Hi Kerai,

Upon review of your service charge account, I note that you are referring to a year end balancing adjustment that was raised following the completion of the service charge accounts.

Most leases contain a provision for the Landlord/Management Company to raise anticipated service charge demands in advance of the year end to meet the expected expenditure to be incurred during the financial year of the development. Where a service charge is payable before the relevant costs are incurred, it must be a reasonable amount.

Managing Agents are to produce year end accounts and service charge certificates after the financial year end. Leaseholders have a legal obligation to contribute to their allocated proportion of actual costs incurred.

The service charge certificate will detail the total payable by the leaseholder as well as the total anticipated service charges demanded during the related financial year. Should the proportion of actual costs incurred be greater than the total of the anticipated demands (a deficit), the leaseholder will be required to make payment of the balance. However, should the proportion of actual costs incurred be lower than the total of anticipated demands (a surplus), a credit will be made to the leaseholders account to be offset against future demands.

I trust the above to be of interest and assure you that I would be happy to expand on the explanation provided should you wish to contact me directly.

Kind regards

Wendy Walker
wendy@inspiredpm.co.uk