Elizabeth Place

*Ground Rent is a separate charge, paid independently of the service charge.

Many of our homeowners are pleased to find that the service charges for their apartment tend to work out at less than what they were paying in like-for-like costs at their previous property.

Energy bills often turn out to be lower thanks to the modern construction methods we use at all our developments. Your new apartment is also likely to be a more manageable size and so cheaper to run.

When Customers discuss the purchase of a McCarthy & Stone apartment with us, they receive a service charge leaflet and our Sales Executive sits down with them to help them fill in the costs, review what is covered in the management services and compare them to day-to-day running costs in their current home.  Our Sales Executive ensures that they have a detailed knowledge of ongoing costs before a sale is completed

Ground rents are payable on leasehold properties in England and Wales. As with all leasehold properties in England and Wales, ground rents are a condition of the lease for our apartments. They are set by McCarthy & Stone at the outset of the development and are clearly highlighted during the sales process to all customers.

The level of ground rent reflects the size of the development and the level of service it provides. Our ground rents are typically between c.£400-£500 per year depending on the product, number of bedrooms and location. Our regional teams can provide more detail if needed. Within the M25 area, they range from c.£500-£600 per year. Our regional teams can provide more detail if needed.

Ground Rents are fixed for 15 years. They are reviewed on the fifteenth anniversary of the date of commencement of the term and each successive fifteenth anniversary from that date. Increases are linked to either the movement in the Retail Price Index (RPI) since the last review, or if greater, by 2% per annum, and is compounded yearly.

There are differences between one and two bed apartments. McCarthy & Stone sets the difference at a figure which it considers fairly reflects the size difference in apartments. While it would be possible to base the difference on actual square footage, this would be a complicated exercise and would lead to minor variations in ground rents between comparable apartments within any given development which would be administratively complex and could cause confusion.

The ground rent does not increase after the 125th anniversary even though our new leases are for a term of 999 years.

The service charge budgets represent those costs that would be expected to be incurred in a normal year of operation with a full development. It is the intention of McCarthy & Stone Management Services to ensure the service charge budgets are set as accurately as possible. Where possible, we try to keep annual increases in line with inflation although certain costs such as Utilities can have inflationary pressures that are outside of our control. Typically, our developments have shown a slight surplus to date, which is refunded each year to homeowners within six months of the end of the period. 

It is important that customers do not face any unexpected financial burdens in their new home resulting from, for example, the need to undertake any major refurbishment or structural repairs on the development. In order to provide confidence that there is enough money available to meet this work, the service charge includes a small charge to help cover unexpected costs such as these. This is called the Contingency Fund, and is similar to a ‘sinking fund’. It is a specific fund kept in the development’s own bank account. It is held in trust and its use is restricted to the maintenance of that development and cannot be accessed by McCarthy & Stone. It is there for the benefit of all homeowners and finances the replacement of carpets and furniture in the shared areas and longer-term repairs and renewals such as roofs, window frames and replacement of lifts.

In order to keep this weekly cost – and hence the service charge – to a minimum, the development’s specific Contingency Fund is ‘topped up’ by a one-off charge of 1% of the resale price upon the sale of the apartment, in addition to a small charge in the service charge.
With regard to subletting on leases prior to October 2014, we will charge a concessionary rate (irrespective of the provisions in the lease, which may be higher) of one month’s rent for each year that the apartment is sublet (or pro-rata for less than a year).

This is a concession from the terms of the lease which are in essence one month’s rent for each six month sublet period.  This concession will apply for a maximum period of two years, after which time we will revert to the terms of the lease. 

For leases from October 2014, the subletting contingency fee has been reduced to a contingency fee of 1% of the annual rent (or pro-rata for under-letting of less than one year).  Where the underletting is for more than a year, the contingency fee is 1% of the annual rent payable annually on the anniversary of the commencement of the term.

There is also a small administration fee collected by MSMS / YLMS to cover their costs to check that the incoming occupier meets the terms of the deed of conditions (i.e. meets the age criteria and is capable of leading an independent life) and provide information about the development, the service charge and insurance. Contact our Property Transfer team on 01202 508299 for more details.