Ask Us – Your charges

Lease Agreement

Understanding leasehold

Q
What is Leasehold?

A

Leasehold is one of the means of property ownership in England and Wales that relies upon one party ‘leasing’ the right to occupy a property to someone else via terms specified in a lease.
Q

What is a Lease?

A

A Lease is the legal document which sets out the legal relationship between the person who purchases the right to live in a property (generally called the Lessee) and the person who owns the land (Landlord or Freeholder).
Q
Do I ‘own’ my flat?

A

Technically no. When you ‘buy’ a flat, you are buying the right to occupy that flat for a period of time (as defined by your lease).
Q
As a leaseholder (or Lessee) what are my rights and obligations?

A

Every flat lease is different. Therefore it is highly recommended to read through your lease to understand what your rights and obligations are.
Q
Where can I get further information about Leasehold?

A

MLM Connects Communal Living section, details many common factors involved in flat living and we would recommend that you read through the sections that may be relevant to you and your development.
You can also refer to the following useful websites for further information:
ARMA (Association of Residential Managing Agents)

The Leasehold Advisory Service

Your Charges

Understanding your charges

Q
What is a demand or application for payment?
A
An application for payment also referred to as a ‘Demand’ is similar to an invoice and is the document which details your charges. It is referred to as a demand, which is not meant to be threatening or aggressive. This terminology is used as it refers to the legal mechanism which states that your charges are demanded to you.
Q
Why have I been charged Service Charges?
A

Service charges are your proportion of the costs required to pay for expenditure relating to the repair and maintenance of the common areas of a building. The service charge budget is calculated by estimating the cost of repairing and maintaining the common areas for the next financial year. The budget is then charged to all the leaseholders based on the specified provisions set out in your lease. This amount is then charged to you periodically, the frequency of which is also dictated in your lease (i.e. quarterly, half yearly etc.). Each building is unique and therefore has a service charge budget specifically catered for the buildings individual requirements. Service charge costs may include items such as lift maintenance, utility bills for the communal areas, gardening, cleaning, health and safety compliance, buildings insurance, general repairs, managing agents fees, entry phone maintenance, porter costs etc. (Please note this list is for information purposes only and is in no way an exhaustive list or representative of your building).

Q
Why have I been charged for balancing charge (deficit) or credited for balancing credit (surplus)?
A

At the end of each financial year, service charge accounts are produced for your building (if the building runs a service charge). The actual expenditure is compared to the budget (the amount already charged out). If the actual expenditure is less than the budget, you will receive a credit. If the actual expenditure is greater than the budget, you will receive a charge.

Q
Why have I been charged for Ground Rent?
A

Some leases allow for a small amount of rent to be paid to your freeholder and this amount is called Ground Rent. Ground rent will be issued to you on your application for payment and you will also receive a ground rent notice which is a legal document that accompanies ‘demands’ for Ground Rent.

Q
Why have I been charged for Reserve Fund?
A

A reserve fund is often collected (where your lease allows) to ensure suitable funds are available when large non annually recurring communal items are required to be repaired or replaced such as internal or external redecorations or replacement of aging communal equipment such as lifts, lighting, fire equipment etc.

Q
Why have I been charged a late fee?
A
If your account is in arrears, you may be charged late fees. If you want to avoid late fees, why not sign up for Direct Debit by clicking here: Sign up for Direct Debit
Q
Why have I been charged a legal fee?
A

If your account is in arrears, and we have had to refer you to solicitor for debt recovery, you will be liable for any legal fees incurred.

Q
Why have I been charged for major works?
A

A sinking fund or a major works fund is collected for extensive planned works in the building. The costs are calculated for the whole project and are charged to the leaseholders based on the specified percentage in your lease. Examples of works may include a new roof, internal / external redecoration, replacement of a new boiler system, a new lift etc. (as appropriate to your building).  

Q
Why have I been charged for a contractors invoice?
A

There may be rare occasions where expenditure arises from work carried out within your property. These items cannot be put through the service charge and you would therefore be liable for these costs, which will be added to your account. An example might be a leaking washing machine, which is causing damage to the flat below. The leaseholder would have to pay for any associated costs involved in rectifying the problem and any damage caused.

How to pay

Ways to pay

Direct Debit
Q
What are the benefits of paying by Direct Debit?
A

It’s quick, free and easy – once set up, there’s nothing more for you to do! No more arrears chasing, or late fees. We will notify your bank on your behalf when charges are due.
It gives you peace of mind – you never need to worry again about paying us, or whether your payment has arrived on time – it will all be done for you. Direct Debit is completely reliable.
You remain in control – you will always be given at least 10 working days notice of any amount to be debited from your bank, giving you plenty of time to query any payment with us. You can cancel your Direct Debit at any time by notifying us in writing.
It’s guaranteed – in the unlikely event an error is made, you are protected under the terms of the Direct Debit Guarantee Scheme.

Q
What else do I need to know about Direct Debits?
A
What will be collected by Direct Debit – We will collect arrears plus future charges raised on your account based on existing or future annual budgets and as per your lease obligations. You will be notified of these charges by your application for payment / demand and annual budget correspondence. Frequency of Collection – We will collect your payments on the day your charges fall due (or the next available working day) as per your lease and as detailed on your application for payment / demand. This is not a facility to pay by monthly instalment. It is a facility to automatically collect your charges when they fall due as per your lease. If you wish to discuss this further, please call us on 020 8492 9850. Year End Balancing Charges – If applicable, these will also be collected and you will be notified by application for payment / demand when these charges will be deducted.
Q
How do I sign up for Direct Debit?
A

Fully complete the mandate below, including your bank details and your tenant reference (found on your applications for payment) and send it to us via email at billing@mlmproperty.co.uk or to our main office address. (Third Party bank details are not acceptable).

Click here to download the Direct Debit mandate: Direct Debit Form

Card Payment
Q

How do I pay by card?

A

Sign up to our online portal ‘MLM Connect’ to see your account and make payment online. Click here for more information. 

Bank Transfer
Q

What are MLM Property Management’s bank details?

A

Bank: Natwest
A/C Number: 65052358
Sort Code: 601520
IBAN Number: GB25 NWBK 6015 2065 052358
BIC: NWBK GB 2L
Please quote your tenant reference number (found on all correspondence received by MLM)

Third Party

Third party payments

Q
Can someone else pay my charges on my behalf?
A

If you require someone else to pay on your behalf, we require written confirmation with your payment. Failure to provide this will result in the payment being returned. Acceptance of payment from anyone other than the leaseholder will not give legal rights to that person in respect of the premises.

Debt

Non-payment

Q

What happens if I don’t pay my charges?

A

If you do not pay your charges on time you may incur interest charges if allowed in your lease. Non-payment will ultimately result in legal action being sought to recover outstanding sums. We may send you reminder letters which may include late fees and if necessary, a notice of intended legal action incurring an administration charge of £75 inc VAT which will be added to your account.
If your account has already been sent to our client’s solicitor for debt collection, we are not permitted to accept any payment under any circumstances until the matter is resolved with the solicitors.
If you are having legitimate problems paying, please notify our Credit Control department immediately to avoid further action being taken to recover these outstanding sums. Please note that if you make a part payment, you will continue to be chased for non-payment on the outstanding sums and may incur associated costs to recover these sums.

Q
Who can I call to discuss my arrears?
A
Please call us on 020 8492 9850 and speak to our credit control team.