How to challenge unreasonable service charges

A service charge is a payment made by a leaseholder to a landlord or managing agent to cover building maintenance, costs for repairs, and insurance. There may be grounds to challenge this service charge if there is a lack of transparency, and there are hidden costs or misspent maintenance fees also being covered.

The landlord & Tenant act 1985 states that service charges are only recordable by landlord so far as costs have been reasonably named of reasonable standard.

There are a number of steps which can be followed to dispute an unreasonable service charge.

1. Review your lease: check your lease agreement to understand if your charges align with the agreement in the lease.
2. You should then gather evidence materials and documentation to support your claim that the charges are unreasonable. This can be done by comparing similar rates from other landlords who offer similar services.
3. The leaseholder should then take up the matter with their landlord, providing them with eh evidence obtained as to why they believe the charges are unreasonable.
4. If this does not go well or if the landlord is uncooperative, the leaseholder should speak to a legal professional for advice- dispute resolution is also an option.
5. If none of the above work effectively, the leaseholder can apply to the first-tier tribunal (property chamber) to formally challenge the service charge.

The first-tier tribunal (property chamber) and how it works:

The first-tier tribunal determines whether a service charge is payable or not. You can challenge the reasonableness of service charges as long as you have not formally or informally agreed or admitted that the service charges are reasonable.

Remedy for unreasonable service charges:

Usually, if the payment of service charges has already gone through, some proportion may be refunded back to the leaseholder.