To help you understand some of the costs involved, the following article explains some of the things you need to know.
MAJOR REPAIR AND IMPROVEMENT WORKS
Newham Homes maintains the Common Parts and the Communal Areas of the block and estate of which your flat forms a part. Your lease will have a plan of your "Estate" attached to it.
This means that Newham Homes looks after the exterior and structure of the buildings as well as any out-buildings and other structures that may exist and any communal parts and equipment inside the block. Leaseholders are responsible for the maintenance of the inside of their flats/maisonettes.
When work is carried out by Newham Homes or its contractors, leaseholders must contribute their share towards the costs. The method used to determine these charges is as follows:
The cost of the work to the estate, divided by the Rateable Value of the estate,
Multiplied by the Rateable Value of your property. Each property has a Rateable Value and each estate has an Estate Rateable Value. Here is an example
- If the total cost of the work is £ 40,000
- There are 10 flats in the estate
- Their total is R.V. 2,000
- Your R.V. is 200
£ 40,000 x 200
= £4,000
2000
You are issued with a bill for £ 4,000.
When you receive your Price Offer Notice, prior to buying your flat/maisonette, you will notice that Newham Homes may have provided a list of works which it may carry out within the following 5 years, together with estimated costs. During this first 5 year period of ownership we will only be able to charge you for the costs of carrying out these jobs and only up to the amounts set out in the notice, plus an extra amount to cover inflation.
After this period and for the rest of the 125 years of the lease, you will be responsible for the full costs of any works carried out, subject to any government limits.
Currently these charges are billed when works are completed and the costs are known.
ANNUAL SERVICE CHARGES
As the title implies, these charges are sent each year to leaseholders. They relate to the day to day running expenses of the estate. These charges may vary, depending upon the services supplied by Newham Homes.
Some examples are listed below
:
Caretaking / Concierge Services, Communal Grounds Maintenance, Communal Lighting, Communal Heating / Hot Water, Lifts – electricity and maintenance costs
Minor Repair costs, Communal T.V. Aerial, Management Costs, Buildings Insurance
Ground Rent is charged separately each year. The charge is £10.
When you buy your flat you will be given estimated costs for each of the services that you receive and will be asked to pay a proportion of these amounts, at the completion stage, up to the end of the financial year
.
OTHER REGULAR COSTS
This may seem obvious, but apart from paying your Service Charges you will also need to budget for other routine household expenses. Many of these you will have been paying as a tenant but some you will not have been:
Mortgage Repayments, Life Assurance, Mortgage Protection, Contents Insurance
Property Maintenance – inside the flat, Council Tax, Water Rates, Gas, Electricity
Telephone, H.P. Etc
ADDITIONAL ONE OFF COSTS
The following are some examples of the costs you will have to pay when you purchase your property:
Legal expenses (including those for legal searches)
Land Registry Fees
Survey Fees
Building Society/Bank costs associated with obtaining your mortgage. Stamp Duty.
GENERAL ADVICE
It is very important that you fully understand the implications of becoming a leaseholder.
For this reason it is essential that you discuss any questions or problems you may have with your legal representative before you commit yourself to the purchase. Your lease sets out your legal rights and obligations. This is sent together with the Estate Plan, referred to earlier, directly to your solicitor/conveyancer after you accept the Right to Buy offer.
EXPLANATION OF TERMS
Block
– The building in which your property is situated.
Common Parts
– The parts of the building or estate, which can be used by all the residents, e.g. stairs, lifts, paths, communal gardens etc.
Estate
- The block, any out buildings and any land associated with the block.
Estate Rateable Value
– The total of all the Rateable Values situated within the estate.
Freehold
– Absolute ownership of property and the land on which it stands.
Ground Rent
– A small annual fixed sum payable by a leaseholder to a freeholder in recognition of the legal contract between them.
Leasehold
– An ownership of a property in a building comprising of other flats/maisonettes and subject to the payment of service charges and ground rent for a set period of time.
Rateable Value
– A Property based sum, used originally as a former method of local taxation, but used by us and many other landlords as a reasonable way of apportioning service charges.
Service Charges
– The charges payable by a leaseholder to a freeholder as recompense for the costs incurred in providing services.
If you wish to discuss any of the items contained in this leaflet or anything else to do with your Right to Buy application you may speak to a member of the:
Home Ownership & Leasehold Services Unit
Bridge House
320 High Street
Stratford
London, E15 1EP
Telephone: 020 8430 5544 Fax: 020 8430 6126
Email: HomeOwnership.LeaseholdServices@newhamhomes.com
You can also visit us at www.newhamhomes.com