Calculation of the charges

The question of what leaseholder charges may be made then depends on various factors, differing often between neighbouring leaseholders as well as schemes or blocks. The main element involved is the lease agreement itself.

Where consultation may be carried out, it depends on the terms and conditions of the lease whether or not a charge may be made to the leaseholder. This can vary from lease to lease, but in general repairs to the block or estate may be recharged. In the vast majority of lease agreements held by The Royal Borough, there are three inter-linked sections to look at to establish this:

1. Clause 3, sub-clause (ii) – which is normally located around a third of the way into the lease agreement – states that the leaseholder must pay a service charge for the services provided by the landlord as listed in the 5th schedule of the lease.
2. The 5th schedule is usually the last part of the lease agreement. Apart from the first part, the remaining parts of that schedule refer to the outside areas of the block or estate and to management costs. The first part, however, states that the service charge must be paid in conjunction with the landlord fulfilling its duties as laid out in clause 4, sub-clause (ii) of the lease agreement.
3. Clause 4, sub-clause (ii) is also about a third of the way into the lease agreement and lists the various obligations that the landlord has. These will include the repair/renewal/replacement and maintenance of various parts or areas of the block/estate, and should include all of the types of work that major works schemes will contain. You will see that it also includes (normally) the installation of entryphones and communal TV aerials. The installations are usually the only “improvement” that can be recharged to leaseholders.

The works included in the scheme are compared to each lease individually to ensure that they match clause 4, sub-clause (ii) and/or the 5th schedule.