I purchased my flat in 2015. Since then, my service charges have more than doubled from £1,200 to £2,800. 

What is the best way to challenge them? AD

Any charges must clearly be reasonable and if you suspect they are not - and have done your research - there are ways to effectively challenge any increases

All charges must be reasonable. If you suspect that they are not, and have done your research, there are ways to challenge any increases.

Myra Butterworth,  MailOnline property expert, explains: Service charges will continue to rise. 

Service charges are a proven way to make money for investors as the Government clamps down on other developer and freehold revenue streams like ground rents. 

This sector is still unregulated and open to abuse. It is not unusual for property managers to invoice for services fees above 10% to oversee major work – this is on top of the residents’ annual service fee bills.

However, charges must be reasonable. If you suspect that they are not, and have done your research, there are ways to challenge any increases.

It is important to get as much support from other residents as possible and to present your case in a reasonable, documented manner.   

Stephen Gold, a retired judge who is also an author, explains the following:Your house or flat lease will make you pay a service fee. It is as common as parking tickets and Ultra Low Emission Zone. But you are more vulnerable to attack.

You can challenge the amount you are being asked to pay, regardless of whether you are being told by the landlord, their managing agents, or for cleaning the stairways or for insuring the building.

Did the front door’s paint begin to peel six months after the decorator finished his last sandwich 

First, the lease must include all items that are included in the service fee. 

If the lease does not cover a specific expense, the landlord is in trouble.

The second requirement is that the expense was reasonable. 

Do you think new windows were necessary? Or could the old windows have been repaired at a fraction of the cost?

Third, the job or service must be done to a reasonable standard. Did the paint on the front doors begin to peel within six months of the decorator’s last sandwich? And did the porter skip breakfast and sleep most of the time that he was there?

Finally, the price must be reasonable. Was the going rate in the area for a gardener who can’t tell the difference between an orchid and a weed really £35 an hour?

Stephen Gold is a retired judge and author

Stephen Gold is a retired judge, author, and teacher.

Residents’ association 

Hunting in groups gives you more power, so get as many co-tenants and residents to support any challenge.

Tenants with a lease for more than 21 years will be able to get free advice from the Government-funded Leasehold Advisory Service by calling them. However, this service is limited to 15 minutes so speak fast.

Ask for quotes from other contractors if you feel the work is too expensive.

Download the free service fee residential management code, issued by the Royal Institution of Chartered Surveyors. This code outlines best practice for landlords as well as their managing agents.

It’s similar the highway code. Breach of the code could be a good thing.

Your starter should be a letter or email to the landlord/managing agents. 

Template email to the managing agent 

Your starter should be a letter to the landlord/managing agents. It’s unlikely that it is worth spending a stamp on it so you should use e mail if you can.

“We refer you to your 2020/1 service fee demand. We are arguing that the items in the attached schedule to this letter do not have to be paid by us for the same reasons. 

We have calculated that our liability should be limited to the sum of £x instead of £y as claimed. We invite you to revise the demand to £x and to notify your decision on this within 28 days of the date of this letter. 

If you are not prepared to accept £x, it is our intention to make an application to the First-Tier Property Chamber (Residential Property) (or, in Wales, the Leasehold Valuation Tribunal) to reduce the demand under the Landlord and Tenant Act 1985. 

If you file a claim before the application is made, we will ask the court to transfer the proceedings the tribunal. We are told it is possible to do so. 

We will ask the tribunal and/or county courts under section 20C, 1985 Act for an injunction prohibiting landlord costs and expenses to resolve the dispute from being added as a future service fee.

Important is the section 20C in the template email. The landlord may allow the landlord to add their costs and expenses to a demand to be made.

This could mean that you and co-tenants will end up paying for the privilege to take on the challenge, even though you win.

The lease language would prevail over the rule in a small county court case or in the tribunal that you are only liable for the winner’s expenses if you act unreasonably. It’s a trap. 

The section 20 C order can eliminate this trap. It can be made in any place it is ‘just’ and equitable to do so. You might say, “That wording is a fat bunch of good.” I understand. Let me put it this way… you have a good chance of an order being made.

Do I have the right to refuse to pay the service fee? 

What do you do if the deadline for paying the service charge is near? 

Pay the minimum amount that you were charged. If the landlord is trying to force your mortgage lender into paying you by threatening to seize your lease, let the lender know about the dispute. 

If paying part makes you twitchy and you don’t want to pay, pay the entire amount and tell the landlord you are disputing the charge and that you will challenge it at a tribunal. 

If the tribunal supports you, the landlord will have the right to recoup what you have overpaid.

Future disputes will likely see the pandemic resurface. It was reasonable for the managing agents not to charge their usual fee if they weren’t managing as expected due to staff being off work or working less hours. 

Is the furloughing benefit included in their overheads? Should certain services not be stopped or reduced?

The lease will probably permit the landlord to add their costs and expenses - and that includes lawyers' bills

The landlord will likely be allowed to add their costs and expenses to the lease – this includes legal fees

Here’s my favorite successful challenge in a case that went to the Court of Appeal in 2017. 

It involved the replacement of windows and cladding in 10 blocks of flats in Isleworth. 

The landlord was the local authority. Some flats were occupied in part by ex-tenants from council who had purchased them under a ‘right to purchase’ scheme. 

One lady received a demand for £55,000 towards this work and some other items. 

However, the windows were not in disrepair and had suffered from an inherent design defect that related to a failure of the hinges. 

The hinges could have been replaced for £140 a pair although the problem would have eventually recurred with new hinges. 

The new windows had a twice the life span than the UPVC windows that were installed at a lower price.

The Court of Appeal ruled this type of work, which was considered improvements, must be approached differently from repairs. 

When making improvements, a landlord had to consider the extent and interests of paying tenants, their views, as well as the financial impact if the proposed works were carried out. 

Tenants in a luxury block in Knightsbridge might find it easier to cope with a bill for £50,000 than tenants of a former council flat in Isleworth. 

It was not enough to rely on the lease as justification for undertaking a costly improvement scheme. The bill would only be paid by the tenant who challenged.

Happy service charges for you all

  • Stephen Gold is an ex-judge, and the author of “The Return of Breaking Law”, published in Bath Publishing. For more on service charge defences, go to www.breakinglaw.co.uk 

What are your options for getting value from your property manager?

Disgruntled Leaseholders There are three main options to addPoor property management

1. One solution is to buy the freehold, but the flat owners may not be able to do this for a variety of reasons, such as not having the required minimum number of leaseholders in the block to buy it.

2. One step down from buying the freehold, you can file a Right To Manage request to the First Tier Tribunal (Property Chamber), to resolve property management disputes. 

The tribunal is part the courts system and is a leaseholder friendly option for those who can’t afford lawyers. You will be able to manage the block, and you will need to create your own company to supervise it. 

In reality, another property manager will be hired to manage the block. This will allow you to have more control over the process. You should seek professional advice. 

3. Perhaps the simplest way to deal with poor property managers is ask the Tribunal to decide whether the service charges are reasonable and for this, you will not need a solicitor. The Tribunal must investigate any application you make via it. 

This can reduce your monthly property management fees and even result in money being repaid. You can get free advice at www.lease-advice.org