Thursday, November 23, 2006

Pay attention to property service charges

Property industry is rapidly maturing. Service charges are forming an important part of any property deal. Investors are paying more attention to the sales and purchase agreements.

Service charges include the cost of maintaining a building. Most property owners living in apartments or villa compounds with shared facilities have to pay them, because it is the only manageable way to share the costs of looking after the property.

Service charges cover things like repairs, cleaning, security and shared amenities such as porters, community gardens or swimming pools. One is supposed to pay a small share of everything even if he or she does not use some of the services.

Service charges form a vital part and a clause on the same must appear in the sales and purchase agreement. Before signing any property contract, service charges should be clarified.

The agreement should state what services you are paying for, how the landlord or property manager will collect payment, how the amount is calculated, how it is divided between tenants and whether there is a 'sinking' or reserve fund.

The tenant is entitled to check whether costs are reasonable. The buyers must necessarily insist on transparency.

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