Service Charge Disputes

Landlords charge service charges to recover their costs in providing services to a building. The manner in which service charges are calculated are usually set out in the lease or tenancy agreement. The charges usually cover the costs of services such as general maintenance, repairs, buildings insurance, central heating, lifts and lighting and cleaning the shared areas.

Service charge disputes between freeholders and leaseholders can take many forms. Typically, service charge disputes surrounds:

1. Unreasonably high charges.
2. Incorrectly calculated fees which fail to take into account the method of calculation set out in the lease or tenancy agreement.
3. Charges for things which are not covered by the lease/tenancy agreement.
4. The failure by a leaseholder in not paying the service charges.

Generally, it is advised that service charge disputes are dealt with efficiently and without recourse to formal litigation.

However, whether litigation is unavoidable, both leaseholders and freeholders have a right to ask the tribunal whether a charge or a proposed charge is “reasonable”. It is important to note that the law does not define “reasonable”. 

Once an application has been made to the tribunal, may consider the circumstances surrounding the charges and where the charges are relating to work completed at the property, whether the work was carried out to a reasonable standard. 

The tribunal will make the following decisions:

1. Whether the service charge must be paid under the lease.
2. Who must pay the service charge and who they must pay it to.
3. The date on which the service charge must be paid.
4. How the service charge can be paid.

Where a leaseholder fails to pay the service charge, a freeholder may take steps to forfeit the lease.

Whether you are a leaseholder or a freeholder, we will take steps to:

1. Understand the nature of the service charge dispute. 
2. Attempt to resolve the matter without recourse to the tribunal.
3. Drafting applications to the tribunal.
4. Assisting you in navigating the processes and procedures of the First Tier Tribunal.
5. Representing you at the tribunal in the event of a service charge dispute.