Updated
GL-S-07
01 / In 30 seconds
The short answer
- What it is
- A regular payment for the upkeep of the common areas of a complex or building
- What you pay for
- Cleaning, security, lifts, pool, landscaping, insurance, management
- How it is calculated
- Usually in proportion to the area of your property
- What to check
- The current amount, how it has grown and whether there are arrears on the property
- The hidden risk
- Special levies for major repairs on top of the regular payment
02 / In plain words
What Service charge / Community fee means
A service charge (community fee) is a regular payment for the upkeep of a complex’s common areas: cleaning and security of the grounds, maintenance of lifts, the pool and parking, landscaping, building insurance and the work of the management company. The amount is usually calculated in proportion to the area of your property.
It must be paid whether or not you live in the property: it is not a metered utility bill but a share of the common costs. In complexes with extensive facilities — pools, gyms, concierges, security — the charge can be substantial and noticeably affect the final return on the investment.
A separate risk that sellers rarely warn about is special levies. When major repairs to the façade, roof or building services are needed, owners bear the costs on top of the regular payment. That is why, before buying, you look not only at the current charge but at how it has grown, the condition of the building and whether there are arrears on the property.
A case from practice
In a complex with extensive facilities, the service charge turned out to be a significant item of expenditure and noticeably changed the yield calculation. The client learned the exact figure and its history of increases before the deal, not after the first bill.
When it matters
- Buying a flat in a complex
- Calculating the rental yield
- A property with extensive facilities
- Buying on the secondary market
- Assessing the costs of ownership
- Checking the seller’s arrears
03 / What it covers
What to check about the charge
Amount
- Current rate
- Basis of calculation
- Payment frequency
What is included
- List of services
- Level of facilities
- Building insurance
History
- How it has grown
- Past special levies
- Condition of the building
Debts
- Arrears on the property
- Who is liable on transfer
- Certificate of no arrears
04 / How it works
How to check before buying
Request the current charge
Look at how it has changed over the years
Check the arrears on the property
Include it in the yield calculation
Decision on the property
05 / Key facts
What you need to know
01
The payment does not depend on whether you live in the property
02
The amount is usually proportional to the area
03
Extensive facilities mean a high charge
04
Special levies for repairs arise in addition
05
The previous owner’s arrears may pass with the property
Common mistakes
- Not asking the amount of the charge before the deal
- Not checking the previous owner’s arrears
- Ignoring how the payment has grown
- Not including the charge in the yield calculation
- Not finding out the condition of the building and plans for repairs
06 / Expert advice
How to prepare in advance
Before the deal, official information is requested: the current charge, how it has changed in recent years, whether there have been special levies and whether major works are planned. A certificate of no arrears on the property is obtained separately — in some countries debts pass with the real estate.
What we do for you. We include the service charge in the yield calculation and check the arrears on the property before the deal. It is one of those items sellers mention last, yet it has to be paid for years.
Igor VentsHead of real estate, Title Deed and property checks
07 / Questions
Frequently asked questions
A regular payment for the upkeep of a complex’s common areas: cleaning, security, lifts, facilities, insurance, management.
Yes. It is a share of the complex’s common costs, not payment for metered services consumed.
Usually in proportion to the area of your property. The exact procedure is set by the complex’s documents.
An additional payment for major works — repairs to the façade, roof or building services. It arises on top of the regular charge.
In some countries, yes: the debt is attached to the property. That is why a certificate of no arrears is obtained before the deal.
Directly: the charge is deducted from rental income. In complexes with extensive facilities it can eat up a noticeable part of the profit.
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