Service charges - What your service charge covers
Services Charges – What are they?
What is a service charge?
It is a contribution towards the cost of providing and maintaining a communal service, provided to a resident irrespective of tenure (whether they are a tenant, leaseholder, or freeholder of the property). For example, if the resident lives in a block of flats and shares a communal hall and stairway, the cost of cleaning for this area is charged as a service charge. 
Other services provided may include:
• Electricity
• Lighting maintenance
• Telephone alarm link
• Door entry system
• Fire equipment maintenance
• Communal maintenance, maintaining water pumps, TV aerials
• Lift maintenance
• Refuse disposal
• Pest control
• Caretaking/Concierge
• Audit fees
• Buildings Insurance (Leaseholders/Shared Owners only)
• Management fees/administration fees
Why do Swan charge for services?
If we did not pass on the cost, we could not afford to maintain the services, as there is no funding to cover the cost of providing services so eventually either they would cease or be minimal. The government no longer subsidise the losses incurred by local Councils/Housing Associations. It also allows us to provide a good quality service and a duty of care to our residents.
How do we set your Service Charge?
Each January:
Each January, we look at what services we have provided to each block/estate/property during the year and how much they have cost. We use this information to calculate the following year’s service charges. The estimates are prepared and sent to Leaseholders/Shared Owners in March as the new charges take effect on 1 April each year.
End of each financial year:
After the end of each financial year, and when all Swan accounts have been finalised, we are able to prepare a statement of actual accounts, which have been audited by an independent accountant.
Work on the actual statements usually starts in July and the statements are normally ready for posting to our Leaseholders/Shared Owners in September. Sometimes there is a problem and we cannot produce the statements by the end of September, so we write a letter, known as a Section 20B notice to inform the Leaseholder/Shared Owner that the statements will be delayed.
When preparing statements:
When the statements are prepared, there will be either a credit, where we have over estimated the cost of the service or a deficit where we have under estimated how much the service has cost. We will put the credit back onto your account so that you can choose whether to leave the credit on your account or refunded to you. If the statement shows a deficit, the amount needs to be paid within 28 days from receiving the statement.
If you are a tenant and pay rent, the service charges for your property does not change in April but in October when the rent review takes place. The information used to calculate the charges is taken from the statement of actual accounts prepared in June/July time.