Handbook for homeowners. Everything you need to know about your new home

Transcription

1 Handbook for homeowners Everything you need to know about your new home

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3 Contents Introduction to this handbook 2 Introducing Knightstone 3 Our service promise 4 Equality of treatment 6 Your lease 7 Improvements and alterations 12 Your statutory rights 13 Living in your home 15 Sub-letting your home 18 The annual service charge and other payments 19 Your responsibility for repairs 24 Our responsibility for repairs 25 Buildings insurance 26 Buying further shares in your home 27 Selling your Shared Ownership home 28 Making your voice heard 30 Report a repair 32 Our teams 33 Contact us (appears on the back cover of this handbook)

4 This handbook has been produced for all our homeowners. These are Shared Owners, Do It Yourself Shared Ownership (DIYSO) Freeholders, and Right to Buy purchasers of properties either once owned or currently owned by Knightstone Housing Association. Everything in this handbook applies to you except where you see the following symbols: This symbol means the whole section applies only to leaseholders. This symbol means there is specific information within a section which only applies to leaseholders. This handbook aims to answer the most common questions that you may have. We aim to provide all relevant information to you, whether it is related to service charges, accounts, or repairs and improvements, at the right time and in the right way. This handbook provides general guidance and explanations. It is not intended to provide legal advice so it should be read in conjunction with your lease or freehold documentation. contact us for assistance. Contact details can be found on the back cover of this handbook. From time to time, we may update or add information to this handbook. Updates will be available through our website at Alternatively, hard copies maybe requested from our offices. We hope you will find this handbook useful. If you can t find the answer to your question in this handbook and require further information, please 2

5 Introducing Knightstone Knightstone is a Registered Provider of social housing. We manage and develop affordable homes. Where do we work? We sell and manage homes across the south west region. We provide homeownership services from our office in Weston-super-Mare. Who runs Knightstone? We provide management services to over 2,000 homeowners. Knightstone is managed by a Board of skilled and experienced people. The Board is made up of members elected at Knightstone s Annual General Meeting. The Board meets regularly to plan our work, set standards and policies and make sure that staff are providing a good service to the people we are here to help. Who does Knightstone answer to? We are regulated by the Homes and Communities Agency (HCA). They take a co-regulation approach with our Board and residents to monitor our performance and activities. For further information If you would like to find out more about us, please contact us (see contact details on back cover). Our annual report, including a summary of our company accounts, is available free of charge. from our office or you can download or view a copy at 3

6 Our service promise We are committed to providing a high quality service in all areas of our work, we will: Make it easy for you to contact us Treat you with courtesy and respect Keep you well informed Offer you help and advice Listen to your views Help you get involved Get service delivery right the first time Put things right quickly if they go wrong What you can expect from us The following standards indicate the level of service you can expect from us. Contacting us In your everyday contact with us, we will: Answer telephone calls promptly Reply to letters within five working days Respond to messages left within one working day Make sure our office is open in accordance with published opening times Provide communication in any format needed, such as a language translation Managing your lease We will: Send you a service charge statement detailing charges due and payments received Send you an annual service charge account detailing expenditure attributable to your property Visit where you live on a regular basis to make sure that communal services are delivered to best possible standards 4

7 Repairs For repairs that are our responsibility, we will: Aim to complete all emergency repairs on target Aim to complete all urgent and routine repairs on target Consult with you when major works are planned and send you appropriate notices showing the estimated costs Get involved! We will fully involve you in all areas of our work and in particular will: Produce a copy of our newsletter Homeowners News and publish it on our website Consult you in accordance with legislation where major works are planned or we are entering long term agreements (depending on the cost of the contract to you) Assist you in setting up Residents Associations (see page 30) Invite you to give us your opinions on all matters relating to services we provide Our service standards We produce and regularly update our service standards, which can be viewed on our website If you would like a copy please contact us. You can get involved through a combination of meetings s and written communications. 5

8 Equality of treatment Equality issues affect every area of our work. All members of the local communities where we work, residents, suppliers, staff and committee members have a right to be treated with fairness and equality. No one applying for housing, a job or for contracts with Knightstone will be treated less favourably than any other person or group because of their sex, racial or ethnic origin, colour, religion, disability, marital status, sexuality or age. To help achieve this, we will: Try through our policies, procedures and working practices to provide equality of opportunity regardless of anyone s sex, racial or ethnic origin, colour, religion, disability, marital status, sexuality or age Provide equality training for all of our staff Set targets in key areas and measure our progress against them Keep records of the sex, ethnic origin and disabilities of people who apply to us for jobs or housing Make sure that people who work with us, such as contractors, are aware of our commitment to equality and are willing to adopt the same principles Take account of equal opportunities issues when we make decisions about changes to our services or employment practices Act when we consider that a member of staff, a customer or someone who works with us has acted in a way which has caused unlawful discrimination or harassment Investigate and respond whenever anyone thinks we have not complied with our own procedures and have failed to provide an equal opportunity 6

9 Your lease In this section we explain the most important parts of your lease and outline the responsibilities and obligations you have as the leaseholder and we have as your landlord. Glossary of terms Listed below are some words and phrases that are commonly used in this handbook. Arrears Payments due, including rent and/or service charge which remains unpaid. Cyclical redecoration Decoration of communal areas, (external and internal) normally found in blocks of flats which are painted every five years. Communal areas The parts of the building or estate shared with others - more fully described in your lease. Equity The percentage of property owned by you or us. Freeholder A person or company who has full ownership of land and building. Ground rent An annual charge, payable in addition to any service charges. Home or property A flat, maisonette, bungalow or house including any private garden, outbuilding or garage. Lease A legal agreement which sets out the rights and responsibilities of both leaseholder and landlord. Leaseholder Someone who lives in a flat or a house who has purchased some or all of the equity and has entered into a lease. Rent Applies to shared owners or those with DIYSO properties, the annual amount payable in addition to service charge and ground rent. Your lease may refer to either gross rent or net rent or specified rent. Resale Term used to describe the procedure when you sell your home or share of a shared ownership home. Shared owner Someone who owns a share in their home, and has not yet staircased to full ownership. Sinking fund A fund that may be set up through service charges to budget for major expenditure for communal works. For example, roof repairs, lift replacement and cyclical redecoration (decoration to communal areas, usually every five years). Staircasing The process of purchasing extra shares in your home if you are a shared owner. 7

10 Legal terms used in your lease This section just explains the words used in your lease: for the full legal definitions please refer to your lease. Common parts The parts of the building which you share with other residents in the building. For example, entrance hall and staircases. Covenants A legally binding promise. Demised premises The part of the building that has been sold to you and is your responsibility. Exceptions Any part of the land which is excluded from the sale and retained by the landlord. The Law There are several laws and Acts of Parliament protecting your rights as a leaseholder. If you are not sure about your rights, a solicitor can advise you or you can contact Citizens Advice Bureau. The main legislation that covers leaseholders is: Housing Act 1985 Landlord and Tenant Acts 1985 and 1987 Housing and Planning Act 1986 Housing Act 1988 Leasehold Reform Housing and Urban Development Act 1993 Housing Act 1996 Commonhold and Leasehold Reform Act 2002 Service Charges (Consultation Requirements) (England) Regulations 2003 Housing Act 2004 Housing and Regeneration Act 2008 Reservations Rights the Landlord keeps over your home. Landlord or Lessor Knightstone Housing Association as the owner of the land and building, usually entitled to receive rent (if applicable), ground rent and service charges. Leaseholder, Tenant or Lessee You can see copies of these acts at the main libraries or on the Office of Public Sector Information s website at The person who owns the lease and has the right to live in the property. 8

11 The lease agreement Your lease is the legal agreement between you and Knightstone (in most leases this states either the Landlord or the Lessor ). In most cases, it is Knightstone who owns the freehold of the land on which your property stands. We will normally describe you as the Leaseholder or Lessee. In some leases you may be described as the Tenant. Your lease will normally, but not always, run for a period of either 99 or 125 years from the date the property was first bought from the Landlord. The exception to this is when Knightstone only owns a lease itself and can only offer a sublease for a shorter period, or if the leaseholder has had an extension to the original lease. The plan attached to your lease shows the boundaries of your property. On completion of your purchase, your solicitor will have explained how your lease works and should have given you a copy. We strongly recommend you take the time to read it carefully and keep it in a safe place. This handbook explains many of the conditions of the lease, but if you have any questions or need further advice or information, please contact us or take independent advice from the Citizens Advice Bureau or a solicitor. Main conditions of the lease You must use your home as a private dwelling only, keep the property in good repair and must not cause a nuisance to other residents. You must also make regular payments to cover the costs that we incur on your behalf. The frequency of these payments will be set out in your lease, but will usually be monthly. This includes our administration costs, buildings insurance and in some cases, the cost of providing services. Your obligations The most common terms are set out below. These may vary slightly from lease to lease. You must: Pay all service charges, ground rent If you are a shared owner or DIYSO you must also pay any rent Pay interest on all arrears at the rate set out in your lease, usually 4% above the lessor s / landlord s bank base rate Keep the property in good repair and condition (including fixtures and fittings) Allow us access to the property, if requested Make good any defects or disrepair that we inform you of within the time limit set out either in your lease or our notification Allow us access to carry out any inspections or works that we have to do under the terms of the lease Give us a copy of any notice affecting the property within one month of the date of the notice Let other leaseholders enter your property to carry out any maintenance or repairs that are necessary. This access should be arranged with reasonable notice, causing the minimum of disturbance. Any damage caused by the other leaseholder should be made good by them Use the property as a private dwelling only You must not: Make any structural alterations or additions to the property without first getting our written consent Disconnect the property from any communal heating system, without first getting our written consent Cause a nuisance to Knightstone or other residents Put up any external aerials (this includes satellite dishes) 9

12 Our obligations We must: Maintain and repair the structure and exterior of the building, including communal drains, gutters and external pipes Keep in repair the common parts. These are communal areas which may include staircases, entrances and grounds. When reasonably necessary, we will paint both the exterior of the block and the internal common parts Maintain (at a reasonable level) any services set out in the lease and to keep in repair any related machinery or installations connected with those services Insure the building Costs incurred by us in respect of these obligations can be passed onto leaseholders as a service charge. Actions for which you need our consent In most cases you have the same rights and responsibilities as any homeowner. Some activities are not permitted. For example, if you live in a block of flats you can t use the car park to carry out major repairs to vehicles. In other circumstances you may need our written consent. For example, if you wish to: Keep a bird, animal or reptile in your home Make changes or improvements to your home Use your home as security for a loan Sub-let your home or sell your share The lease gives full details of activities that are not permitted and activities you need permission for. These restrictions are intended to protect you and your neighbours from nuisance or annoyance, and to make sure the buildings insurance remains valid and to protect our interest in the property. There may also be conditions that we entered into when we purchased the land or property. You have to keep to these conditions too. Using your share of the property as security for loans If you are a shared owner and you wish to borrow money, the lender may want to use your share of the property as security. If you fail to repay the loan, they can then get their money back by requiring you to sell. You must get our written agreement before agreeing to borrow money on this basis. 10

13 Changing the name(s) on the lease If you wish to change your name, or add or remove another person s name as joint lessee, you must obtain written consent from all parties to the lease, including us. You will need the help of a solicitor to make sure the transfer or addition of a name is done correctly and is legally binding. Repayable discount This only applies if you were previously a Knightstone tenant and bought your home under either the Right to Buy or Right to Aquire schemes. Most Right to Buy or Right to Acquire purchases are made with the help of a discount. Once the sale is completed, there are statutory restrictions on the owner s ability to sell their home or to take out other loans or mortgages using the property as security. These restrictions are set out in the lease. If the original owner sells within five years of buying the property, a proportion of the discount that they received must be repaid to Knightstone. Right of entry If you live in a flat, we, and our appointed representatives and contractors, have a right of entry under the terms of the lease. This is to allow works or inspections to be carried out. This right will be exercised reasonably and we will agree a time with the leaseholder beforehand. The only exception to this is when there is a need to deal with an emergency. If we need to carry out works in the property, we will try to cause the minimum of disturbance and any damage caused will be made good. This right of entry also applies to other residents who have to carry out works in the property. This should cause a minimum of disturbance and any damage caused should be made good. For more information about repayable discount and whether or not this applies to you, please contact the Homebuy Sales Team. 11

14 Improvements and alterations Under the terms of your lease, you must get our permission before making any alterations to your property. You may also need other permissions, such as planning permission or building regulations permission from the local authority. As the freeholder, we can decide under the terms of the lease whether to grant permission. An application for permission must be made in writing. You should enclose copies of any plans, drawings or diagrams that help explain what you want to do. Your lease will generally require you to pay us a fee to reflect the time we spend and any fees we incur in dealing with your application. We have responsibility to safeguard the appearance of the area in the interests of other residents and to make sure the structure of the building remains sound. We will not refuse you permission to carry out alterations without good reason. If we grant permission, you should then contact your local authority to find out if you need other permissions. In this way, if we refuse permission under the terms of the lease, you will not have incurred any of the costs involved in seeking planning or building regulations consent. Please note for certain works you may also need consent from the original builder where this is not us. You should take independent advice about the consents and permissions needed. Unfortunately we cannot advise you, although we may be able to assist. Following alterations, you may need to increase your buildings insurance to reflect the increase in value of your home. Please contact us if you want to do this. Please note that improvements may make your home easier to sell, but do bear in mind that the cost of improvements is not always reflected by a similar increase in property value. If you are a shared owner, when you come to move, you can still only sell your home based on your current percentage share and current market value. 12

15 Your statutory rights Leaseholders have statutory rights set out in law. Please contact us if you would like to know more about any of the rights that are summarised below. Our contact details are on the back cover. Alternatively we suggest you contact a solicitor or: LEASE (The Leasehold Advisory Service) T: E: info@lease-advice.org W: Service charges - a summary of tenants rights and obligations Your lease sets out a variable service charge (see Annual service charge and other payments on page 17). Whenever we issue a demand for payment, you are entitled to receive a document called Service charges - a summary of tenants rights and obligations. Please note: although this title refers to tenants, it also applies to leaseholders. The document sets out your statutory rights and obligations in relation to the service charge. The wording is set by law so is not specific to you. Statement of account Leaseholders have the right to be provided with a written statement of account. This is a summary of costs in relation to service charges upon request. Your request must be made in writing and can only relate to the most recent accounting period (usually 1 April to 31 March) in which charges have been raised. We have one month to make the summary of costs available to you or six months from the end of the relevant accounting period. The summary should show how the costs incurred by us have been reflected in the service charges. Once this summary has been provided, the leaseholder also has the right to write and ask to inspect and copy accounts, receipts and other relevant documents. The landlord must allow reasonable facilities for inspection. The facilities for inspection should be provided free of charge at the point of use, but may be recharged to leaseholders through the management costs element of the annual service charge. A reasonable charge can be made for the taking of photocopies. We have one month to respond to this request and should make these facilities available for up to two months. 13

16 Management audit The Leasehold Reform, Housing and Urban Development Act 1993 gives leaseholders the right to a management audit. This is an audit that looks at the services provided by the landlord and the service charge costs. A management audit lets leaseholders appoint a qualified auditor to examine: Please note: the legislation sets out a number of conditions that must be satisfied before this right can be exercised. Leasehold enfranchisement (the right to enfranchise) This right was introduced by the Leasehold Reform, Housing and Urban Development Act 1993 and was amended in Leasehold enfranchisement (also known as collective enfranchisement) means that leaseholders acting together have the right to buy the freehold of their building from the landlord. As Knightstone is a charity, there are restrictions about when this right can be exercised. Generally if the building is used for charitable purposes (for example, a scheme for elderly persons), then you may not have the right to enfranchise. Right to Manage (RTM) This allows leaseholders collectively to take over the management of their building. Leaseholders do not have to prove any fault on the part of their landlord and don t have to pay any compensation. To qualify for this right: It does not apply to houses or bungalows. Extension of leases The Commonhold and Leasehold Reform Act 2002 amended rights for some leaseholders to extend their leases. Leaseholders can now get a new lease for a period of the remainder of their existing lease and 90 years. To be eligible, leaseholders need to have owned the lease for a period of two years before being able to exercise the right. A value would need to be agreed for the new lease. For more detailed information about leasehold enfranchisement, the Right to Manage and extension of leases, we suggest you contact a solicitor or: LEASE (The Leasehold Advisory Service) T: E: info@lease-advice.org W: 14

17 Living in your home Keeping you informed We aim to keep you fully informed. If you cannot find the information you need in your lease or this handbook, please contact us. Our contact details are on the back cover. Homeowners news We will regularly update you with news. This will be published on our website We will also publish our newsletter Homeowners News online. Homeowners News aims to keep you informed on matters of interest. You are welcome to contribute your news and comments. If you wish to receive a paper copy please contact us. Annual report and accounts Every year, we produce an annual report and accounts. We also publish annual statistics on how we have performed in important areas of our work. For example, how quickly we have responded to requests for repairs, who we have housed, and how many empty properties we have. The annual report and accounts are available free of charge, on request. Our policies You have a right to see copies of our policies on housing management and maintenance that affect you as a leaseholder. Living with your neighbours Everyone should be able to live peacefully in their homes. We expect people to show consideration and reasonable tolerance towards their neighbours. If there is a dispute with your neighbour, try to solve the problems between you in a friendly way first. Problems are rarely caused deliberately and people are often happy to put matters right. Noisy neighbours may simply not realise you can hear them. If this does not work please report the dispute to us. If there is there is evidence of persistent nuisance you can use the First Response Service delivered by our Nuisance Prevention Team. They will visit and offer advice and support on how to deal with the problem. However, our powers are limited. In very serious cases, we can ask a Court to end a lease or tenancy if it is another leaseholder or one of our tenants who is causing the nuisance to you. If you require us to take action, we may (depending on the terms of your lease) ask you to refund our costs for bringing action on your behalf. Depending on the nature of the nuisance you may have the right to take your own legal action against neighbours causing a nuisance. The Environmental Health department of your local authority has powers to deal with noise nuisance. For further advice, contact us or the Citizens Advice Bureau. Consultation on matters that affect you We will fully consult you about any proposals that directly affect you, your home or your estate. 15

18 Racial and other harassment We will support residents or staff who are the victims of harassment. Where possible, we will take action against any resident causing harassment. Please contact us if you need help or advice. Running a business from home You can use your home address to receive business post, but it may be against the terms of your lease to run any trade or business from your property. If you want to do this, please contact us to discuss it. In some circumstances, depending on the nature of the business, we may be able to give you permission. Taking in lodgers You can take in a lodger if you wish, provided you also live in the property. Be careful about the agreement you make with your lodger or you may find you have given them legal rights to stay in your home and you may not be able to get them to leave quickly. Please also remember that payments from a lodger may affect your entitlement to state benefits. Get good advice first, for example, from a Citizens Advice Bureau or a housing advice centre. Your local authority and the Inland Revenue may also provide helpful leaflets on letting a room in your home. Keeping pets / animals You are required to get our written consent before keeping an animal, bird or reptile. If you re in a house, we will normally be able to give permission. However, if you live in a flat, we do not usually allow dogs, cats or other large animals because of the nuisance they can cause to neighbours. We will give special consideration to any requests to keep a guide dog or hearing dog. All pets must be kept under control. Parking and vehicle repairs Please park cars in the areas designated for parking and not on landscaped areas. Shared or common car parks are normally intended for licensed, roadworthy, private cars only. Because of limited space you are not permitted to park caravans, boats, commercial vehicles (other than light delivery vans) or similar large vehicles on the property. When you bought your home you will have been made aware what (if any) parking space(s)/garage you have bought or been allocated for your use. Please note: for some of our schemes, resident only parking restrictions apply and car clamping companies may operate and monitor parking. In these situations, residents will be issued with parking permits. Car parks, car spaces and garages must not be used for major repair work to vehicles, because this can cause nuisance and danger to other residents. Television aerials and satellite dishes If you live in a flat, there is normally a communal TV aerial system. We will not normally give permission for individual satellite dishes, but we will give permission for a communal system. Contact us for further information. If you live in a house, you can put up a television aerial, but you need our permission before putting up a satellite dish. We will only refuse if we have good reason to do so, and we will explain our reasons to you. 16

19 Disposal of refuse Litter spoils the appearance of your neighbourhood, so please help by making sure rubbish is disposed of properly. For example, tie up your refuse sacks, put them out on the right day and do not leave them out longer than necessary. If you need to dispose of large items, contact the local council. Most councils will arrange for the collection and safe disposal of household goods, such as, beds, cookers, fridges and washing machines. Please be aware, should we have to remove any rubbish left in communal areas, we will, where possible, add the costs for doing so to residents service charges. Contents insurance We arrange your buildings insurance (see the buildings insurance section on page 24), but this does not cover your personal possessions. We strongly advise you to take out contents insurance to cover for loss, or damage, to your belongings. Avoiding condensation problems Condensation can cause mould, which can damage your clothes, bedding, floor coverings, decorations and property. It occurs when warm moist air or steam hits cold surfaces, such as, windows and walls. This often happens when you are cooking, bathing or washing and drying clothes. To reduce or prevent condensation: Leave background heating on during cold weather Make sure all rooms and cupboards have adequate ventilation Open the windows slightly if they mist up When cooking, bathing, washing or drying clothes, keep the room door shut and open the window a little Make sure air bricks and vents in outside walls are not blocked Wipe down any mould with an appropriate cleaning solution, for example, bleach or a fungicide Frost precautions If water freezes in pipes or cisterns it can cause serious damage. Before winter sets in, check all pipes and water tanks in the roof, or outside, are lagged. If you are concerned about communal areas, please contact us. If you are away for a short period, keep your home heated if you can, and ideally, arrange for someone to come in and check your home. Gas safety It is a condition in most leases that you make arrangements for any gas fired heating appliances to be serviced once a year by a registered heating engineer. If you smell gas: Do not use any naked flames or electric switches Turn off the gas Open all doors and windows Put out cigarettes Contact National Grid on

20 Sub-letting your home Shared owners and DIYSO As a shared owner, your lease does not allow you to sub-let your home, but in certain circumstances we may give you permission to sub-let all, or part, of your home. For example, we may allow you to sublet if you have to move to another area (for example to start a new job) and are having trouble selling your home. If you wish to sub-let your home, you must: Write to us saying that you wish to sub-let your home Get your lender s written consent to a sub-let (they may charge you for this) and send a copy of this to us Please note: your lender may want to charge you a higher rate of interest on your mortgage. You should check with them. We will then arrange to discuss your request with you. If we give you permission, it will be subject to the following conditions: You let the property on an Assured Shorthold Tenancy, which includes all relevant conditions of your lease The sub-let is for a limited period only, this is usually for six months but can be extended for up to two years You get our approval to the rent, which should not normally be more than 10-15% above the amount you need to meet your mortgage and annual account charges You remain responsible for all repairs and all payments You provide us with your new contact address and telephone number and You provide us with the name of the sub-tenant Sub-letting your home can have tax implications. For further information, advice and helpful leaflets contact the local Inland Revenue office or a Citizens Advice Bureau. Other leaseholders If you have purchased your home under the Right to Buy or Right to Acquire, or if you have purchased from an existing leaseholder, the terms contained within your lease will determine whether you may be able to sub-let your home. Some leases restrict or do not allow sub-letting. Where we allow sub-letting, you may have to get our permission first. We will not refuse you permission without good reason. Where there are restrictions on sub-letting, we will consider requests on a personal basis, subject to certain conditions. Before letting your property, contact us for further advice. You should also get independent legal advice and consider the following points: Check your lease and get our permission, where required If you have a mortgage you will need your lender s permission Make sure you have contents insurance if it is furnished and make sure your insurer knows you are sub-letting Use a reputable lettings agency to manage your property. Their terms will vary so it pays to shop around Give us a contact address and telephone number, in case of problems Make sure you continue to pay the service charges and ground rent to us Grant your tenants an Assured Shorthold Tenancy (this will need to reflect the terms and conditions of your lease) - minimum of six months Give them our contact details in case there are urgent problems affecting the building It is your responsibility to carry out gas safety checks and electrical checks at the required intervals If you can meet these terms, we are more likely to agree. We will tell you if the building insurance premium has to increase because you are sub-letting. 18

21 The annual service charge and other payments Your annual service charge may include the following elements: Day to day repairs Building sinking fund contributions and management costs Ground rent (if applicable) Rent (if you are a shared owner) These are explained below Service charges If we provide shared services, such as cleaning and lighting to common areas or maintaining the grounds of shared gardens, you will be asked to pay a service charge. This total cost is divided into individual contributions payable by each homeowner. The terms of your lease or freehold documentation will detail what costs will be included. If you have a flat, the service charge will also include your contribution to the cost of maintaining the structure of the building and keeping common areas, such as halls and stairways, in good repair. The service charge is normally collected monthly with your other payments. We set the charge by estimating the total cost of providing the services over a twelve-month period. If charges are too low to cover costs, we normally recover the shortfall through the next year s charge. If we are left with a surplus at the end of the year, we offset this against the new charge. The lease may allow us to share out the total cost to leaseholders by any method that we consider reasonable; this is supported by legislation that requires landlords to set charges in a reasonable manner. Alternatively, the lease may specify a particular method of charging, for example dividing the charge by the number of flats (and houses) in a block (or estate). Your lease sets out how we apportion charges between flats in a block. Sometimes, there will be more than one calculation set out, because there may be other blocks of flats and, in some cases houses, that will also have to contribute to services or repairs carried out on your behalf. Service charges can be billed for in advance. Leases usually state that this will be done monthly or quarterly. We will also accept weekly payments. We send a statement to you once a year to show the estimated costs for the forthcoming year. This statement will also set out the charges depending on how you have agreed to pay. You will also receive an accounts statement at the end of each month showing amounts due and paid. 19

22 What is included in the service charge? Although the lease or freehold documents will set out what is or can be included in the service charge, below are details of some of the most common service charge items: Lifts - The total annual cost of repairs, maintenance, insurance and depreciation for the lift in your block Cleaning and upkeep - The cost of providing a cleaning service Door entry systems - This is the cost of maintaining and replacing a door entry system and will vary according to the type of installation in your block TV aerial - The cost of providing a communal TV installation to the block, including replacement, depreciation and electricity Estate roads, drains, street lighting, storm water and sewage pumping stations - The charge covers repairs, maintenance, replacement and power supply. This only applies to roads and installations that are private, in other words, have not been adopted by the local authority Garden/landscaping maintenance - This is the cost of the contract and other work needed to maintain communal landscaping, car parking, road sweeping and removal of refuse on an estate Central heating/hot water - This only applies where heating and hot water are supplied from a central boiler. Costs will include a contribution to the actual heating and hot water costs for your own flat and any heating or hot water provided to common parts Building insurance - Where we are required under the terms of the lease or freehold documentation to insure your building and review the charge annually Window cleaning - Where provided, this will be for the cleaning of windows located in the common parts Day-to-day repairs These relate to the costs of carrying out minor repair works to communal areas and the main structure. Building sinking funds On some of our schemes we have set up a building sinking fund, or savings fund. This helps us to spread the cost of large items over several years. Monies paid into this fund accumulate for future communal maintenance, repairs and improvements, such as, external redecoration and the replacement of equipment rather than presenting you with a large bill in the year the work is done. Interest earned on the sinking fund is shown in the annual accounts and remains in the fund. 20

23 Management costs Depending on the terms of your purchase agreement (freehold or leasehold), we charge this in three parts: 1. A flat rate management fee 2. An administration charge, based on percentage of the cost of repairs/works actually carried out 3. Additional services not covered by the management fee or administration charge The management fee covers administering the service charge account, including production of service charge statements and production of annual accounts. It also covers general office administration, arranging buildings insurance and cost of public liability insurance, dealing with day-to-day enquiries, managing estates, and consulting you. The administration charge is usually a fixed percentage added to other service charge items. It covers the costs of our Maintenance Team, Asset Management Team and other Knightstone departments administering the works for you. Tax VAT is not chargeable on the management fee or on our administration charge. We have to pay VAT on all repair and maintenance work, other services provided by contractors, materials and related expenses. Insurance Premium Tax is payable on all insurance premiums. Corporation Tax has to be paid on interest paid on monies held in the building sinking fund. Consultation on service charges We will send you draft service charge accounts during June each year. We will provide you with a 30 day consultation period in which to query any charges. After the consultation period ends, we will issue you with a final annual service charge notice each September. You then have a further 30 day notice period before making any changes to your new monthly payment. If you live in a block of flats, you will be given an opportunity to attend an annual meeting to discuss the accounts and agree the budget for the forthcoming year. Details of additional services for which a charge may be made can be found on our website. If you require any further information about these additional charges, please contact us. 21

24 Statutory consultation (Section 20) If a leaseholder s individual contribution to the cost of any service contract work or day-to-day repair is likely to cost them more than 250 in a year, we must consult leaseholders on the work intended and explain why we need to do it and the likely cost. We may also have to give leaseholders the opportunity to nominate a contractor(s) to carry out the work. If we intend to set up contracts for more than 12 months, where the cost to any leaseholder is likely to be more than 100 in any year, then we must also consult as above. Depending on the value of the contract, we may also have to advertise the contract in the EU. This area of legislation can be complex and for more detailed information we suggest you contact a solicitor or: LEASE (The Leasehold Advisory Service) T: E: info@lease-advice.org W: Ground rent Your legal documentation will set out whether or not you pay ground rent. Where this is the case, we will issue you with a demand for ground rent payment. Rent payments If you are a shared owner, you pay a monthly rent to us. Your rent covers the loan repayment that we have to make on the share of the property you have not bought. Your rent is assessed on an annual basis and usually rises in line with the Retail Price Index. If you bought your shared ownership home before 15 January 1989, your rent is set by the Rent Officer Service. We cannot charge you more rent than the amount the Rent Officer fixes and we can only ask the Rent Officer to review your rent every two years. If you bought your property under a Shared Ownership or DIYSO scheme, any changes will come into effect on 1 October, or 1 January. We give you at least one month s notice of any change. For further details, see your lease. Appeals against the level of payments If you feel your payments do not offer value for money or have been set or applied incorrectly or unfairly, please contact us. If you are a leaseholder you then may refer the matter to the Leasehold Valuation Tribunal (LVT). You should take independent legal advice about this. 22

25 Method of payment Your rent, management fee, administration charge, insurance premium and service charge (where applicable) are due, in advance, on the first day of each month. You must pay your charges monthly. You are encouraged to pay us by direct debit payment. You can make your payment in a number of ways: By Direct Debit through your bank or building society At the Post Office: pay by cash, cheque or debit card (you will need a paypass card - please contact us for details) At any payzone or e-pay outlet Through our website (24 hours a day) and click on allpay.net Over the phone using debit or credit card (24 hours a day) - automated payment service telephone number By text - using debit or credit card (24 hours a day). You first need to register your mobile phone on pay Once you ve registered just text pay along with your password and amount you want to pay to By post - you can send in cheques or postal orders to our office Pay cash, cheque or postal orders to our office Rent statement If you would like to check your rent account, please ask your Homeownership Officer for a statement. We will send you annual statements at the end of March. Late payments You must pay your rent and service charges regularly. If you cannot make a payment, please contact your Homeownership Officer straight away. Do not wait for the problem to get out of hand. We can arrange with you to clear your account over an agreed period. We can also give advice on claiming state benefits. The lease allows us to charge interest on any arrears. We may do this if there appears to be no good reason for your late payments, but we will tell you first. Your home is at risk if you do not keep up payments If you are in serious arrears without good reason and have failed to respond to our efforts to resolve the problem, we may take legal action that could result in the loss of your home. Before doing so, we are obliged to tell your mortgage lender of the position. Forfeiture proceedings result in the termination of your lease and that would result in the lender losing out as well as the leaseholder. To prevent this, the lender may agree to pay your rent, but they will add this cost to your mortgage debt. If you cannot then meet your mortgage payments, you may risk losing your home through repossession. We want to help you avoid serious arrears. Please let us know if you have a problem meeting your monthly payment. You should also tell your lender if you are not able to make your loan repayment on the due date. Benefits to help meet payments If you receive income support or are on a low income, you may be able to claim Housing Benefit from your local authority to help with the rent payment. You may also be able to get help from the Department for Work and Pensions to meet your mortgage costs (interest element only, not capital). If your circumstances change and you are worried about meeting your payments, please contact your Homeownership Officer for advice. 23

26 Your responsibility for repairs Most leaseholders will buy their home on a full repairing lease. This means you have total responsibility for keeping your home in good repair, even if you have only bought a part share. House owners are responsible for both the inside of their home and the structure. If you live in a flat you are still responsible for the repairs inside your home, however we will normally maintain the structure of the building and the common areas and recoup the costs from you through a service charge. If you have a private garden, you must keep it tidy and free from rubbish. You may also be responsible for areas of landscaping that lie outside the walls and fences around your home and are not obviously part of your property: you need to check the terms of your lease. The lease plan shows the boundaries of your property. Check if there are any conditions. For example, it may be a planning requirement that certain areas are kept open plan, turfed or planted. An inward facing T on the lease plan shows the fences or other boundaries that are your responsibility. If you wish to put up additional fencing, you will need our consent and may also need planning permission. Precise details of repairing responsibilities are in your lease. If you have any queries, please contact your Homeownership Officer. 24

27 Our responsibility for repairs If you bought a brand new home, faults or defects occurring in the first 12 months (occasionally 6 months) of a new building are the responsibility of the builder. This is called the defects period. The 12 months start from the date the homes were completed, and not on the date you bought your home. If you have bought a brand new home, keep a list of any items that you consider need attention. Normally, we or the builder will inspect the property at the end of the defects period to agree the items that need attention, including those on your list. These will be put right in the weeks following the inspection. If the repair is urgent, such as leaking pipes, a toilet that will not flush or a heating system that does not work, please report the repair immediately to us. Please refer to contact details at the back of this handbook. The contractor will usually contact you to arrange a time to call. Please keep to any appointments made - a wasted call can be costly and could incur additional charges. For flats, the freeholder (usually us) is responsible for keeping the structure of the building and the common areas (such as halls and stairways) in good repair, and we inspect these regularly. If you notice repairs are needed to these areas, please let us know (please refer to back of this handbook for contact details). If we do not own the freehold, we will make sure you know the name of the freeholder or their managing agents, so you can contact them if you need to. If you bought your home from us under the Right to Buy or Right to Acquire schemes you will have received the Landlord s Offer Notice prior to your purchase setting out your liability for major works within the first five years. If you want any further information about this, please contact your Homeownership Officer. At the end of the defects period, the builder will cease to be responsible for repairs. If you bought a new home from us or from a builder, it will either have a 10 or 12 year National House-Building Council Certificate (NHBC) or a Zurich New Build warranty. Major defects occurring after the defects liability period may be covered by this guarantee, if you have any problems please contact NHBC or Zurich. 25

28 Buildings insurance Under the terms of your lease, we are responsible for buildings insurance. We arrange insurance to cover loss or damage to the building, drains, pipes, cables, drives, footpaths, garden walls, and communal fixtures and fittings. We also provide public liability insurance to cover external common parts. You should arrange your own insurance to cover your contents and personal possessions within your home. It is your responsibility to make sure that your contents insurance is adequate for your needs. You pay for your share of buildings insurance (including Insurance Premium Tax) in your monthly charges, usually as part of your service charge. The costs of arranging and administering the insurance are covered from the flat rate management fee that you pay as part of your service charge. The amount your home is insured for covers the cost of rebuilding your property as new. A copy of the up to date summary document of the buildings insurance policy can be found on our website: There are three policies: One for shared owners and DIYSO s One for people who s property was originally purchased their homes under the Right To Buy scheme and; Another policy for people who have purchased homes in our leasehold schemes for the elderly Making a claim Zurich Municipal currently provide our Buildings Insurance policy. Please call their property claim line (freephone), and they will assist you with your claim. Public liability insurance This covers all external common areas, for example communal car parks, grassed areas, private roads and playgrounds. We make sure this insurance is in place. The cost of this insurance is covered through your flat rate management charge. 26