Service charge policy

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At CKH we are committed to setting and maintaining service charges at levels which are affordable to people on lower incomes, comply with legislation and regulatory guidance, and recover the costs of providing the services. This policy explains how we do this and how we communicate to you about changes to your service charges.

Our commitment to you

We are committed to ensuring service charges:

  • Are set and maintained in accordance with the Regulator of Social Housing Rent Standard for socially rented properties for residents of tenanted homes.

  • Are set and maintained in accordance with the conditions of any tenancy agreement/lease and/or other legal document for shared ownership and leasehold homes.

  • Recover the costs of services being delivered in a fair, transparent, and consistent manner.

  • Are compliant with the requirements of the Landlord and Tenant Act 1985 (and subsequent amendments) and all other relevant legislative requirements and the regulatory consumer standards.

  • Are set at levels that are affordable to residents on low incomes, represent value for money, and adequately meet the costs of providing services.

  • Are accurate and data is maintained and made available for scrutiny on request.

This policy covers all aspects of service charge setting, calculation, monitoring, and reporting on:

  • All rented homes

  • New build homes (including Affordable Rent tenancies where we cannot recover service charges)

  • Shared ownership and leaseholder homes

  • Shops.

Service charge setting principles

We aim to provide high-quality homes and excellent landlord services. In our role as a responsible landlord, we may provide additional services to our tenants, leaseholders and shared owners that are not covered by rent payments (tenants) or ground rent (leaseholders) - to recoup the costs of providing these services we will levy service charges.

This policy sets out the provisions we have in place to ensure that service charges are fair and reasonable, meet all legal requirements, and that appropriate consultation and notification takes place. The policy also covers any service charges that are applicable in the commercial shop units we own and manage.

When implementing and collecting service charges, we will ensure that we meet relevant legal requirements, in relation to the timescales and methods of consultation, if and when this is required, and the notifications given to those that receive the services provided. Any service charges for which an individual tenant, leaseholder or shared owner is liable to pay will be detailed in the relevant tenancy agreement, lease, or other legal documentation.

When calculating charges, we will:

  • Review all service charges every year.

  • Use the latest available information when we estimate service charges, including taking account of inflation or changes in the price or rates in any contracts.

  • Record costs for each scheme/block and review these to check they are value for money

  • and accurate.

  • Apportion costs in a consistent, fair, clear, and simple way between the homes which receive that service as defined in the lease/tenancy. If there is no definition of how to allocate costs, CKH will use the number of homes receiving the service.

  • Where a service is only for a particular group of homes, we will only share the cost between those properties.

  • For new build homes, service charges will be calculated in a timely manner to allow sale/rent at least four months before handover.

Some elements of service charges are deemed as eligible or non-eligible for Housing Benefit/Universal Credit. These are set out in Universal Credit and Housing Benefit legislation and are clearly laid out in the NHF Publication “Service Charges and Rent Charges.”

We will apply a fair and equitable approach to the apportionment of service charges for tenants and leaseholders, in accordance with terms outlined in lease or tenancy agreements.

To ensure all service charges are value for money, where appropriate quotes/tenders are obtained in line with contract procedure rules that are contained within financial regulations. 

Service charges for tenants

Our social housing homes are let under a range of different tenancy agreements. In most cases the tenancy agreement sets out the way in which service charges can be levied and these are variable service charges. We have no fixed service charges.

Variable service charges are based on both the actual and estimated costs of the service with any surpluses or deficits carried forward as an adjustment to the next accounting period. Variable service charges mean only the actual cost of delivering the service can be charged. Where estimates are provided, any over or under payments are collected within the next estimate.

Service charges for affordable rent and rent to buy homes

The rents on affordable rent homes are inclusive of service charges and are set in line with the rent policy. Affordable rent homes do not have a separate service charge - in some instances there may be an additional 'ineligible' charge, but this is applied as a one-off charge, not a service charge. Ineligible service charges can often be added such as electricity from a communal meter for personal use, for business rates or communal sewage works if the property is not connected to the mains drainage.

Service charges for leaseholders

Lease agreements give a detailed description of what services we can charge for, including who is responsible for structural costs. We charge the costs of services to all leaseholders where applicable.

All service charges for leaseholders will be variable and apportioned in accordance with the terms of the lease. Estimated bills will be sent to leaseholders in February, at least one calendar month in advance of 1 April, the date from which the new charge applies. In September, each year leaseholders also receive a summary of actual costs based on expenditure for the previous accounting period (April to March) - we will send this before 30 September to comply with the 18 month rule. (Where costs can only be charged within 18 months of the costs being incurred).

In the estimated charge, we will include any projected amounts for the provision of day-to-day maintenance services of communal parts. At the end of the year, we will compare the estimated cost and actual cost for the maintenance services for any discrepancies. If there are any additional costs incurred on top of the estimates provided, the leaseholder will still be responsible for paying them. If costs have been over-estimated and there is a surplus, then this may be repaid. The demand for underpaid costs will be included in the actual invoice sent no later than September for the previous financial year. Any overpayments and underpayments will be adjusted in the accounts accordingly.

Any request for payment for contributions to major works, i.e., where CKH carries out improvement or upgrade works on a block where leaseholders reside, will be invoiced to leaseholders when a programme of work is completed, and the appropriate Section 20 consultation has taken place.

Service charges for shared ownership

Lease agreements give a detailed description of what services we can charge for, including who is responsible for structural costs. We recharge the costs of services to all shared owners where applicable. 

Shared owners will be charged variable service charges and will receive an annual rent increase letter in April of each year (including a list of rights and obligations). All service charges for shared owners will be variable and will be apportioned in accordance with the terms of the lease. Estimated bills will be sent to shared owners in February, at least one calendar month in advance of 1 April,  this being the date from which the new charge applies.

We will deal with surpluses/deficits in accordance with the terms of the tenancy/lease (where this applies). Any surplus or deficit is carried forward into the following years' charges.

General principles

Variable Service Charges: Where we levy variable service charges we will estimate the initial cost of providing those services. It will achieve this using information relating to comparable schemes, accurate accounting, and analysis of spend against estimates and account for any surplus/deficit at the end of the accounting period in accordance with the terms of the lease (where this applies).

Apportionment of costs: All costs are allocated to schemes that receive the service only. Invoices should be broken down manually. With variable service charges it is not good practice to divide large contract costs by an allocation method. We will always endeavour for invoices to be broken down by scheme level by the contractor delivering the service. This would be made clear at the time of procurement (a spreadsheet breaking down the invoice is acceptable). Where a service has been received and this breakdown has not been obtained, we will allocate the cost in a fair and transparent way.

New charges: we will only introduce new or modify existing service charges when:

  • The service provided directly benefits its customers (tenant and leaseholders)
  • The service becomes a legal requirement or a health and safety requirement.
  • to the charges maintain or enhance our asset value following consultation and consent requirements.

When considering introducing new service charges or enhancing existing ones, subject to consultation and consent requirements being met, we will assess the affordability element, check if the charges are classed as 'eligible' under prevailing Housing Benefit and Universal Credit regulations and may postpone or cancel services if as a result, properties become unaffordable.

Timetable: Estimated service charges are to start from the first Monday of April for all rented properties and from 1 April for all Shared Owner and Leasehold properties. Notice of the increase/review must be received at least one calendar month prior to the new charges starting. All service charges are bound by the 18-month rule (where costs can only be charged within 18 months of the costs being incurred). Leasehold balancing statements must comply with the 18-month rule and so be received by Leaseholders by 30 September each year.

Administration charge: We will levy an administration charge to cover the costs of service charges, accounting, and management. 10% of the eligible charges are applied to all rented units. Shared owners and leaseholders pay a flat rate which is reviewed each year in line with other costs as part of the annual budget setting process.

Limiting increases: We want our charges to remain affordable, but we recognise that sometimes the cost of a service can increase for reasons that are beyond our control. Any such increases will be reviewed annually by Service Managers and on some occasions the increases may be limited subject to the approval of the Executive Director of Finance.

Value for money: In line with the regulatory requirements and good practice, we will ensure the service charges we levy achieve value for money by benchmarking with similar service providers, through competitive tendering of service suppliers and regular review. Through our approved supplier arrangements, and regular monitoring of performance and satisfaction levels, we will ensure those that provide services that are subject to a service charge are quality assured and that quality is maintained throughout contracts. 

Summary of rights: Whenever we issue a demand for payment of variable service charges to tenants and leaseholders we will provide a summary of rights and obligations in relation to service charges (in accordance with the Service Charges (Summary of Rights and Obligations and Transitional Provision) (England) Regulations 2007).

Frequently asked questions (FAQs): FAQs will be supplied to tenants, shared owners and leaseholders alongside their service charge statement to aid understanding and increase transparency. This is reviewed annually to ensure it fully explains any changes in charges and why they have occurred.

Service charges on new homes: We will make sure our service charge estimates for new developments are clear and accurate. These will be calculated four months in advance of handover to ensure that information is available well in advance for sales/rent information. Residents will have information on all the expected costs for their new home before they sign their tenancy or lease agreement. We have also developed a standard way of calculating service charges for new homes to make sure that services are set up and charged consistently.

 

Management agents: On several of our estates, management agents appointed by the original developer, deliver services to residents whether they are tenants, shared owners, or leaseholders. These services can include grounds maintenance, cleaning, maintaining lifts, health and safety checks on equipment and looking after communal areas. We manage and monitor the quality and cost of these services and charge the costs back to residents.

Shops: Shop service charges will all adopt the same principles contained in this policy and all shop service charges are variable.

Sinking/reserve funds: Contributions to sinking funds or to provisions of replacement components will be calculated using a set method that will be clear and transparent. There will be a review of all sinking funds contributions and assessment of the level of individual sinking funds to ensure prudent assumptions for future expenditure at least once every five years.

Consultation requirements: We will comply with the consultation requirements set out in section 20 of the Landlord and Tenant Act 1985 (as amended) where it intends to enter into a qualifying long-term agreement (a contract for a fixed term of more than 12 months where any one tenant must contribute more than £100) or carry out qualifying works (where the cost of the works will exceed £250 for any one tenant).

Statutory rights: Tenants and leaseholders have statutory rights to:

  • Seek a summary of the service charge account from the landlord (section 21 of the Landlord and Tenant Act 1985)
  • Inspect accounts, receipts and other documents relating to the service charge summary and take copies of these (section 22 of Landlord and Tenant Act 1985)

Payment of service charges: We will provide a number of convenient methods for tenants and leaseholders to pay service charges including:

  • Online via the CKH website, secure 'AllPay' facility
  • Over the phone
  • In person at CKH customer central
  • At any Post Office Branch using the CKH payment card
  • Via direct debit. 

Consequences of non-payment: If you fail to pay service charges when given reasonable requests to do so in accordance with the regulations it will be classed as a breach of tenancy agreement and we may take the tenancy enforcement action in accordance with our arrears policy and apply for a CCJ through the county court or forfeiture of the property where the arrears are over £35. 

Appeals: In setting service charges, we will comply with the provisions of sections 18-30 of the Landlord and Tenant Act 1985. This means that costs will be:

  • Reasonably incurred and:
  • Relates to services or works which are of a reasonable standard.

Tenants and leaseholders have a right to appeal to the First-Tier Tribunal (FTT) if they are not satisfied with the demand for payment from CKH. The FTT can determine:

  • If costs were/are reasonable
  • If works were/proposed are of reasonable standard
  • If the amount payable before costs incurred is reasonable
  • If costs are payable

We also have the right to apply to FTT before work or proposed works commence for the same determinations outlined above. The right exists on either party's behalf except where the leaseholder has previously admitted liability, the matter is subject to ongoing arbitration, or a court order has been granted.

Further information:

Who is responsible for managing service charges?

The Directors of Operations and Finance are responsible for the implementation of the service charge policy.

Legislation and regulation

This policy is written in accordance with the following regulatory and legislative requirements:

  • Landlord and Tenant Act 1985
  • Landlord and Tenant Act 1987
  • Leasehold Reform, Housing and Urban Development Act 1993 Housing Act 1996
  • Commonhold and Leasehold Reform Act 2002
  • Service Charges (Consultation Requirements) (England) Regulations 2003
  • The Service Charges (Summary of Rights and Obligations, and Transitional Provision) (England) Regulations 2007
  • Welfare Reform and Work Act 2016
  • Capital Funding Guide 2016 - Updated 2024
  • Leasehold and Freehold Reform Act 2024
  • Regulatory Framework for social housing adopted by the Regulator of Social Housing including the regulatory consumer standards.

Information sharing

Cross Keys Homes has an information sharing agreement with key agencies and contractors to share information in relation to the delivery of our services. Information shared must be relevant and the Data Protection Procedure adhered to when handling data. You can find more information about how we manage your data in our Transparency and Privacy Policy.

Monitoring and review

The Complaints Policy was reviewed in August 2026 and approved by our Resident Experience Panel in September 2025. It will be reviewed every two years - next review September 2028.