HML has today sent out the demands (‘applications for payment’) for the bi-annual service charge payments that fall due on 1st October 2019. The volume of paperwork received has caused some confusion, and we set out below a guide to try and help you understand what the applications relate to and which of the sums demanded you should be paying.
For the purpose of understanding the sum you should be paying for service charges due in respect of your flat (and, if appropriate, for each parking space) just one ‘Application for payment’ is relevant: you are required to pay the ‘Total Balance Due’ detailed on the invoice(s) dated 02/09/2019.
This invoice comprises:
The second payment of the 2019/2020 service charge, which, per the lease is due on 1st October 2019; and
The net total of balances (‘Previous Charges’) in respect of the 2016 and 2019 service charge accounts and a ‘service charge and insurance float’.
Below you can clink on links to see annotated copies of the various demands/credit notes that help explain what they relate to.
2016 balancing credit/balancing charge. In the service charge year ending 31st March 2016 the Residential (flats) budget underspent, resulting in a credit being made to your account. The Residential Car Park budget overspent, resulting in a balancing charge (ie, an additional charge payable by you).
These adjustments ordinarily would have been made several accounting periods ago.
2019 balancing credit/charge. In the year ended 31st March 2019 the Residential (flats) service charge budget underspent, resulting in a credit being made to your account. The Residential Car Park budget overspent, resulting in a balancing charge (ie, an additional charge payable by you).
The ‘Previous Charge’ balance relates to 1 above.
Service charge and insurance float: The Tribunal-appointed manager has the power under the Management Order to raise additional funds by way of a ‘float’. Mr Coates has deemed that such a float is required in order to have sufficient funds to pay the buildings insurance demand due to the landlord on 1st October and to ensure that the replacement s.24 manager commences on 1st October 2019 ‘in-funds’.
The ‘Previous Charge’ balance is the total of the 2016 and 2019 balances (per 1 and 2 above).
Bi-annual charge 01/10/19 - 31/03/20: this is the second annual service charge payment on account due in respect of your flat (or parking space(s)), per your lease.
The ‘Previous Charge’ balance is the total of the 2016 and 2019 balances and the ‘service charge and insurance float’ (per 1, 2 and 3 above). The ‘Total Balance Due’ on this invoice is the amount you should pay. Please do not pay any of the other demands, as they are included within the ‘Previous Charges’ balance on this demand.