If you have bought a property in a shared block on a JMB estate, or if you have bought a house that receives services from the JMB and the council, then you will have bought your property under a legal arrangement known as leasehold. This means that you have a legal agreement – the lease – between yourselves and Southwark Council which sets out responsibilities on both sides. You are legally known as the leaseholder of the property and are legally obliged to pay for the shared services you receive through service charges.

This is the legal document that sets out the landlord’s & leaseholder’s responsibilities. Southwark Council is legally the landlord on JMB Estates. Leathermarket JMB is the managing agent for the estates.

Southwark have a number of different leases in operation and the terms can vary between them.

• Maintain, repair, renew and improve the block and estate
• Insure the property
• Levy service charges – these must be reasonable.
• Consult with leaseholders about repairs that will cost individual leaseholders more than £250 (unless repairs are an emergency)
• Consult with leaseholders before letting long term qualifying contracts
• Enforce the terms of the lease

As the leaseholder, you have a number of responsibilities. These are to:

• Pay service charges
• Maintain the property
• Gain written consent from the landlord before undertaking structural alterations
• Give the landlord’s operatives consent to inspect the property
• Not cause a nuisance
• Comply with houses in multiple occupation requirements if the property is wholly sub-let.

Southwark Council has a number of direct responsibilities. These are to:

• Calculate and levy service charges
• Deal with balance & payment enquiries
• Arrange Insurance
• Run District heating (on relevant estates)
• Administer Estates electricity (from 1.4.09)
• Apply ground rent
• Monitor service standards for responsibilities that are delegated to the JMB
• Resolve legal issues relating to the lease

Certain responsibilities are delegated from the landlord to the JMB in a Management Agreement. The JMB is called the “managing agent”.

Our constitution says that the JMB operates for the benefit of members (no distinction between leaseholders and tenants).

Currently 3 of our 10 elected directors are leaseholders. This reflects the balance between leaseholders and tenants on our estates.

Generally, leaseholders contribute to estates works paid for by the JMB and the council.

The one exception is improvement works under the Council’s Cleaner, Greener, Safer scheme which are funded directly by Southwark Council for the benefit of all residents of the area.

Some improvement projects are paid for from money paid by developers carrying out building work nearby to JMB estates. This is known as planning gain or section 106 money.

The legal position around whether leaseholders should pay for these is complex. However, the JMB have been advised not to charge leaseholders for work on two schemes we have recently undertaken with planning gain money.

Homeowners are required to pay their fair share of the cost of managing and maintaining their estate and the services the JMB provides. Each year’s service charges are calcluated for the financial year, which runs from April to March. You should receive an estimate of the following year’s charges in March of each year.

Every autumn, the JMB and the Council’s Home Ownership Unit work out how much we actually spent providing services to your property and estate in the preceding financial year, and

then the Council’s Home Ownership Unit details of the charges. If the amount is higher than the estimate we sent you, you must pay the  difference within one month. If the amount is lower, then the balance will be credited to your account, immediately. We will also send you a statement of your account every quarter.

The calculation of most annual service charge headings are based on a ‘weighting’ method. This assumes that each property has four basic rooms – bathroom and toilet, kitchen, living room and hallway. We then add the number of bedrooms to come to a number of units for each property.

For example a one-bedroom property consists of five units, whilst a three bedroom property has seven ‘units’. Next, we total the number of units in the block – so a block with 5 two-bedroom and 5 three-bedroom properties would total 65 units – and divide this total into the cost of providing the services. This gives us the unit cost.

Finally, the unit cost is multiplied by the number of units for each individual property in order to reach the charge for that property. Consequently, the larger the property the higher the charge.

Homeowners are reqired to pay their fair share of the cost of managing and maintaining their estate and the services the JMB provides. In the past leaseholders were not charged the full cost of the services that they received. Over the past few years, the Council and the JMB have started to identify the costs of services more accurately, identifying costs. Although overall inflation is low, fuel, electricity, lifts and insurance costs increased significantly in 2007/8.

In 2007/08 the JMB stepped up its programme to improve the condition, appearance and up-keep of our estates. Leaseholders pay their share of this improvement work and so will have seen an increase in the repair and care and up-keep elements of leaseholders’ bills.

However, the total costs to leaseholders have been partly offset because between 2006/7 and 2007/8 JMB running costs reduced by £100,000. In particular the staffing costs have reduced by £100,000.

The council estimate what the service charge will be for each property before the start of the financial year. The council send out bills for these amounts and leaseholders should pay this amount within the year it is due.

Between six to twelve months after the end of that financial year the council look at the actual costs of the services that leaseholders recieved in that financial year and work out what the fair share that each leaseholder should pay. They then send out a new bill – the actual bill – which adjusts the estimated bill up or down.

The JMB has produced a breakdown of the Actual service charge bills for 2009-10 that were sent out out early in 2011, showing how the figures had changed on the previous year and how they compare to homes managed by Southwark Council

When major refurbishment works are planned for a particular block or property, there is a two stage process to notify leaseholders that they will be expected to pay the council for their share of the refurbishment. The costs to leaseholders for this work can run into tens of thousands of pounds.

The first stage is that councils send out a Notice of Intention, which gives an outline of the proposed works

When the work has been competitively tendered and the price is known, leaseholders receive a second notification called a Notice of Proposal.

Payment should coincide with works to the block leaseholders live in.

If you’re having problems paying the annual service charge or major works charge for your home you should contact Southwark Council’s Home Ownership Unit to discuss your situation.

If you are not happy with a service you are receiving from the JMB you should contact us so we can put it right.

If the problem goes on longer than is reasonable you should record a complaint in a letter or e-mail. JMB staff should answer/ acknowledge the complaint.

If you don’t think you should be paying for a service because you didn’t receive it or the standard was not good enough you may want to ask for a rebate of some of your service charge. As the actual service charge bills are sent out a year after the close of the financial year the service was received then rebate request may relate to what was going on almost two years ago.

The only way to decide whether a rebate is reasonable is to review written records from that time, so we can only consider rebates if we received a formal complain about the service at the time.