A service charge can be one of the most costly expenses associated with owning a leasehold property. The charge covers the cost of services, maintenance, and repairs provided in a shared building or development, so it’s typically levied on properties with multiple units sharing common areas and amenities, like apartment blocks.
The specific services and costs covered by the service charge should be detailed in the lease agreement. It’s important to carefully review the terms and conditions associated with the service charge, including any provisions for annual increases or special assessments, to understand their rights and obligations. You also have the right to ask the landlord or building management company for a summary of the service charge calculation, and even receipts or paperwork to justify that calculation, as per the government website.
However, many leasehold property residents report problems with their service charges, with the government reporting that it’s looking to reform the system. In this blog, we’ll explore those problems more deeply, covering the eight most frequently encountered issues that leasehold property owners often struggle with in regard to their service charges.
1. Overcharging
The first and most common issue is that of overcharging. In several instances, tenants pay hefty amounts for services they haven’t used. For instance, recently, a group of neighbours in Greenwich managed to reclaim £318,000 in fees from their housing association due to such overcharges. If you find yourself trapped in such a predicament, it’s advisable to request a comprehensive breakdown of the costs. Our team of solicitors can guide you through this process and advise on potential legal remedies.
2. Lack of clarity
The lack of transparency is another issue that raises its head frequently. According to a survey by Keller Williams UK, 96% of leasehold homeowners would like to see more transparency on how their service is calculated. Our team can help you decipher the complexities of your service charge, providing clarity on costs.
3. Unexpected costs
Unexpected costs are charges for services that seem excessive and lack proper explanation. Our expert solicitors can help you gather estimates, challenge these costs, and determine whether they are consistent with prevailing market rates.
4. Inadequate management
Poor property management can contribute to many problems. If the quality of work continues to be below par, tenants could consider applying to a tribunal for an impartial evaluation. Our team can assist you in escalating your concerns, ensuring your rights as a tenant are upheld.
5. Complexity of challenging
Appealing charges can be complex, but tenants have the power to gather their quotes, compare rates, and take the matter to a tribunal if necessary. Our experienced solicitors can guide you through the process, ensuring your interests are represented.
6. Inconsistent billing
Consistent billing often results in clarity and satisfaction among tenants. If your billing isn’t consistent, our team can help you request a detailed breakdown of the costs and, if necessary, approach a tribunal.
7. No sinking fund
The lack of a sinking fund – a financial pool created to cover future significant works and maintenance, is a common issue. Our team can advise you on the best course of action if you find yourself in this situation.
8. Lack of communication
Radio silence regarding management changes can dramatically impact the tenant’s experience. Our team can help ensure you stay abreast of any changes and provide clear and detailed explanations for any new costs you encounter.
How We Can Help
Navigating service charge issues in the UK can be a daunting task. However, it can be managed with the correct information, a proactive approach, and the assistance of experienced professionals. Experience in this area is key to successfully challenging any service charge issues.
If you’re facing any of the above issues, our team of expert solicitors are on hand to support you. Get in touch with our Property Disputes team, or call us on 0330 111 3131.