Service Charge Records for Block and Building Managers

If you manage a block of flats, a mixed-use building or any shared property where occupiers contribute to common costs, the service charge is where trust is made or lost. Owners and tenants rarely object to paying for things; they object to not being able to see what they paid for. Good records are the answer to almost every service charge dispute. The legal framework differs widely by country and by lease, so check your jurisdiction and your documents. The record-keeping principles do not.

Organise by building, then by service charge year

Each building is one record. Within it, each service charge year is a clear unit with a beginning, an end and a reconciliation. Mixing years is the most common source of confusion: an invoice paid in January for work done in November belongs to one year, not both.

The core records for each year

• The budget — estimated costs per heading, how they were arrived at, and when it was issued to contributors.
• The apportionment — how costs are divided: per unit, per floor area, fixed percentages, or different schedules for different parts of the building. Keep the source of each unit's share, usually the lease or the building's governing documents.
• Demands issued — to whom, when, how much, and how delivered.
• Payments received — per unit, with dates, so arrears are visible.
• Invoices and receipts — every one, matched to a budget heading.
• Contracts — cleaning, lifts, insurance, gardening, security, with their terms and renewal dates.
• The year-end account — actual spend against budget, balancing charges or credits per unit, and any certification or review.

Major works need their own file

Roof replacements, lift refurbishments, façade repairs: large one-off projects are where disputes cluster. Many jurisdictions require some form of consultation with contributors before major spend. Whatever your rules, keep:

1. The reason the work is needed, such as a survey or condition report.
2. The specification and the quotes obtained.
3. Every notice sent to contributors and every response received.
4. The decision, who made it and on what basis.
5. Progress records, variations and the final account.

If contributors vote or give consent, record the notice, who was entitled to respond, and the result.

Reserve or sinking funds

If the building keeps a reserve for future works, keep it visibly separate: what was collected into it, what was spent from it and on whose decision, and the balance at each year end. Contributors reasonably want to see that the reserve exists and is not quietly paying for routine costs.

Answering queries

When an owner asks "what is this charge for?", the answer should be one lookup away: heading, invoice, contract, apportionment. Keep a log of queries and your replies. Patterns in the log tell you where your year-end account is unclear.

Safety and compliance documents

Fire risk assessments, lift inspections, electrical and gas checks for common parts: file them per building with their expiry dates, and chase renewals ahead of time. The approach mirrors compliance records for rental properties, applied to the common parts.

How long to keep it

Keep service charge records for at least as long as a contributor could challenge a year, plus the life of any long-running project, and longer for major works that affect future budgets. Build this into a written schedule; see a records retention schedule template.