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Leasehold property: service charge problems

With a leasehold property, your landlord (the freeholder) takes care of the common areas of your building. Make sure you know what you will be liable to pay for in advance and what to do if you don't agree with the charges with our top tips

Leasehold Property Service Charges

More than half (54%) of leaseholders say they have encountered problems with their leasehold property including service charges and maintenance fees according to the 2019 annual Homeowner Survey.  The most common complaints from leaseholders relate to high cost of works and management fees (26%) and a lack of control over which major works are done (23%).

Here are some top tips in dealing with your freeholder or management company:

1. Right to know leasehold property service charges

  • Your landlord/freeholder is obliged to give you a statement of your rights every time they demand a service charge. Don’t just file it away, get to know what to expect.
  • Watch out though, not all contracts are the same: although some aspects of the law are universal, some  only apply to the private sector and some are just for the public sector. And not all public sector leases are the same. For example, if you’re a secure tenant in a local authority home you can’t challenge your service charges but if you’re a housing association tenant you can.

2. Get an idea of how much things are likely to cost

  • ARMA (the Association of Residential Managing Agents) estimates the average service charge bill in London at around £1,800 to £2,000 a year. This will of course vary around the country but anything over £5,000 is expensive and you should definitely be asking questions.
  • Ask for a list of any planned major works (i.e. anything costing more than £250 per leaseholder) and ask your landlord to set out estimated service charges for the next five years as well as details of service charge costs for the last three years.
  • If the freehold is owned by a public sector landlord they are legally obliged to estimate major works for the coming six years.

3. Scrutinise every bill your freeholder sends you

  • Section 20 of the 1985 Landlord and Tenant Act says your freeholder must provide you with at least two estimates and give you 30 days notice before major works.
  • But demand more and make sure value for money is a priority: shop around for the cheapest quote and ask for an explanation as to why certain companies have been contracted.

4. If you do have a complaint

  • Speak to your landlord/freeholder – try and settle things face-to-face
  • Speak to other leaseholders – if they are having the same problem you will have a stronger case if you complain together
  • Consult your building’s tenants’ association if you have one – landlords have to consult them about all works and long-term agreements. If you don’t have one set one up
  • Look for advice from other people in your situation.   

5. If consulting fellow leaseholders and the freeholder doesn’t work – what next?

  • Consider a mediation provider – they will help settle the dispute with your landlord for a fee, but it still might be cheaper than court.
  • Appeal to the first-tier Tribunal (Property Chamber). The 1996 Housing Act says you can take your landlords to tribunal if you don’t think the price of the service charge tallies with the level of service provided. Taking the freeholder to tribunal is less formal than going to court, it will never cost more than £500 and, regardless of the outcome, you won’t be told to pay the leaseholder’s fees.

The HomeOwners Alliance can provide members with guidance on leasehold issues. To see how we can help, find out more about becoming a member

6. Consider setting up a “Right to Manage” company

  • If your building has a private sector freeholder, and you can get more than 50% of your fellow leaseholders on board, you have the right to manage your own property by setting up a ‘right to manage’ (RTM) company. You can establish an RTM if:

– The building contains two or more flats
– Two-thirds (or more) of the flats have long leases (typically more than 21 years)
– At least 75% of the block is residential

  • You can also ask your landlords to sell you the freehold at any time and you might even be eligible to demand that they sell it to you.

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  1. Dear Paul – Thanks for the question. If you would like to consider joining the Homeowners Alliance we should be able to provide some help with this. In terms of the charges, he can only charge based on the agreement within the lease. You can look at a tribunal at a later date if you think he is charging for things not covered within the lease documents

    Comment by HomeOwners Alliance — August 23, 2019 @ 2:37 pm

  2. Hi
    I own the lease hold a flat. the previous freeholder sold it on. despite my attempts trying to contact the new freeholder with no reply’s. he has now sent me his management pack after 5 years!
    As I understand it he can only claim for the last 18 months. his monthly service charge is also around £20 over the going rate for that area. I have told him this, but he’s not having it, and he’s saying it will have to go through solicitors.

    any advice ?



    Comment by Paul — August 22, 2019 @ 9:10 pm

  3. Hello Amara, as a first step, have a read through the terms of your lease. The lease will say whether your service charges are fixed or variable. If it says your service charges are variable then it can go up or down and so your freeholder/landlord can increase your service charge provided of course it is reasonable. If you’d like some advice, do consider becoming a member.

    Comment by HomeOwners Alliance — August 6, 2019 @ 4:22 pm

  4. As a leaseholder in zone 4 in a new apartment, I feel like I have absolutely no voice, no rights against this giant bullies private freeholders. I was definitely told that the service charge for a whole year would be £2500 and now it’s £3700. This happened within the space of two years. Just two days ago, I was once again ordered to pay this “insurance costs” at extra £300 pounds. They randomly charge us whenever they want with no advance warnings. We aren’t even consulted, we are not given any options. I am told that legally there’s no way of stopping them charging us extraordinary amounts, there’s no cap? This is shocking, there is literally zero protection for the leaseholders. How is this fair?

    Comment by Amara — August 5, 2019 @ 8:29 pm

  5. On buying our freehold new build a year ago the developer estimated a service charge of £125 pa for each of the 7 houses. Management of the communal courtyard, electric gates and drainage pump was then passed to a property management co who have just billed us £313 for next year, an increase of 150%. Not only are the company levying a management fee of £350 but also an unjustified accounting charge of £300. The other charges are unjustified and seem to be far too high.On complaining to the developer he has offered us and the other residents the chance to manage the courtyard etc ourselves. To do this we would need to set up a company limited by guarantee, appoint directors, keep accounts and I imagine file tax returns. As we are all pensioners without relevant business or legal experience could you please tell us how to go about it, and what limit to place on the guarantors’ liability.

    Comment by James — May 5, 2019 @ 5:17 pm

  6. Hear, hear, Jamal! We’re campaigning for reform https://hoa.org.uk/campaigns/

    Comment by AKerr — July 26, 2018 @ 11:38 am

  7. I am new to this leasehold and Freehold circumstances. But after reading many articles. I think the Leaseholder gets a tough time from the freeholder. It is totally unfair and this Conservative Government stand for the RICH. It’s very stupid that the Freeholder can do anything and the unfortunate leaseholder gets punished. Even the Government mediators are all ex-solicitors who have worked in some capacity for the Freeholders. A Leaseholder is doomed, ever before raising a complaint. The Government should change the Law and make the Freeholder responsible for ALL SOLICITORS CHANGES. Then you will not see the Freeholder miss managing the Leaseholder. But then can you see the Government doing anything? These are the companies that fund the Government. This is a form of bribery from these companies to the Government (who said you can’t buy an MP in England).

    This is very shameful of our Government that they are siding with the evil Freeholders (because they pay the Government Money). I think they should be ashamed of themselves. Who said that Great Britain was a fair Country. They are one of the biggest Crooks sitting in Parliment. It’s like a group of Gangster, stealing money from the Poor and feeding the Rich. STOP FREEHOLDERS ABUSSING LEASEHOLDERS.

    All the Laws regarding Leaseholder and Freeholders should all be reviewed by the Government (but the Government won’t do that). Even some of the new Laws they have added to the statue, have been in favour of the freeholder. They make out that they are creating Laws that will help the Leaseholder, but really they are lying.

    Comment by Jamal Khan — July 24, 2018 @ 9:44 pm

  8. Hi John, we’d need more information but being a pensioner is unlikely to affect payment, though most freehold properties don’t have service charges – are you in a new build home?

    Comment by AKerr — July 19, 2018 @ 9:25 am

  9. Do I have to pay the full service charge amount when I become a pensioner and also a freeholder.

    Comment by john sinclair — July 13, 2018 @ 7:29 pm

  10. Your lease sets out the way the service charge is organised and what can be charged. If you pay a service charge, you have the right to:

    – ask for a summary showing how the charge is worked out and what it’s spent on
    – see any paperwork supporting the summary, such as receipts

    Your landlord must give you this information – according to gov.uk it’s a criminal offence if they don’t.

    Comment by Sara Hind — May 23, 2018 @ 3:27 pm

  11. I am having issues with my management company. They are charging 123.8% in contributions from the property owners – this surely is not legal?

    Any help in pointing me to information that can help will be most appreciated.

    Comment by Heddi Greenwood — May 21, 2018 @ 6:50 pm

  12. Hi John. Unfortunately this is one of the downsides of shared ownership. See our guide for more information – https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/shared-ownership-what-to-watch-out-for/

    Comment by Sara Hind — May 2, 2018 @ 2:50 pm

  13. I own a flat in a block of 30 on a 99 lease with 70/30% ownership.

    We have a Service Charge of £2300 pa.

    The managing agents are also the Freeholder.

    My question is should the repairs be shared equally 70/30% ?



    Comment by John Hughes — May 2, 2018 @ 9:50 am

  14. Hi, myself and other fellow leaseholders have recently acquired back the right to manage from the previous management company who mis managed our building. We are trying to find a transparent and reliable new property management company to assist us and partner with us to get our property in good shape and establish good practises and systems. Could you recommend any websites to help us select a good company? many thanks

    Comment by Louise Minton — November 13, 2017 @ 4:54 pm

  15. Dear Chris,

    It would be interesting to discuss the context to your situation and go over the options available to you, including looking at the lease provisions, valuations and options for buying and selling on. We are also calling for reforms in leasehold systems so perhaps you would consider joining us!

    Best wishes,
    HomeOwners Alliance

    Comment by Sophie Khan — June 21, 2017 @ 1:26 pm

  16. In 1990, all 9 owner-occupier leaseholders of the purpose-built apartments where I live bought equal shares in the freehold. Since then, 6 of the 9 apartments have passed into the buy-to-let market. Determined to extract maximum short-term profit, the absentee landlords have voted themselves onto the Board of the Management Company that owns the freehold and they are neglecting all maintenance by simply failing to take the initiative as regards organising it. As one of the surviving owner-occupiers, here since 1984, I’m outvoted both at leaseholder and freeholder level. The place looks a mess and the value of my apartment is suffering in consequence, I suspect by about x3 more than my share of the cost of the circa £100k works needed. What should I do?

    Comment by Chris — June 21, 2017 @ 12:32 pm

  17. Hi,
    Me and my wife bought a house this November which is freehold however we pay a service charge of almost 50 pounds every month to the notting hill housing as a service charge which we think is outrageous as we pay council tax band D to the council too which is 1452 pounds.
    Is there anyway we can avoid this service charge as I believe they dont do anything which we pay as a service charge to them.

    Comment by Avash shrestha — April 27, 2017 @ 4:31 pm

  18. Can you pls signpost me to where I can get legal information on right to manage my property. Most sight say I can do this if I am in a flat.
    I own 50% of my house and rent the other half to my housing association. There is 6 flats and 9 houses to our development at least one of us owns 100% of his house and the rest of us have half. All of us in the houses would like to have right to manage our property but there is no where I can find information on houses having right to manage
    Many Thanks
    Brenda Matambanadzo

    Comment by Brenda Matambanadzo — April 17, 2017 @ 11:37 am

  19. Hi

    We bought leasehold apartment November 2015
    Service charges have still not been set up, our Insurance has been paid but
    services are almost nil

    I have cleared leaves, vaccummed the stairs and paid to have my own windows cleaned
    Last December I was told Solicitor is working on it. Is there a set period of time for this

    E Sullman

    Comment by E J Sullman — April 10, 2017 @ 3:58 pm

  20. I’m not sure if you can help, where I live I have to pay a service charge even though I own my house , I don’t think I need to pay this as its going up every year , and only the flats benefit , they wont reduce it or even disgush the problem, can you help in any way . many thanks

    Comment by sheryl keyte — January 14, 2017 @ 6:39 pm

  21. We have problems with tenants put in a flat nearby by Southwark Council, but the council do not want to deal with them and instead threaten us with forfeiture should we pursue our complaint about those tenants’ harassment, anti social behaviour and criminal acts. We need urgent advice on the issue and some help if possible.

    Comment by Celia — January 11, 2017 @ 1:36 pm


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