Service charges explained

Whether you are a first time buyer or have owned a number of properties throughout your life, there are a number of issues which you must be aware of when thinking of buying within a management company.

We recommend that you discuss fully with your solicitor all aspects of your apartment or house purchase, including references to the Management Company, service charge, breaches of covenants and other issues.


A service charge is the fee that apartment and/or house owners pay as a contribution towards the maintenance and upkeep and insurance of the common areas, amenities and services.

You should check out the following in relation to the service charge before agreeing to purchase win a Management Company:

How much is the service charge?

• Is it paid monthly/ every six months or every year?

• How is it paid? By direct debit, standing order or by cheque?

• How is the service charge made up?

• Has the service charge been paid up to date by the current owner?

• Is there a sinking fund?

• Is the service charge reasonable given the nature of the development?

• Can I afford to pay the service charge in addition to all other outgoings in respect of the apartment?


It is likely that a Management Company will be set up and be responsible for the upkeep, maintenance and insurance of common areas, amenities and services. This Management Company will be made up of the apartment and/or house owners, who will each have an equal share in the common areas, amenities and services and equal voting rights.

The Management Company should oversee maintenance and repair work at the development. On occasion the management company will appoint a managing agent to carry out its tasks. Indeed, on occasion the developer will already have put an initial agreement in place with a managing agent who will do the day to day work of running the development for the management company.

At Gordon Estates we act as management agents for various management companies, providing specialist advise in all aspects of property management and company administration.


Your most significant responsibility is to pay your service charge as and when it falls due.

In addition to paying your service charge as a shareholder of the management company, you have a general responsibility to keep actively involved in the work of the management company. You should do this by:

• Attending annual & extraordinary meetings

• Contributing to discussions and decisions relating to the management of the development

• Analysing the accounts and ways in which the service charge monies are spent.