Frequently asked questions about service charges

What happens if the flat I want to buy has service charge arrears associated with it?
The previous owner is responsible for the arrears – they must be paid off prior to sale or included as an additional payment with the completion monies.

Why is my service charge so high? Others in the block aren’t paying. What can I do?
The Leasehold Valuation Tribunal (LVT) can determine whether you are liable to pay a service charge.  Be sure to check your lease before applying – it may be that you are obliged to pay a greater share than your neighbours under your lease terms.

I can’t pay/won’t pay. What now?
You should never flatly refuse to pay your service charge.  Try negotiating with your freeholder /management company.  Failing that, apply to the LVT for determination of your liability to pay.

The money is not used in the way I would like what can I do?
Your freeholder / management company is obliged to spend service charge monies on carrying out their obligations as described in your lease.  It is not for a leaseholder to decide if the right decisions are being made.  If you think a cost is not reasonably incurred, the LVT can determined whether the charge should have been paid.

Can the managing agent/freeholder keep increasing service charges?
A service charge must reflect the true cost of providing the relevant service.  If this is not the case, the LVT can determine whether the charge is payable.

We pay the service charge but the work is not done or done, but of a poor quality. What now?
Try to negotiate a reduction with the freeholder / management company.  If this fails, apply to the LVT for determination.

If there is a dispute between the MA or Freeholder and one or more of the leaseholders, resulting in non-payment, how can we make sure that emergency works are carried out?
The obligation to carry out repairs and maintenance will be described in your lease and often exist exclusive of the leaseholder’s obligation to pay the service charge.  The County Court can enforce the freeholder / management company’s obligations to carry out repairs or maintenance works.

Can we use a mediation service to resolve our problems?
Indeed.  Mediation is a voluntary process whereby the participants seek to agree out-of-court how they are going to resolve their dispute.  It is often cheaper to enter into mediation than take a matter to court or tribunal.

We can’t agree on the right service charge level. What now?
Apply to the LVT for determination.

The management element of the service charge is too high. What can I do?
The LVT is also empowered to determine administration charges, such as management charges.  An application to the LVT can result in a decision of the level of management charge you are liable to pay.