Cost Classifications

Cost Class Cost Category Cost Description Cost Notes

1. Management
a. Management Fee
i. Owner’s or Manager’s Fee for managing and administering the services that are
permitted to be recovered under the terms of the lease, excluding rent
collection, asset management, etc.
b. Accounting Fee
i. Service Charge accounting fee
1. Fees for preparation of year-end service charge statement and
reconciliation
ii. Independent accountant’s fees
1. Independent accountant’s fees to review the year-end service charge
accounts.
iii. Audit fees
1. Auditor’s fees for carrying out a formal audit of the service charge.
c. Site management resources
i. Staff costs
1. Direct employment or contract costs for provision of staff for
management of on-site facilities.
ii. Receptionists/concierge
1. Direct employment or contract costs for provision of reception and
concierge staff, including associated administrative and training costs.
iii. Site accommodation (rent/rates)
1. Rent, service charge and rates associated with the site-management
accommodation.
iv. Office costs (telephones/stationery)
1. Day-to-day running costs of the on-site management office.
v. Systems
1. Costs of computer licences, etc. and other systems
vi. Help desk/call centre/information centre
1. Operational costs for providing helpdesk/call centre/ information centre
facilities.
vii. Administration fee
1. Fees for HR and payroll costs associated with dealing with on-site staff
(where not included as part of the management fee).
d. Professional fee
i. Landlord’s risk assessments, audits and reviews
1. Consultancy fees and other costs associated with provision and review
of owner’s health and safety (H&S) management systems.
 ii. Other professional fees
1. Fees of specialist consultants engaged in respect of the provision of
services
iii. Legal fees
1. Legal advice in respect of the placing or termination of contracts for the
provision of services
2. Utilities
a. Electricity
i. Electricity supply to common part and retained areas and central plant,
excluding the direct consumption of occupier(s)
b. Gas
i. Gas supply for the owner’s central plant, excluding the direct consumption of
occupier(s).
c. Fuel Oil
i. Fuel-oil supply for the owner’s central plant, emergency generators, etc.,
excluding direct consumption of the occupier(s).
d. Water
i. Water supply to central plant, common part and retained areas, excluding direct
consumption of the occupier(s).
e. Utility Consultancy
i. Consultancy and procurement fees incurred for negotiating, reviewing, auditing
and reporting on all utilities.

3. Soft Services
a. Security
i. Security guarding
1. Direct employment or contract costs incurred in providing security
guarding for the building(s).
ii. Security systems
1. Servicing and maintenance of building security systems (e.g. CCTV,
access control, intruder alarms, etc.).
b. Cleaning and sustainability
i. Cleaning
1. Cleaning of common-part and retained areas.
ii. Window cleaning
1. Cleaning of external windows.
iii. Hygiene services/toiletries
1. Cleaning and servicing of common-part toilets and toiletry
accommodation.
iv. Carpets/mats hire
 1. Provision of dust and rain mats to common-part areas
v. Waste management
1. Refuse collection and waste-management services provided for building
occupiers
vi. Pest control
1. Pest-control services provided to common-part and retained areas
vii. Snow clearance/road gritting
1. Costs incurred in clearing snow and supplying snowclearing equipment
and gritting salt
c. Landscaping and environment
i. Internal floral displays
1. Providing and maintaining floral displays within the common part areas.
ii. External landscaping
1. Provision and maintenance of external landscaped areas and special
features.
iii. Seasonal decorations
1. Provision and maintenance of seasonal decorations to common-part
areas.
iv. Events and entertainments
1. Events and entertainments within the common parts areas
d. Marketing and promotions
i. Marketing
1. Marketing and advertising in accordance with marketing strategy
ii. Research
1. Research into local market conditions, customer surveys, pedestrian
flow counting systems, etc
iii. Marketing staff costs
1. Direct employment of staff or staff contract costs for marketing and
promotional activity.
iv. Landlord’s contribution to marketing
1. Financial contributions made by landlord towards marketing and
promotions.
4. Hard Services
a. Mechanical and electrical services (M&E)
i. M&E maintenance and repair
1. Planned maintenance and repair of the owner’s M&E services, including
the contractor’s H&S compliance
ii. Life safety systems maintenance and repair
1. Planned maintenance and repair of the owner’s fire protection,
emergency lighting and other specialist life safety systems, including the
contractor’s H&S compliance
iii. H&S (mechanical and electrical)
 1. Works carried out to M&E plant and equipment in accordance with H&S
regulations or recommended best practice.
iv. M&E/life safety systems inspections and consultancy
1. Auditing the quality of maintenance works and the condition of M&E
plant and life safety systems to ensure H&S compliance
v. Car parking M & E maintenance and repairs
1. Maintenance and repair of entry systems, payment systems, car
counting systems and other specialist car park equipment
b. Lifts and escalators
i. Lift maintenance contract and repair
1. Maintenance and repair of lifts in the common part and retained areas,
including the contractor’s H&S compliance.
ii. Escalator maintenance and repair
1. Maintenance and repair of escalators in the common part and retained
areas, including contractor’s H&S compliance
iii. H&S (lifts and escalators)
1. Works carried out to lifts and escalators in accordance with H&S
regulations or recommended best practices
iv. Lift and escalator inspections and consultancy
1. Auditing the quality of maintenance works, the condition of lift plant
and H&S compliance.
c. Suspended-access equipment
i. Suspended-access equipment includes all forms of high-level access equipment
maintenance, e.g. hatchways, eyebolt, fall address and cradles.
1. Suspended-access maintenance and repairs
a. Maintenance and repairs to the owner’s suspended access
equipment, including the contractor’s H&S compliance
2. Suspended-access inspections and consultancy
a. Auditing the quality of maintenance works, the condition of
suspended-access equipment and H&S compliance
d. Fabric repairs and maintenance
i. Fabric repairs and maintenance
1. Repair and maintenance of the building structure and fabric common
parts and retained areas.
ii. Redecoration
1. Redecoration and decorative repairs
iii. H&S (Fabric)
1. Works carried out to building fabric in accordance with H&S regulations
or recommended best practice.
iv. Building fabric inspections and consultancy
1. Auditing the quality of maintenance works, the condition of the building
and H&S compliance
 v. Car park fabric maintenance and repairs
1. Maintenance and repair of the car park structure, fabric and road
surfaces
5. Income (Distinct activities that yield a true income to the service charge account.) Income
yielded from any facilities installed and/or maintained at the occupier’s expense
a. Income
i. Car park income
ii. Commercialisation income
iii. Vending machine income
iv. Gift card income
v. Other income
b. Income operating expenses
i. Operating expenses
1. Overheads, expenses and operational costs incurred in providing any of
the income streams, including gift cards
ii. Bank charges and transaction costs
1. Cash collection costs, transaction fees related to income
iii. Staff costs
6. Insurance
a. Engineering insurance (Landlord’s engineering insurances)
i. Engineering insurance
ii. Engineering inspections
b. All-risks insurance cover
i. Building insurance
ii. Loss of rent insurance
iii. Public and property owner’s liability
iv. Landlord’s contents insurance
c. Terrorism insurance(Landlord’s terrorism insurance cover)
i. Terrorism insurance
7. Exceptional Expenditure
a. Major works
i. Project works
1. Exceptional and one-off project works, over and above routine
operational costs
ii. Plant replacement
1. Replacement of the whole or major components of plant and
equipment (where beyond economic repair).
iii. Major repairs
1. Significant one-off repairs or maintenance costs over and above the
costs of routine operational maintenance and repair
b. Forward funding
i. Sinking funds
 1. Forward funding of specific major replacement projects (e.g. plant and
equipment replacements, roof replacements, etc.).
ii. Reserve funds
1. Forward funding of specific periodic works to even out fluctuations in
annual service charge costs (e.g. internal/external redecorations).
iii. Depreciation charges
1. Depreciation charge in lieu of sinking/replacement fund contribution for
major plant and equipment costs.
iv. Agreed contribution to future works
1. Forward funding of major projects but where the lease does not allow
for a sinking or reserve fund to be set up. This is a voluntary
arrangement and must therefore be agreed in writing between the
owners and individual occupiers and full details provided within the
notes to the service charge expenditure report.
8. Miscellaneous Charges
a. Irrecoverable VAT
i. Irrecoverable VAT
1. Cost of any irrecoverable VAT (if not included in headings above).
b. External contributions
i. Contributions from eternal parties
ii. Contributions to external parties