Consultation C - Changes to leaseholder administration

As a landlord we have two types of leaseholders: outright leaseholders who own the leasehold of their home and we own the freehold, and shared owners who own part of the equity of their homes.

This part of the consultation only affects our 1,650 outright leaseholders.

Changes at a glance

Change #1 - Timing of service charge correspondence

What currently happens: 

• The service charge administrative year runs from 1 September to 31 August.
• We send you one invoice a year which includes the estimate for the current year and the actual costs for the previous year.

Changes:

• The service charge year runs from 1 April to 31 March, the same as our financial and budget year.
• Around February we will send your estimated charges for 2024 - 2025 and ask you to start making payments towards it from April 2024

Change #2 - Payment of your 2023 -2024 service charge

Impact of change 1:

• Leaseholders who pay monthly by direct debit will only have the opportunity to make seven payments instead of the usual twelve (September to August)

Changes:

• Calculate any regular payments based on twelve months. However, we will only collect payments up to the end of March 2024
• From April 2024, we will ask you to start making payments which are based on your new estimated service charge for the 2024 - 2025 year.
• We will look to set up a separate arrangement with you to clear any outstanding sum.

The following arrangement periods are available:

For leaseholders living in the leasehold property

For leaseholders who do not live at the property and they are let on a commercial basis

Change #3 - Lease Covenant about prepayment

What currently happens:

• Nearly all our leases have a covenant which requires the service charge to be paid monthly in advance and for any deficit identified at the end of each year to be repaid on demand.

Changes:

• Waive this covenant so that leaseholders do not need to retain a permanent credit on their service charge accounts.
• Next year we will start to monitor the payment of service charges on a monthly basis and ask leaseholders to pay their service charges on a regular basis.

Change #4 - Annual debit charges and moving to a monthly debit charge

What currently happens:

• We add your full years' service charge debit to your account on 1st September. As you make payments throughout the year, the balance on your account reduces.

Changes:

• From the 1 April 2024, we propose to debit your service charge account on a monthly basis. We already do this for our shared ownership leaseholders (shared owners)
• Implement functionality in our housing computer system which will allow us to better manage and monitor leasehold service charges.

Change #5 - Sharing service charge expenditure information.

What currently happens:

• The service charge documentation that we issue each year does not provide sufficient information.

Changes:

• Create an interim Annual Certificate for leaseholders which will provide you with details of your charges for 2022-2023 and a summary of your accounts position up to 31 March 2023.
• Issue your estimated charges for 2023 - 2024 which will show you how much we estimate to spend in the year for each of the services that you receive.
• Create web pages so you can see immediately what is included in your service charge for last year e.g repairs and maintenance costs.
• As part of our wider Rents & Service Charge Consultation we will agree with the stakeholder group a set of new service charge estimate and annual certificate documents which will come into operation in 2024 - 2025

How to have your say?

We will shortly be sending all our customers an update on the rents and service charge consultation. It will include the opportunity for stakeholders to leave observations, answer questions and vote on the options discussed to date.

If you have any questions or comments, please get in touch either by:

Completing this form: Housing Consultation online form
Email: rentservicechargereview@milton-keynes.gov.uk
Text: 07860098637
Telephone: 01908253705

To find previously made comments and our replies to them, follow the two links below:

Working Group - observations and replies

Consultation C - observations and replies