Service charges – new rights

Service charge demands will shortly fall due for many flat and maisonette owners across the country.

With bills sometimes adding up to four figures, it always makes sense to check service charge demands and know what to do if there is something awry. However, some understanding of what the law says is required for a challenge to be successful.

Even after paying the bill, it can still be challenged so long as it hasn’t been specifically admitted or agreed that the charges are payable.

According to The Leasehold Advisory Service, the government’s free legal advice service for leaseholders and landlords, the first thing to do is read and understand the lease.

Liability to pay for a particular service usually depends on what the lease says. However, if the demand is unreasonably high or the standard of work unacceptable, then the law can be used to challenge the charge.

“An over-riding principle is that service charges must be reasonable this means they must be reasonably incurred and are only payable if those services or works are of a reasonable standard,” said Tony Essien, Chief Executive of the Leasehold Advisory Service. “If you believe that works undertaken or services provided fail  to meet reasonable standards, write first to the landlord or their managing agent raising your concerns and state why you believe that the charges are unreasonable.”

If this is unsuccessful, leaseholders can consider using a mediation service such as the one provided by The Leasehold Advisory service (www.lease-advice.org).  If, however, the landlord is unwilling to go to mediation. then armed with the evidence that shows the charge is unreasonable, leaseholders can make an application to the Leasehold Valuation Tribunal (LVT) asking them to determine how much of the charge is payable. An LVT should prove to be a relatively quick and inexpensive way of resolving a dispute. Though most applications to the LVT are subject to payment of a fee, this is presently set at a maximum of £500.

leaseholders do have a right to ask for more information about a service charge bill and can ask the landlord for a written summary of costs incurred during the previous accounting year (or, if there is not one, the 12 months up to the date of the request). They must send it out within six months of the end of the last accounting period or within one month of the request – whichever is later. It’s then possible to send a written request to the landlord asking to inspect accounts, receipts and other documents supporting the summary within 6 months of receiving it.

Later this year, new rules come into force requiring landlords to provide annual service charge information that will include a ‘Statement of Account’ detailing service charge information without leaseholders needing to make any special requests. Some landlords and managing agents are already providing such detailed summaries.

Further information and a downloadable advice guides are available from The Leasehold Advisory Service at www.lease-advice.org or anyone concerned can speak to one of the LEASE team of lawyers on 020 7374 5380. Their advice is completely free.

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