Staff at Solitaire answer many questions from both freehold and leasehold owners regarding the properties which we manage. The questions below are those that are most frequently asked. We hope that by providing you with these answers it may save you the time and the inconvenience of having to telephone us.
- 1. I have just purchased my property, and I'm not sure why I have been sent an invoice from Solitaire Property Management Co Ltd?
- 2. The End of Year balancing charge relates to a period before I purchased the property. Do I have to pay it?
- 3. Why have my charges increased?
- 4. I want to change the address my invoices and statements are sent to?
- 5. I am the owner of this property but the invoices and statements you have sent are not in my name?
- 6. If I am selling the property in the near future, do I have to pay the charges in full?
- 7. Can I pay my charges by monthly direct debit or standing order?
- 8. Have you received my payment?
1. I have just purchased my property, and I'm not sure why I have been sent an invoice from Solitaire Property Management Co Ltd?
Answer : Your solicitor should have informed you that the property you have just purchased is subject to some of the following charges. As Solitaire Property Management Co Ltd is the appointed managing agent for your property or estate, we have the responsibility to collect these charges. The types of charges are summarised below :
Flats / Apartments
- GROUND RENT - Leasehold properties are all subject to this charge, although in some cases the charge may effectively be nothing i.e. a peppercorn. Your lease will contain details of the ground rent amount and any review dates. If you do not have a copy of your lease, ask your solicitor or mortgage provider to provide you with a copy.
- SERVICE CHARGES - Blocks of flats or apartments are provided with a number of services from gardening and cleaning to buildings insurance and general repairs etc. The actual services are detailed within the lease and shown, in general form on the annual estimate issued each year. The costs of these services are described as 'service charges' and will vary from year to year. The percentage you pay towards the total cost of providing these services is set out in your lease and is normally due for payment (dependant upon the lease details) on a yearly, half yearly or quarterly basis but in advance of those services being provided. The amount of service charge that is invoiced has been based upon an estimate. That estimate considers the likely costs of providing the services to your property for the forthcoming year.
- SERVICE CHARGE ADJUSTMENT OR BALANCING CHARGE - Within 6 months of the account year end, an account of the actual expenditure should be produced. This account will show how the actual costs differ from the costs anticipated in the estimate. The difference between actual and estimated expenditure is known as the service charge adjustment or the balancing charge. It can, of course show either an underspend or an overspend. In the event that there is an underspend your property account will receive a credit but in the case of an overspend you will receive, with the copy account, an invoice for the extra sums due.
- RESERVE FUND CHARGE - This is a separate fund used to spread the cost of major repairs and planned maintenance to your property or estate over a longer period of time. It cannot be used simply to 'balance' overspend on the service charge account. Its purpose is to spread anticipated major costs over a period of years. It is collected at the same time as your service charge and is usually set at the same percentage as that for the service charge.
Freehold Houses
- FIXED RENT CHARGE - Although your property may be a freehold house, it is still subject to certain charges. The fixed rent charge forms the basis of the contact between the freehold house owner and the owner of land (rentcharge holder) to which services are provided. This land may consist of open areas of landscaping within a housing estate or simply be a small parcel of land with a water or sewage pumping station serving a number of properties. The detail of the services will be contained in the contract which is termed a 'Deed of Estate Rentcharge'.
- VARIABLE RENT CHARGES - Variable rent charges are, in essence, the same as service charges described earlier. The amount individual house owners are asked to pay is, once more, based upon an estimate. The percentage house owners contribute is set out within the rentcharge document usually appended to the title deeds to your property.
- RESERVE FUNDS AND BALANCING CHARGES - Please refer to the earlier passages.
2. The End of Year balancing charge relates to a period before I purchased the property. Do I have to pay it?
Answer : Yes. As part of the contract of sale there should have been an agreement that the previous owner of your property would still be liable for a proportion of any balancing charge. Indeed, the Solicitors that acted for the previous owner may have kept back a sum of money from the sale (a retention) to cover this additional charge. We recommend that you contact your solicitor as soon as you receive our invoice in order that any recovery of monies due to you can be made.
3. Why have my charges increased?
Answer : It may be for any number of reasons.
The cost of providing maintenance services to your property or estate is assessed annually but is initially based upon our knowledge and experience with other similar properties. In future years we have the benefit of actual expenditure but even so there are some matters that are impossible to accurately predict. The costs of repairs in one year may be minimal but may be quite substantial in the next year. Additionally, we may have to take into account outside influences such as changes in Government legislation which have recently led to substantial increases in the costs of providing management services generally.
That aside, it is often difficult to accurately predict the levels of expenditure in the first year or two of a new development. As a consequence there may be increases in the costs of providing certain services for the first few years until the development is completed.
Of course, the contractors who provide services to your property will normally increase their prices yearly to cover their inflationary costs. Specifically, and following September 11 2001, insurance companies, having regard to global climate changes, the increase in personal injury claims etc., have had no option but to review insurance premiums irrespective of specific claims made under buildings insurance policies. In most cases this has lead to large increases in premiums.
4. I want to change the address my invoices and statements are sent to?
Answer : Please write to advise us of any change of correspondence address.
For legal reasons we cannot accept such advice over the telephone. You must write to our administration department who will then make the necessary amendments.
5. I am the owner of this property but the invoices and statements you have sent are not in my name?
Answer : Please contact us.
The ownership of most properties is recorded at the Land Registry. There are often restrictions to prevent registration without a certificate from the freeholder (or in the case of freehold houses, the rentcharge holder). The intention being to safeguard the interests of a new purchaser from inherited arrears of service charge. If you contact us we will advise you if your Solicitor has applied for a certificate or not, and if there are any matters that are preventing the issue of a certificate.
6. If I am selling the property in the near future, do I have to pay the charges in full?
Answer : Yes.
You should pay all of the charges due on the property prior to any sale taking place. To protect the purchaser's interests, their solicitor must establish that there are no debts outstanding on the property. Part of the usual pre-sale enquiries that solicitor's make, is to ask if there are charges due or outstanding against the property. If you have not paid in full it will, in most cases, delay completion of the sale of your property. Your own solicitor will apportion any money due back to you in the final completion statement.
7. Can I pay my charges by monthly direct debit or standing order?
Answer : Regrettably, no.
At present we cannot offer these types of payment facilities but we do take payment from most major credit and debit cards. There is an additional surcharge of 6% that is applied to credit card payments.
8. Have you received my payment?
Answer : At peak times it may take a few days from the time you send your payment to the time we allocate it to your account. Please allow at least five working days before phoning to see if we have received your payment.
