There is much contradictory information on the web that suggests that we can’t charge admin fees unless they’re specified in the lease. I’ve noted the following on your website.”Since the Commonhold and Leasehold Reform Act 2002 came into force it has become possible to levy variable administration charges for breaches of a lease, such as late payment, even if the lease does not specify this.” Could you point me to the specific clauses within the 2002 reform act?
Russell O’Connor replies: Schedule 11 of the Commonhold and Leasehold Reform Act 2002 makes a provision for “responsible” administration charges. See http://www.legislation.gov.uk/ukpga/2002/15/schedule/11 for more information. However, unfortunately, this is where arguments can start. Unless a property lease states that an administration fee can be charged for the purpose of late payment fee, then many managing agents will apply the legislation to cover the costs of having to pursue outstanding balances. The lease is very specific about when charges for ground rent and service charge must be paid by and the lessee can find themselves in breach of the lease for non-payment.
Breach of lease fees are specific to the type of breach that has occurred. The question is, if it’s a breach that the landlord is looking to forfeit the lease against due to none compliance, such as making alterations that could be deemed as unfit for purpose or damaging the rest of the building, any costs associated with the breach are recoverable. This can usually be found under the items of Section 146 notices, or if the alterations are subject to an increase in the freeholders/landlords insurance they can recover this from the lessee in question. However, further information on the situation in question would be needed to give you clear advice.
