The lease will set 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, like receipts, supporting the summary
It’s a criminal offence if your landlord won’t provide you with this information.
You don’t have to pay ground rent unless your landlord has sent you a formal, written demand for it. However, if your landlord sends you a demand in the correct form, and you don’t pay it, they can take legal action against you.
If your landlord hasn’t charged you ground rent for several years, they can only recover it going back 6 years. They can ask you for the full amount in one go.
Your landlord can only increase the ground rent if you agree to the increase or the lease says this can happen.
In most cases, your landlord will arrange the insurance of the building (not the contents) and charge you the cost as a service charge.
You have a right to:
- ask for a summary of the insurance policy
- challenge the cost through the Residential Property Tribunal if you think it’s unreasonable
Reserve or sinking funds
You might have to pay into a fund to help cover any unexpected maintenance or repairs, like replacing the roof. There are rules about how landlords must manage these funds.
Usually, you won’t be able to get back any money you pay into them (for example, if you move).
Consulting over charges
You have the right to be consulted about charges for running or maintaining the building if you have to pay more than:
- £250 for planned work
- £100 a year for work and services lasting more than 12 months
There are steps your landlord must follow when they consult you, known as a ‘Section 20’ consultation. If you aren’t consulted properly, there’s a limit on how much you have to pay.
Disputing a charge
You have the right to appeal to the Residential Property Tribunal if you pay a variable charge and you:
- think the charge is unreasonable
- think the standard of work it relates to is unsatisfactory
- don’t think you should be paying it at all
You can’t apply to the tribunal if:
- you’ve agreed to pay the charge
- the dispute is already being dealt with, eg by the court
- you pay a fixed charge
If this is the case, try mediation or taking over management responsibilities from your landlord.
If you’re disputing a charge, don’t withhold a payment without first getting professional advice. If you don’t pay a charge you’re responsible for, your landlord might take you to court to recover the money.
For full information on service charges and other issues, see the leaflet from the Leasehold Advisory Service (LAS).