Challenge to the Service Charge Estimates for 24/25

We have been challenging the charges made for 22/23 and based on that learning have started to challenge the new estimates.  Here are a few headlines of the areas of concern with the estimates:

• Estate Electricity Charges: An error has been carried forward where we are being charged for the electricity to the ELE/Equans plant rooms on the estate.  The correct figure for the year should be just under £4,500, not the £27,000 shown in the estimates/rent demand.  This means a saving of around £25 per property. 

• Estate Caretakers: This has risen from from £115K for 22/23 to £125K for 23/24 to to £193K for 24/25.  We have challenged L&Q to break this down; they have yet to provide an answer.   We have demanded better gardening provision and might expect costs to be higher for 24/25 from prior years.  L&Q have accepted that the number is too high and have promised to justify their numbers.  We will not let them off the hook.  Again any saving will be split across 880 properties.

• Tree works:  Estimates contain a line item for around £20,000 for tree works.  We don't trust them on this and have asked for a breakdown of the expected work - we are chasing L&Q to ensure that the trees are loked after so we would expect a cost.  Note replacement of dead trees from last year and the small/scrawy specimens that were planted is a separate topic and we expect to get that issue for free.  if there is a saving (or perhaps additional cost) it would be split across 880 properties.

• Fire Risk Assessment:  New, post Grenfell building regulations came into force last year.  New signage, new fire safety checks and documentation are the result.  These are mandatory actions but we are not really able to investigate the accuracy of the charges.  At first sight they do not seem unreasonable.

• Building Insurance:  This is paid by all Leaseholders and Shared Owners (not Housing Association tenants).  Its cost per property for 124/25 is £400 per year, a significant increase on last year.  We are conducting an ad hoc benchmarking activity against other apartment blocks - £400 per year, unfortunately, seems to on a par with other leasehold building that we have checked so far.  That said we are waiting to see the building insurance charge for Burnell House as that would provide a strong comparision to other blocks on the estate.  L&Q have provided a FAQ on the rise insurance premium.

How do we get the money back? (mostly we have not paid it yet - but its the principle that we are concerned with here)

• If you are a Variable Service Charger payer (i.e Freeholder, Leaseholder or Shared Owner) it seems that L&Q would want to adjust the numbers on reconcilliation i.e we pay during 24/25 as per the estimates and the reconcilliation in September 2025 will reflect the correct numbers.  Perhaps this is OK given the smallish numbers concerned but as a principle we are not comfortable with this.

• If you are a Fixed Service Charge payer then there is no reconcilliation and so rebat or additional charge if L&Q got the estimate wrong.  We can clearly see errors and it would be wrong for L&Q to attempt to hold to some of the figures they have estimated.  We already have agreement that your rent account will receive a credit for the estate electricity electricity and will fight on your behalf to have other items credited when we have the evidence.  L&Q seem to be reluctant to change the estimates but any saving will come to you as an upfront payment into your rent account - so you will get the money up front.  You should have already received a payment of around £25 to your account - if not let us know.  If you want to download the funds you can do so on line.