Unwelcome Christmas present – challenging a service charge.
Every year many flat owners face an unwanted Christmas present in the form of a service charge demand. For tenants who adhere to the “usual quarter dates”, a service charge will be due on the 25th December. It’s not surprising therefore that this time of the year will typically see an increase in service charge challenges.
Landlords are usually obliged under the terms of their leases to ensure that their properties are kept in good repair all year round.
In order to do this, a landlord will usually recover their expenses for repairing and maintaining their developments by way of a “service charge”. This service charge is divided (sometimes equally, sometimes not) between the tenants.
Sometimes, a lease may allow for reserve or “sinking” funds. This means the landlord can collect sums of money from the tenant to accumulate a fund for future works that may be more expensive than routine maintenance.
Of course, there are a number of usual arguments from tenants about “unfair” service charges or contributions.
Here are some examples of “unfair” service charges that we hear almost on a daily basis: –
“but I’m on the ground floor and don’t use the lift”
“the roof is not directly above me, why should I pay towards repairing it”
“I don’t live in the property so don’t use the gym”
Regardless of whether you actually use or directly benefit from every common area or facility, if the lease allows for the landlord to include costs for repairing and maintaining them, they will be included within the service charge.
If a tenant is unhappy with their service charges and doesn’t believe that they are reasonable, it is never advisable to withhold payment of the service charges as this could put a tenant at risk their lease being forfeited. Instead, it would be advisable to pay the service charge whilst pointing out to the landlord (or their agent) that the payment is strictly on a ‘without prejudice’ basis.
Tenants are able to challenge the service charge by making an application to a Property Tribunal to determine whether or not a service charge is reasonable.
The key message for tenants is to check the terms of their lease to see what can be included within the service charge and what their proportion is.
If you receive a service charge demand that you think is unreasonable and would like to see whether it can be challenged please contact Dani Green on 020 7288 4751 or firstname.lastname@example.org