If you are the owner of an apartment in the Isle of Man, then it will be incumbent upon you to apply a Service Charge, which is paid by the residents. This is the money which goes towards the day-to-day running costs of the development. There is nothing new about service charges. They are an important ingredient of communal living, a means of maintaining the integrity of the property, ensuring the building is compliant with all relevant legislation, for the benefit and safety of those who reside there.
What is the Service Charge For?
Although they can sometimes be a bone of contention, it is the responsibility of every apartment resident to pay a Service Charge. The contribution paid by each apartment may vary according to the size of the individual unit – for instance the service charge relating to a two bedroom or penthouse apartment would be greater than, say a studio flat, within the same block.
The money goes towards general overheads, such as property maintenance, (repairs, painting etc), lighting and heating of communal areas, window cleaning (usually all external windows and any internal communal windows), landscaping and gardening (grass cutting, watering etc).
It will also include buildings insurance, the installation and upkeep of any fire alarm systems, electrical equipment (such as distribution boards and security gates), gas safety certificates, TV satellite dishes and even lightning conductors. Items such as accountancy fees and bank charges (the service charge will be paid into a dedicated bank account) would need to be factored in, too.
Additionally, the Charge would cover the costs of paying any on-site staff, such as a concierge, janitor or handyman. Depending on the size of the complex, it might include a larger development team.
How often is the Service Charge Paid?
This can vary and will depend on the terms of the lease for each property. Sometimes this will come in the form of an annual charge, or it could be paid monthly, quarterly or half yearly.
How is the Service Charge Calculated?
The Charge will be based on an estimate, or budget, prepared by the management company, outlining each of the specific running costs relating to the communal elements of the property, as outlined above, and apportioned pro rata to the size of the individual unit.
Can service charges be avoided or scrapped?
No. Whilst some might argue that service charges are an unnecessary expense and an unfair burden for residents to bear – the opposite is true. They are in place for a very good reason; to ensure the development doesn’t fall into disrepair and is kept in good working order, year in year out, so that it remains a safe and desirable place to live. It will also help preserve the value of the underlying investment.
As an experienced property management company, we have considerable expertise in setting up service charge agreements and their coordination. If you are currently experiencing challenges setting up a service charge, especially if you reside away from the Isle of Man, then call Roy Hall at Sterling Property Management on 01624 611146 or email firstname.lastname@example.org