If you own a flat or apartment, you will be required to pay service charges to your landlord. We take a look at what can be included and what to do if you are not happy with the amount requested.
Your lease will include a provision that you must reimburse your landlord for the costs they have incurred in respect of the property. These costs should be reasonable and you should be advised of how the money that you pay will be spent.
Where flats in a building are of differing sizes, larger flats may be required to pay a higher amount in service charges than smaller flats. This will be specified in the lease.
Items that you will usually have to pay for include the following:
- Building repairs and maintenance;
- Ground rent;
- Care of the common areas, to include cleaning, heating, lighting and gardening;
- Buildings insurance;
- Administration charges, for example, where a management company is operating;
- Payment into a sinking fund, which is a pot of money that can be drawn on in the future if a large item of expenditure arises, such as a new roof.
If works are required to the property that will cost more than £50 per flat or £1,000, whichever is more, then the landlord should give you notice of what is proposed to be done as well as two estimates for the job.
Can service charges be challenged?
As well as charges being no more than is reasonable, any work carried out should also be done to a reasonable standard.
You may have the right to challenge your landlord in the following circumstances:
- Where an unreasonable amount has been charged;
- Where the standard of work done is not reasonable;
- Where you have not received a summary of the amounts the landlord is spending;
- Where you have been asked to pay for items that are not included in your lease.
Where you do not believe that the service charges you have been asked to pay are reasonable or lawful, the first step should be to try and negotiate with your landlord to see if you can come to an agreement.
You could consider mediation at this point, to see whether a trained mediator is able to help you and your landlord to resolve issues.
If the matter cannot be solved, then you can ask the First-Tier Tribunal (Property Chamber) to decide whether or not you have to pay a service charge that has been requested.
The tribunal can be asked to rule solely on whether the service charge is reasonable and whether it needs to be paid, to keep costs and time to a minimum. It may be possible for this to be dealt with without a hearing, by sending a copy of the lease with the application.
A leaseholder can also ask the tribunal to appoint a manager if the landlord is making unreasonable demands for service charges or where they are failing to carry out their obligations under the terms of the lease.
If you would like to speak to one of our expert property lawyers, ring us on 0333 305 5189 or email us at info@lpropertylawyers.co.uk
