing, carpeting, internal/external redecorations, fire safety systems, replacement doors and lift upgrades. A projects fee may apply due to the added costs involved in the professional management of complex projects, including the use of our specialist Major Works team and/or qualified surveyors, plus the formal consultation and tendering processes normally required by law. Any fees applicable will be clearly explained as part of the consultation process before any work is commenced. See our major works pages.
21. Contribution to Reserves – We build up a prudent sinking fund over time to help pay for any major works expected in future that cannot be claimed from either insurance or service contracts. This also helps to reduce the risk of large additional bills and delays caused due to insufficient funds being available when needed. The levels of contributions are determined by any requirements set out in the deeds (such as a specific frequency for redecoration, with money collected usually then held in a separate, dedicated fund) and expected lifecycles for all major assets.
22. Linked Site Charges – On occasions, costs may arise for services required on another site. This is usually where the development exists within a larger and separately managed development and annual service charges costs are incurred from the manager of the site. This may be where you are an RTM block, situated in the estate of another development.
23. Management Fees – Paid directly to FirstPort to fund a wide range of shared activities to effectively manage all developments nationwide. It does not include any costs specific to the development itself and we benchmark it regularly to ensure it delivers good value for money. See our management fees page.
Examples include management, customer services, and support functions, travel, computing equipment, communications, regulatory compliance, procurement, and banking. HMRC require the payment to them of VAT on all management fees, which we, therefore, budget for separately.
24. Accountancy Fees – These fees cover preparing, reviewing and distributing annual accounts for your development through use of our dedicated in-house accountants. Our fee is calculated on a number of factors, including the complexity of your scheme and the number of units. We also benchmark these fees periodically to ensure they remain fair and competitive.
25. Audit Fees – The external costs incurred for formal auditing of the annual accounts by independent Chartered Accountants, where required, and to ensure accuracy of the year-end accounts by an independent external auditor.
26. Legal and Professional – Any costs incurred by the development through the use of professional experts (e.g. surveyors) or for legal advice/proceedings. Also included are company secretary and other licence fees, including lease and transfer requests.
27. Health & Safety – Keeping your home and managed areas safe and healthy to live within is one of our main priorities. The costs here can include annual health and safety fire risk assessments, lightning conductor testing, PAT testing, 5-year electrical tests, and playground risk assessments and any repair costs incurred to maintain the equipment.
28. Guest Room Income (Retirement only) – We record the full income generated by hiring the room under this heading, whether payable to the Landlord or the development’s own service charge account. Please note that, where applicable, the Landlord also reserves the right to withdraw guest room hire at any time.
29. Guest Room Costs (Retirement only) – Some developments have a guest room available for visitors to hire. This line caters for any costs incurred for maintaining and cleaning the room.