Budget
The first budget, produced for the sales brochure, is based on the anticipated costs. Every attempt is made to ensure this first budget is as accurate as possible because if there is not enough money in the bank account to meet obligations you will be faced with a deficit which you must pay on top of next year’s service charges. However, budgeting is not a precise science and at the end of the year there will probably be either a surplus or a deficit. The surplus will either be credited against the next service charge account or may be placed into the contingency fund.
Even whilst the development has not been completely finished and Millstream has not taken over the management in full, you are still obliged to pay the service charges asked for. Any monies not spent will be held in the development’s individual bank account until the end of the financial year and the accounts have been audited.
In subsequent years the service charge budget will be based wherever possible on actual expenditure in the previous periods taking into account any inflationary increases or allowance for planned expenditure. Owners will be consulted on the draft budget, in order that any views/queries may be considered prior to the budget being finalised.