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Service Charges Meeting

May 9, 2019 @ 6:30 pm - 7:30 pm

The Kings Crescent Resident’s committee are aware that some residents have concerns regarding their service charges. We have invited the New Build team and Hackney leasehold team to an open meeting to give residents an overview of service changes and the service charge process.

All residents from old and new blocks are invited to attend if you wish to understand more about service charges.

Please be aware that it will not be possible to discuss individual issues at this meeting, but they can be phones or emailed through to the Leasehold/New Build team.

Notes taken at meeting by Alice H (Residents committee secretary)

Meeting: Thursday 9th May, 6:30pm-8pm.
Chaired by John from Source Partnership
Attendees from Council
Charmaine Dennis, new build team.
John , new build property manager
Chris service charge manager for the older blocks and new blocks
Samantha Jensen, calculating service charges.
Queries about particular situation can be passed on via:
Two service charge statements each year: one estimated, and one actual.
Actual 2018/2019 in September 2020
Estimated 2019/2020 in March/April 2019
There is a one year lag in estimated vs actual.
By law required to include costs in the service charges within 18 months of when they are incurred.
An overview was given as to how estimated and actual costs are calculated:
  • Budgeted costs are sourced from key parties where available (eg. cleaning companies)
  • Other costs, such as maintenance. These will be based on average over last 2, 4, or 5 years – the length of time will be chosen based o which time  period is seen to be most representative.

Actual service charge is calculated:

  • Actual cost of providing service. This is the actual costs incurred.
  • Take actual cost information from different areas and review for appropriateness
  • Apportionment for block and estate is the same for actual and estimated
  • Costs are allocated to flats based on number of bedrooms
  • Building insurance is usually same expected vs actual
  • A further breakdown of actual service  charge costs can be requested within 6 months of the service charge request. Therefore, please request if you would like in Autumn when you get the service charge statement.
  • All invoices can be viewed, though there is a £10 charge (and you should expect several arch lever files of invoices)
  • Expected to get right (within c.100£) about 80% of time
  • Across Hackney, in many cases, credits are given back to residents at end of year,
  • The approach to “large costs” (known as major works) is different between phase 1 and phase 2. Phase 1 (older blocks) pay for large costs when incurred, and payment options are provided. Phase 2 (newer blocks) operate a reserve fund where contributions are made each year and large costs will come out of the reserve fund, this aims to spread costs across all residents fairly.
  • To calculate the contribution to the reserve fund,  the expected cost of replacement of key items (eg. roof) and expected lifespan are used to estimate the amount of reserve fund needed. The annual contribution per residents is then calculated.
  • bank interest on the  reserve fund is kept in the reserve fund. Level of funds in the reserve fund is reviewed once every 5 years.
  • Management charge, details are given in he service charge booklet. The management charge amount is the cost of providing management services. However, this is also bench-marked against management charges charged by other councils. Generally not all management costs are recharged because the cost would be too high to expect residents to pay.
Several Questions were asked and a collation of the key points made is below:
  • Estate cleaning is split across all residents. Block cleaning is split by block. There is no cross-subsidy.
  • a similar principle applies for CCTV.
  • There was some discussion on CCTV and in particular, some residents wanted confirmation that the CCTV does work in their blocks. Charmaine confirmed that all new blocks have operational CCTV cameras. An action was taken away by Hackney to confirm whether CCTV works is in some of the phase 1 blocks.  When CCTV is not working, costs are not charged.
  • A comment was made from some residents living in phase 1 blocks that cleaning is sometimes done very poorly. Charmaine agreed to follow-up with those residents specifically.
  • The point was made that ASB can be observed across the estate.
  • Questions were asked around whether reserve fund approach is fair.
  • there was a question around whether the phase 3 construction company will contribute to cleaning costs as a result of the building work. The exact details can only be known when the construction company is chosen but Hackney confirmed that this could be a point taken under consideration when choosing the company who will build phase III. it would be usual for some additional cleaning to be paid for by the company overseeing the building work.
  • It was noted that it is more difficult to estimate costs for the new block as there are more unknowns. however, it is to be expected that this would become more stable overtime.
  • A question was asked as to whether when errors are made by staff, are additional service charges taken from residents to cover additional costs. In terms of staff costs, the answer was no, there are no additional costs. However,  i do plan to ask a follow-up question on this.
  • A question was asked about how Hackney ensured value for money for residents.
the following examples were also given:
Cleaning ensuring value for money by checking that the cleaning being carried out is what is expected:
  • Have a schedule for cleaning across the estate
  • Managers do complete quality checks
  • Pilot scheme ongoing to have a check- in system where cleaners “check-in” on an app to show the time spent cleaning the different areas.
10% of all repairs are inspected to ensure they have been done correctly.
  • a question was asked about the error in the heating/hot water bill that has recently been corrected. This error happened because an admin error was made in terms of allocating the cost of the heating/hot water contract. There are several checks and controls around service charges, including a review by the legal team. Unfortunately, this got missed. Additional controls have been added to reduce the likelihood of this happening again.
  • Volunteers from the estate are shown service charge costs in advance to review and give feedback in advance of being shared with all residents. Charmaine asked for volunteers, several new people volunteered (including a member of the residents committee).
    Solar panels pay for electricity for lifts and lighting. So block electricity costs include a reduction due to electricity sourced from solar panels.
  • Electricity is bulk brought at lower costs than residents would be likely to get privately.
  • the comment was made that the additional letter sent with the corrected service charges, was a good start and a move in the right direction. However, it was confusing in places. Residents offered to input into this, and there may be opportunity to do this via the volunteers who review the service charges in advance. However, there wasn’t total clarity or agreement on this
  • There was a comment made that residents feel that, on occasional, Hackney does not listen sufficiently to residents feedback and/or reporting of issues around the estate. It can therefore take a very long time before action is taken. The request was made as to why Hackney cannot make the most of the residents who are often very knowledgeable about issues on the estate. One example would be that there have been frequent reports of CCTV cameras being missing or non-operational. Rather than acting directly on residents’ reports, a time consuming process of reviewing was carried out and there are still thought to be issues with cameras in some blocks.
  • it was requested whether residents in phase II could be told the total amount in the reserve fund.
  • Major works and repairs will be covered by the tenants in that block where the repairs or major works are carried out. Costs are shared fairly across all flats in the relevant block.
Based a 1-1 conversation after the meeting: As a note to residents in Chipping Court, you should have seen a change in the service charge costs for lifts. If you have not, please contact Hackney.
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May 9, 2019
6:30 pm - 7:30 pm
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Vince Murrrain Community Centre
N4 2GD + Google Map