Maintenance Charge (or Service Charge)

A maintenance charge is sometimes called a service charge, but both relate to the same thing. It is a charge that covers the costs of repair and maintenance of the building concerned. This applies to external portions of the building, along with all communal areas that are indoors, i.e. communal entranceways, stairwells, and so on. If a lift is provided, the charge would apply to maintaining this equipment as well. Other common features include the roof, drainage, guttering, and so on.

Maintenance charges are usually applied to flats and apartments. The land on which they stand is owned by the landowner, while the flat owner owns the property. This is known as a leasehold. These scenarios lead to a maintenance charge applied by the landowner to cover the necessary repairs and maintenance the building would require over time. The tenant or leaseholder would be required and expected to pay the service or maintenance charge. They would be informed of how much it is and how often it should be paid.

Most charges are made either annually or every six months. It is quite common for the landowner to seek the payment in advance of having work done on the properties. However, in some cases, if a big bill comes up, such as for having windows replaced (if leaseholders cannot do so themselves), there might be a larger request for payment. Some landowners hold money in a sinking fund to offset such instances, although this can only be done if the lease permits it. It is always advisable to read the terms of a lease carefully before purchasing a property on a leasehold basis. It should give details of the maintenance charge and terms.