Common Questions Answered
I own a flat. My Landlord has sent me a service charge demand asking me to pay money. What is a service charge?
A service charge is an amount charged by your Landlord (normally the owner of your building) to you in connection with costs incurred with respect to the property. Examples are services such as cleaning of communal areas, lighting of communal areas, repairs, maintenance, improvements, insurance or management of the property. A Landlord claims the service charge from you by serving a service charge demand.
What can my Landlord include in the service charge demand?
Your Landlord does not have carte blanche to charge you what they like. Your Lease sets out what items your Landlord can claim in a service charge demand. If the item is not in the Lease then it cannot generally be claimed. Service charges must be reasonably incurred. Service charges must be demanded within 18 months of being incurred or alternatively within that same 18 month period you must be notified in writing that the costs had been incurred and you would be required to contribute to those costs under the terms of the Lease for the payment of the service charge. The Service charge demand must be in accordance with the terms of the Lease e.g. your Landlord cannot demand a payment on account of works if the Lease does not allow this.
Is my service charge demand valid?
A service charge demand must contain your Landlord’s name and address otherwise it is not valid and it must be accompanied by a Summary of Rights and Obligations otherwise it is not payable.
What can I do if I think the amounts included in the service charge demand are too high?
If you believe the amounts charged in the service charge are not reasonable you should first raise this with your Landlord or Managing Agents. If you cannot resolve the matter then you can make an application to the Property Tribunal. The Tribunal may determine whether a service charge is payable and if so the amount payable, proportion payable, date payable and manner payable.
My Landlord wants to carry out some major works to the property. Can I take part in the decision making?
If your contribution (or anyone else’s contribution) towards repair, maintenance or improvement exceeds £250 then your Landlord must follow a procedure called a section 20 consultation procedure. That consultation procedure involves the service of various notices etc. and gives you an opportunity to nominate a contractor who you want your Landlord to obtain an estimate from. The section 20 consultation procedure also applies if your contribution (or anyone else’s contribution) towards works or services under an agreement which lasts for more than 12 months exceeds £100. Your contribution to the works will be limited to the amounts mentioned above if the proper procedures have not been followed.
My Landlord is failing to manage the property properly. Is there anything I can do about this?
A group of Tenants can apply to transfer the responsibility and decision making in respect of the property under the Right to Manage legislation. The Tenants form a Right to Manage Company who will take over the day to day control of the building e.g. budgets, services and repairs. The Right to Manage Company can either manage the building or appoint Managing Agents to manage the building. There are a number of eligibility requirements to be satisfied before Leaseholders can go through this procedure. We can advise you on this.
For more information or advice please contact a member of our Landlord and Tenant team.