Q&A - Unreasonable Service Charges

ANSWER

The first step is to request a budget for the anticipated costs, leaseholders are entitled to know how this calculation is made. Most, modern leases will provide with the interim demand the landlord/management company provide a budget at the start of the financial year. In the absence of this provision in the lease, the leaseholder is correct in raising a request of what is incorporated in the total. 

The managing agent on behalf of the client should provide this information, this is a reasonable request. 

Leaseholders can make a s27A Landlord & Tenant Act 1985 Application where this information is/is not provided to seek the “reasonableness” of the costs being demanded, this can be done for interim demands too. Transparency is best, managing agents should provide this information. 

The Tribunal process can be lengthy and costly, so it is best to share this information, it is leaseholders’ money they should know how it is or will be spent. 

40% is a noticeable increase, there may be a reason for it, insurance increase, roof works anticipated, future reserves – but volunteer this information.

Zainab Khatoon, Business Development Manager & Solicitor, Realty Law