Service charges faced by buyers of newly-built properties are a “hidden cost” reaching an average of £2,777, a survey suggests.
It said buyers of apartments coming onto the market this year are paying significantly more in service charges than those buying older properties.
“Trendy” additions such as gyms and cinema rooms add to servicing costs.
“In some cases service charges are uncapped and can escalate rapidly. Landlords need to take into account all associated costs when purchasing a property, such as service charges, ground rent and taxes.”
Leaseholders pay a service charge to a management company to cover maintenance of the building. They tend to vary from year to year.The charges reflect the cost of maintenance to common areas, roof, gardens and so on. The lease to the property will set out what exactly the service charge covers. Owners who rent out their homes sometimes pass on these costs to their tenants. It is essential when buying a leasehold property that you carefully read the lease. If you fail to pay service charges then you could find yourself in breach of the lease and, depending on the terms of your lease, you could find the lease being forfeited.When buying a leasehold property make sure you are aware what the service charge covers. Also make sure you carry out thorough inspection of the property. The last thing you want to do is purchase a new property then find yourself paying out for a new roof. Items such as gyms, gardens, car parking, concierge service, all require upkeep and maintenance and the cost of the same will be reflected in your service charge. If you find yourself subject to a service charge dispute either as a landlord or a tenant dont hesitate to give us a call. 0161 832 4666