© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Another change in the landscape is that tenants increasingly wear two hats: more and more lessees have exercised the right to collective enfranchisement or the right to manage and thus become their own landlord. Lessees who run their own freehold or RTM companies see both sides of the service charge divide and need to be more aware than anyone of service charge rights and liabilities.
What's in this supplement?
The price of legislation to enhance lessees’ rights has been complexity. The intent of this special supplement to News on the Block is to provide a guide through the service charge jungle. A team of specialist contributors has been assembled to provide a series of articles which deal with all aspects of service charges step by step; starting with the fundamentals such as the exact meaning of “service charge” and taking the reader through the procedures for consultation, payment, accounting, to how to collect or dispute a service charge.
You will also find at www.newsontheblock.com a suite of precedents which may assist you with the various stages of collecting or disputing the service charge.
And what of the future?
The future, possibly, might be an end to “service charges”. The Government preference is that long leasehold tenure should be replaced by Commonhold. “Commonhold assessments”, once decided upon by the Commonhold association, are not subject to much statutory control. But if this ever happens, it be many years hence. For the foreseeable future, service charges will remain a fact of life.
Some practical advice
If you are eagerly reading this supplement, there's a fair chance that you are in some sort of dispute or potential dispute over elements of a service charge (because let's face it, service charges may be important but bed-time reading they are not). Before you dive into the details of the statutory controls, I would offer some practical wisdom:
(1) Before considering any statutory material, go through the terms of the lease carefully. Then go through them again. It is astonishing how many disputes about the reasonableness of service charges simmer on when the lease itself does not permit the recovery of the disputed item.
(2) There are usually one or two “big ticket items”; of substantial value and/or which are of particular concern to the lessees. Concentrate on those. It is tempting to challenge everything because “we might as well since we are going to the LVT anyway”) but the result is often to create a case which is a “monster” - hard for the parties to settle and hard for the tribunal to determine. Shorter cases are heard more quickly.
(3) Try to maintain a sense of perspective. Tenants have to recognise that repairs have to be paid for and if there was no service charge nothing would be maintained. Landlords are well advised to consider carefully what the tenants have to say – they may have a point; there may be errors in the accounts.
(4) It is a myth that lawyers and judges like technicalities. Leasehold Valuation Tribunals look for the merits. You, the tenant, may have found a few technical defects in a landlord's notice but if the landlords have done necessary work and done it properly at a reasonable cost, they'll probably win. Landlords need to appreciate that if they have a bad track record, they will get little sympathy.
(5) If the landlord is a tenant-owned company, think carefully about the long-term consequences of a service charge dispute. Tenant-owned companies can find it difficult to raise loans or capital, particularly if they have granted new, very long leases to the tenants. Insolvency, and the loss of tenant control of the block, may result if service charge costs are incurred but not paid.