Reduction in service charge due to coronavirus - furloughed staff

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    Reduction in service charge due to coronavirus - furloughed staff

    Hi All

    I am on residents association in a large block managed by developer / managing agent. As a result of the UK lockdown many non-essential services are being cut back e.g. gym staff, concierge, post room. Is it right to expect a substantial rebate on service charge? Some staff are paid by the hour while others will be on a fixed salary. Is it reasonable for leaseholders to insist that the freeholder claims the 80% of wages under the furloughed staff scheme just announced?

    #2
    Whether any rebate would be reasonable, or should be paid at all, would depend on precisely what your lease says regarding service charges (and regarding the availability of things like those you mention), and whether any savings are actually made (which will likely depend on the details of staff contracts and whether or not the freeholder can expect the government to pay staff if they are laid off).

    If you have already paid service charges in advance, the lease may state that any money that isn't spent goes into a reserve fund, or is carried over to the next service charge year. If the lease does require repayment of unspent service charges, this is likely to not be before the end of the year, and after final accounts for the year have been produced.

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