Service charges and other expenses
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 - it’s a criminal offence if they do not.
Ground rent is a payment to your landlord that might be included in your lease. Your landlord does not have to provide a service in return.
If your lease was granted before 30 June 2022
You do not have to pay ground rent unless your landlord has sent you a formal, written demand for it. They can take legal action if you do not pay after you’ve received the demand.
Your landlord can recover unpaid ground rent 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.
If your lease was granted on or after 30 June 2022
You usually cannot be charged anything more than a ‘peppercorn’ ground rent after this date. The value of this is zero so you will not have to pay anything, but it forms a legally binding contract with your landlord.
You can read more about the Leasehold Reform (Ground Rent) Act 2022.
If you bought a lease from another leaseholder on or after 30 June 2022
You will still have to pay ground rent to your landlord if this is in your lease. The changes only apply to new leases granted on or after 30 June 2022.
Your landlord will usually be responsible for insurance of the building (not the contents) - this will be part of your service charge.
You have a right to:
- ask for a summary of the insurance policy
- challenge the cost through a 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.
You will not usually be able to get back any money you pay into them, for example if you move house.
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 per 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. There’s a limit on how much you have to pay if you have not been consulted properly - contact Leasehold Advisory Service for advice.
Disputing a charge
You may be able to apply to a tribunal if you pay a charge and you:
- think it’s unreasonable
- think the standard of work it relates to is unsatisfactory
- do not think you should be paying it at all
Contact Leasehold Advisory Service for advice.
You cannot apply to the tribunal if:
- you’ve agreed to pay the charge
- the dispute is already being dealt with, for example by the court
- you pay a fixed charge
Your landlord can take you to court if you stop paying a charge you’re responsible for.
The Leasehold Advisory Service has more information on service charges and other issues.