Service Charge Statements Explained: What Every Leaseholder Should Know

For many leaseholders, the service charge statement is one of the most confusing documents they’ll ever receive. Packed with numbers, legal references, and technical terms, it often raises more questions than answers.

In this post, we’ll demystify service charge statements, explain why they matter, and show how RMC directors can present them clearly and fairly.

What is a Service Charge Statement?

A service charge statement is a financial breakdown showing how much each leaseholder must contribute towards the running costs of a block or estate. It usually includes:

• Budgeted Costs: What the directors expect to spend (repairs, insurance, cleaning).
  
• Actual Costs: What was really spent in the accounting period.
  
• Balance/Adjustment: Whether leaseholders owe more (shortfall) or are due a credit.
  

By law, leaseholders are entitled to see a clear statement of how their money has been used.

Why Service Charge Statements Matter

1. Transparency – Leaseholders need to trust that charges are fair and justified.
   
2. Legal Compliance – Statements must meet lease terms and statutory requirements.
   
3. Financial Planning – Accurate statements help directors prepare budgets and manage cash flow.
   
4. Dispute Prevention – Clear, simple communication reduces conflicts between directors and leaseholders.
   

Common Challenges

• Complex Spreadsheets – Directors often struggle to present figures in a clear way.
  
• Timing Issues – Statements arrive late, leaving leaseholders frustrated.
  
• Inconsistencies – Budget vs actual costs can be confusing without proper notes.
  
• Poor Communication – Residents don’t understand what they’re paying for.
  

How to Create a Clear Service Charge Statement

1. Keep it Simple – Use plain English alongside the numbers.
   
2. Break Down Costs – Group expenses by category (maintenance, compliance, insurance).
   
3. Show the Variance – Clearly highlight differences between budgeted and actual.
   
4. Explain Adjustments – State why leaseholders owe more or less this period.
   
5. Use Software Tools – Automating calculations reduces errors and speeds up reconciliation.
   

The Modern Approach

With EstateSync, directors can automatically generate service charge statements that are:

• Easy to read for leaseholders
  
• Transparent, with budget vs actual clearly shown
  
• Integrated with payments and reconciliation
  
• Delivered on time, every period
  

This not only saves directors hours of manual work but also improves trust and reduces disputes.

Final Thoughts

Service charge statements are at the heart of block management. When done well, they provide clarity and build trust. When done poorly, they create disputes and extra admin.

👉 Want to see how EstateSync makes service charge statements clear and stress-free? Book a demo today.