Service charge reconciliation

Service charges have to be reconciled at least once a year, comparing:

• the total advances paid by the tenants,
• against the expenses the landlord actually incurred over the year.

If the advances come to more than the real expenses, the landlord repays the overpayment to the tenant; if they come to less, the landlord asks for the difference.

The landlord has to be able to justify the charges recovered.

Recoverable expenses included in the calculation

First, you have to record the recoverable expenses in the “Finance” section. To do so, add one or more expenses from the “Charge récupérable” family (recoverable charge).

When you create a recoverable charge, you can enter the following:

• The recoverable amount from the tenant,
• The period,
• The service charge split (if you have set up specific keys on your buildings).

The allocation rules — general shares or specific keys — set up on each building are used when the reconciliation is calculated. Communal expenses attached to a building are split and fed into the calculation using those rules.

Here is the list of expenses taken into account in the calculation:

• “Syndic : Provisions pour charge” (property manager: service charge advances)
• “Syndic : Arrêté des comptes : Charges récupérables” (property manager: final accounts, recoverable charges)
• “Charge récupérable : Entretien de l’immeuble et des équipements” (recoverable charge: upkeep of the building and its equipment)
• “Charge récupérable : Consommations communes” (recoverable charge: communal utilities)
• “Charge récupérable : Consommations personnelles” (recoverable charge: individual utilities)
• “Charge récupérable : Taxe d’enlèvement des ordures ménagères” (recoverable charge: waste collection tax)
• “Charge récupérable : Autres” (recoverable charge: other)
• Any other expense marked as recoverable.

Income included in the calculation

Here is the list of income taken into account in the reconciliation:

• The service charges shown on rent-type income
• “Paiement du locataire : Charges locatives” (tenant payment: service charges)
• “Paiement du locataire : Taxe d’enlèvement des ordures ménagères” (tenant payment: waste collection tax)
• “Paiement du locataire : Taxe foncière” (tenant payment: property tax)

How is the service charge reconciliation calculated?

To reconcile the charges accurately, it is essential to fill in, for every recoverable charge expense, the recoverable amount, the period and the property or tenancy it belongs to.

If the property is in a block with a managing agent, then when you receive the annual final accounts showing the service charges, create a new expense of the type “Syndic : Arrêté des comptes : Charges récupérables” and enter the recoverable amount. If you have already recorded the estimated charges during the year, tick the “Amount for information only” box so they are not counted twice in the “Finance” section.

To reconcile the service charges:

1. Go to the “Tools” section, then select “Service charge reconciliation” (in the main menu on the left), or use the actions on the right in the “Tenancies” section.
2. Enter the period, then click “Continue”.
3. At the next step, check the amount and the details of the reconciliation, then click the “Confirm” button.
4. The reconciliation — the amount, plus a document setting out the calculation — is saved to the database and appears in the “Finance” section.

The site takes the service charge advances paid by the tenant (the amount set on the tenancy) for the period selected, along with the recoverable charges whose amounts you entered in the “Finance” section. It then works out the difference and creates an income or an expense according to the result.