Service Charge Disputes
There are some certainties in life, one of which is that sooner or later with any leasehold property there will be an argument about service charges.
Service charges are the costs the landlord is entitled to recover from the leaseholders for performing its obligations under the lease such as maintaining the property, insurance, looking after common parts and so on.
These can sometimes be very significant sums, particularly where there is a major item of expenditure in a particular year – replacement windows, roof repairs and lift repairs are some of the most common causes of dispute.
The law in this area is very technical and subject to change at short notice so it can be very difficult to assess whether a landlord is entitled to the sums it claims.
The starting point is always the terms of the lease. The lease will set out what the landlord is responsible for doing and whether and how it is entitled to recover the costs from the leaseholders.
Some leases specify a fixed proportion of the sum due that each leaseholder has to pay – usually calculated by reference to the size of the leasehold property. Many older leases still specify that each leaseholder has to pay a ‘fair’ proportion of the overall cost which can of course lead to a lot of arguments!
For residential property whether and how much service charge is due also depends on whether the landlord has complied with the extensive and complicated legislation governing service charges. There are statutory requirements about the service of notices, the timing of service charge demands and consultation regarding proposed works of particular kinds (section 20 Notices) amongst others.
Leaseholders who are not happy about the amount of service charge they are asked to pay can apply to the Property Tribunal who will decide whether the amount claimed is reasonable and whether it is properly due.
This can be a very technical and difficult process but Gardner Croft can help.
Whether you are a landlord about to embark on expensive repairs or a tenant facing a demand for unreasonable service charges, please contact us.
You can speak to one of our experienced solicitors in a fixed cost initial interview, where we can provide an initial view and discuss with you what steps are required, and any funding options that are available to you.