If you own a leasehold flat, you will be required to pay service charges to the landlord, their managing agent or the management company. It is important to check that the charges are fully explained and that they are reasonable. We look at what the landlord should provide and when a leaseholder can challenge service charges.
As a flat owner, you own the interior of your home, while the exterior building, any communal areas and the outside space are owned by the landlord. They will deal with expenses such as maintenance and buildings insurance and will charge you a monthly sum to cover these costs.
What service charges can a landlord make?
The lease will set out what charges the landlord can make. These commonly include the following:
- Buildings insurance
- Maintenance of common areas
- Building repairs, to include work on windows, doors, roof, walls and utilities
- Management costs
- Utility bills for communal areas
- A contribution to a sinking fund, which is money held to cover large items of future expenditure, such as a new roof
- Improvements, such as adding electrical charging points
- Ground rent
What must a landlord provide to a tenant in respect of service charges?
The landlord must provide the tenant with a proper service charge demand and ground rent demand. The amount requested must be for expenses that are reasonably incurred. If the charge is for costs that have not yet been incurred, the sum requested cannot be more than what is reasonable for the proposed work or other expense.
The tenant has the right to a summary of the service charge breaking down how the figures are calculated and what the money will be spent on. They can also request supporting documentation, such as quotes for work and receipts. It is a criminal offence for a landlord to fail to do this.
When can a leaseholder challenge service charges?
There are several grounds on which service charges can be challenged, including:
- The lease does not allow some or all of the charges, for example, the landlord has passed on the costs of the managing agent, but the lease does not allow them to charge for this
- The service charges were not correctly requested, for example, the lease requires the landlord to provide quotes for work before charging for it, and this was not done
- The lease does not allow the landlord to collect money in advance of work being carried out
- The landlord neglected the property and the repairs and maintenance costs have arisen because of this neglect and it is therefore unreasonable to expect the leaseholder to pay for these
How to challenge
Where possible, you should try to resolve matters directly with the landlord, their managing agent or the management company. This is quicker and generally less expensive than other options.
A property solicitor will be able to advise you on the wording of your lease and outline your rights. They can contact the landlord and negotiate on your behalf. Contact from a property solicitor can help focus minds on finding a solution
If an agreement cannot be reached, you can apply to the First-tier Tribunal (Property Chamber), which is a court that specialises in leasehold and other property disputes. The tribunal will decide whether you should pay the service charge or not.
While a dispute is ongoing, you should continue to pay service charges and ground rent, or you will be in breach of your lease and you risk losing some of your rights.
Contact us
If you would like to speak to one of our expert property lawyers, ring us on 0333 3055 249 or email us at info@leadingpropertylawyers.co.uk.
