Introduction to Service Charges

Service Description

This College of Block Management (CBM) course provides RMC and RTM directors with a clear and practical understanding of how service charges work, how funds should be managed, and the responsibilities directors carry when overseeing leaseholder money. Service charges are often the most contentious aspect of residential block management. Directors are responsible for ensuring that costs are reasonable, properly incurred, and transparently communicated — yet many have never been shown how the system works in practice. This session breaks down the full service charge cycle, from setting a budget through to year-end accounts and recovery of arrears. You will gain a clear understanding of how budgets are prepared, what should be included, and how to assess whether costs represent value for money. The course also explains how service charge funds must be handled, including the requirement for proper accounting, transparency, and the holding of funds in trust for leaseholders, as well as the importance of clear reporting and communication. You will learn how to interpret service charge accounts, understand variances against budget, and identify potential issues or areas of concern. The session also covers the legal requirements for issuing valid service charge demands, including the need for correct documentation and statutory summaries. Finally, the course addresses one of the most challenging areas for directors — service charge arrears. You will gain an overview of how arrears should be managed, the escalation process, and the balance between firm recovery and maintaining relationships within a residential community. • By the end of the session, you will have a clear understanding of: • How service charge budgets are prepared and reviewed • What service charge accounts show and how to read them • How service charge funds should be held and managed • The legal requirements for valid service charge demands • How to approach and manage arrears This course is designed to give directors the confidence to oversee finances effectively, ask the right questions, and ensure transparency and accountability in the management of leaseholder funds. If you haven’t done so already – download our free comprehensive e-book: