What Are Service Charges?
Service charges are payments made by leaseholders to cover the costs of managing, maintaining, repairing and insuring a building and any communal areas.
Depending on the terms of your lease, service charges may include:
- Building insurance
- Cleaning and gardening
- Repairs and maintenance
- Lift maintenance
- Fire safety systems
- Managing agent fees
- Utilities for communal areas
- Reserve or sinking fund contributions
Service charges should be administered in accordance with the lease and supported by appropriate records and accounts.
Can Service Charges Be Challenged?
Yes.
Under the Landlord and Tenant Act 1985, service charges are only recoverable to the extent that they have been reasonably incurred and that any works or services are carried out to a reasonable standard.
Examples of common service charge disputes include:
- Excessive management fees
- Poor quality repairs or maintenance
- Lack of supporting invoices or documentation
- Major works costs that appear unreasonable
- Failure to consult leaseholders under Section 20
- Disputes relating to reserve fund contributions
- Charges that are not recoverable under the lease
Your Right to Information
Leaseholders have important rights when it comes to understanding how service charge funds are spent.
These rights may include:
- Requesting a summary of service charge costs
- Inspecting accounts, invoices and receipts
- Reviewing insurance information
- Receiving annual service charge accounts
- Being consulted on qualifying major works under Section 20 of the Landlord and Tenant Act 1985
Access to accurate information is often the first step in resolving a dispute.
The First-tier Tribunal (Property Chamber)
Where a dispute cannot be resolved through discussion, leaseholders may apply to the First-tier Tribunal (Property Chamber).
The Tribunal can determine:
- Whether a service charge is payable
- Whether costs have been reasonably incurred
- Whether consultation requirements have been complied with
- The amount that should reasonably be paid
The Tribunal provides an accessible forum for resolving disputes without the need for traditional court proceedings.
How Archery Estates Can Help
At Archery Estates, we regularly assist leaseholders, directors and freeholders with service charge disputes, service charge accounts, major works consultations and property management issues.
Whether you require a review of service charge accounts, guidance on your rights as a leaseholder or assistance preparing for Tribunal proceedings, we can provide practical advice and support based on real-world experience.
Need Advice?
If you are concerned about service charges, major works costs or the management of your building, contact Archery Estates to discuss your situation and explore the options available to you.