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Leasehold Service Charge Disputes

Paying unreasonable service charges? Challenge them.

#At a Glance
Difficulty ā­ā­ā­ Complex
Time to DIY 4ā€“8 hours
Potential Saving Ā£100sā€“Ā£1,000s per year
Time Limit 18 months (some charges)
Escalation First-tier Tribunal

#What Is It?

If you own a leasehold flat, you pay service charges for:

  • Building maintenance and repairs
  • Communal area cleaning
  • Insurance
  • Management fees
  • Ground rent
  • Sinking/reserve funds

These charges must be reasonable and the work must be done to a reasonable standard. If not, you can challenge them.

#Your Rights as a Leaseholder

#Right to Reasonable Charges

Service charges must be:

  • Reasonably incurred ā€“ the work was necessary
  • Reasonable in amount ā€“ not overpriced
  • Properly demanded ā€“ correct paperwork

#Right to Information

You can request:

  • Summary of costs incurred
  • Inspection of receipts and invoices
  • Details of insurance policies

#Right to Consultation (Section 20)

For major works costing any leaseholder over Ā£250:

  • Freeholder must consult before starting
  • You can nominate contractors
  • Without consultation, your contribution is capped at Ā£250

#Right to Challenge

You can apply to the First-tier Tribunal (Property Chamber) to determine whether charges are reasonable.

#Am I Eligible to Challenge?

#āœ… You can challenge if:

  • Charges seem unreasonably high
  • Work was done to a poor standard
  • No proper consultation on major works
  • You're being charged for work not covered by your lease
  • Management fees are excessive
  • You weren't given proper notice of charges

#āŒ You can't usually challenge:

  • Charges you've already paid without dispute (after 18 months)
  • Ground rent (unless incorrectly calculated)
  • Charges clearly specified in your lease

#Step-by-Step Process

#Step 1: Request a Summary of Costs

  • Write to your landlord/managing agent
  • They must provide a summary within 1 month (or 6 months if year-end accounts not ready)
  • This is a legal right under Section 21

#Step 2: Inspect the Accounts

  • Request to see invoices and receipts
  • You have a right to inspect within 6 months of receiving the summary
  • Copy charges may apply

#Step 3: Raise Concerns in Writing

  • Write to the freeholder/managing agent
  • Explain which charges you dispute and why
  • Request explanation or reduction

#Step 4: Apply to First-tier Tribunal

If not resolved:

  • Apply to FTT (Property Chamber)
  • Tribunal determines if charges are reasonable
  • Low cost (Ā£100ā€“Ā£300 application fee)
  • No risk of paying other side's costs

#Section 20 Consultation Requirements

For works costing any leaseholder over Ā£250, the freeholder must:

Stage Requirement
Notice of intention Describe proposed works, invite observations
30 days Allow leaseholders to respond
Estimates Obtain at least 2 estimates (or consider nominated contractors)
Notice of estimates Share estimates, invite observations
30 days Allow leaseholders to respond
Award contract Can proceed with works

If consultation wasn't done: Your contribution is capped at Ā£250 regardless of actual cost.

#Evidence You'll Need

  • Your lease (shows what you should pay for)
  • Service charge demands
  • Summary of costs
  • Invoices you've inspected
  • Comparable quotes (if challenging value)
  • Photos (if challenging quality of work)
  • Correspondence with freeholder/agent

#First-tier Tribunal (Property Chamber)

If informal resolution fails:

  • Apply online: First-tier Tribunal (Property Chamber)
  • Fee: Ā£100ā€“Ā£300 depending on issue
  • Process: Written submissions, possible hearing
  • Decision: Binding determination of reasonable charges
  • No costs risk: You won't have to pay landlord's legal fees if you lose

#Common Issues to Challenge

Issue Argument
Management fees too high Compare with market rates (typically Ā£150ā€“Ā£300 per flat per year)
Insurance overpriced Get comparable quotes from mainstream insurers
Poor quality work Photos, independent report
No consultation Contribution capped at Ā£250
Charges not in lease Lease is the contract ā€“ they can't charge for things not covered
Admin fees excessive Should be proportionate to actual work

#Common Questions

Q: The freeholder is intimidating ā€“ am I protected?

Yes. It's illegal for a freeholder to harass you for exercising your rights. Document any intimidation.

Q: I've already paid ā€“ can I still challenge?

After 18 months, charges become harder to challenge. But payments "under protest" or with reservation can still be disputed.

Q: What if other leaseholders don't want to challenge?

You can challenge individually, but collective challenges are stronger. Consider forming a residents' association. LEASE provides free legal advice for leaseholders.

Q: Can I withhold service charges?

Risky. Non-payment can lead to forfeiture proceedings. Better to pay under protest and challenge through the tribunal.