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I had the pleasure of working with Lawhive doing a transfer of equity on a property. Our solicitor’s service was amazing, she responded quickly to any questions or concerns and kept me updated throughout the process. I can strongly recommend her for any conveyancing work that you may need. Fantastic service all round.
Jane
Amazing experience
After placing an enquiry, I received a call 20 minutes later, and then 2 hours later, I had a solicitor assigned to me. They were absolutely incredible right from the word go - amazing and very prompt with replies, answering all my questions and keeping the process moving. We finally completed today and I am so unbelievably happy. I wouldn’t hesitate to use Lawhive again in the future if needed.
Lily
First class service
I initially made an online enquiry about a tricky conveyancing matter and received an immediate call back. They understood straight away what was needed and gave me a quote that was very reasonable. It was such a pleasure to find someone who was cheerful, professional and completely reassuring as I’d been getting quite anxious about the sale of my house. The service Lawhive has provided is absolutely first class and I cannot recommend them enough.
Charles
Empathetic, professional and efficient
I am an executor, selling my mother's home. I found the assistance I received from Lawhive first rate - empathetic, professional and efficient.
Mark
Great service from Lawhive
We used Lawhive for our conveyancing needs and our solicitor was very helpful, patient and informative. She helped us with our needs with prompt responses and provided a very efficient service.
Kelvin
Great service when you need clarity and calm
Our solicitor was warm, friendly and provided crystal clear communication. A lot of conveyancers assume customers know everything about the process already, so it was really appreciated to hear each stage included in the price given.
Em
Quick and efficient
We used Lawhive for a transfer of property and conveyancing. Our solicitor was so helpful and thorough with the whole process. He responded quickly and efficiently to any questions or requests that we had and explained some of the more complicated issues regarding the process clearly.
Geri
Fantastic service and experience with Lawhive
I had the pleasure of working with Lawhive doing a transfer of equity on a property. Our solicitor’s service was amazing, she responded quickly to any questions or concerns and kept me updated throughout the process. I can strongly recommend her for any conveyancing work that you may need. Fantastic service all round.
Jane
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01 overview
As homeowners and tenants strive to maintain their properties and communal spaces, it is common for service charges to become a main point of conflict. These charges, there to cover the costs of essential services and upkeep of shared areas, often spark disagreements that can quickly escalate.
In this guide, we'll explore the reasons behind the rising tide of disagreements, the legal responsibilities of property owners and managing agents, and the avenues available to those seeking to challenge what they believe are unjust charges.
In this article, we will cover:
Service charges fund everything from routine maintenance to communal facility upgrades when renting spaces in a communal living set-up. They are like a shared bill for certain costs that come with living in an apartment or a housing development.
You will pay a certain amount of money every month, along with your fellow neighbours, to cover things that everyone benefits from, like taking care of the building, shared gardens, or maybe a gym - fancy!
If you live in an apartment building or a community with shared spaces, these are things that everyone needs to contribute to. The money you and others pay for these shared costs is called a service charge.
While service charges are supposed to be fair and cover the things everyone benefits from, often there can be disagreements. People sometimes feel they're paying too much towards the service charge or in fact not getting their money's worth. That's when service charge disputes happen.
Service charges make sure that everyone in a shared property or development contributes to the upkeep of the communal spaces within the property, making it a fair system for maintaining a good living environment for all residents.
The service charges cover a variety of areas such as:
What it is: This covers the administrative costs of managing the property. It includes things like paperwork, maintaining records, and general management tasks.
Example: Paying for the time and effort it takes to process paperwork for things like lease extensions or changes in property ownership.
What it is: This covers the cost of insuring the building.
Example: If there's damage to the building due to a fire or flood, the insurance helps cover the cost of repairs.
What it is: Some properties, especially leasehold properties, require payment of ground rent to the person or company who owns the land the property is on. It is important to note that the Leasehold Reform (Ground Rent) Act 2022 put an end to ground rents for most new long residential leasehold properties in England and Wales, replacing them with a peppercorn ground rent. The Act came into force for most new leases on 30 June 2022 and from 1 April 2023 for leases of retirement homes.
Example: An annual fee paid to the landowner for using the land where your apartment building is located.
What it is: This covers costs associated with managing the overall estate or property development. It could include things like security, communal area maintenance, or shared facilities.
Example: Paying for a management company to maintain shared gardens, playgrounds, or security services for a housing development.
What it is: This is a reserve fund set aside for future major repairs or renovations.
Example: Putting money aside each month to save up for a new roof or major repairs to the building's structure.
Several legal acts and regulations govern service charges to ensure fairness and transparency in property management.
The key legal references you should be aware of are:
The Landlord and Tenant Act 1985 sets out the rights and responsibilities of landlords and tenants, including regulations regarding the reasonableness of service charges, the provision of information about costs, and dispute resolution mechanisms.
This act introduced various reforms to leasehold property law, including regulations on consultation requirements for major works, restrictions on the recovery of service charges if certain procedures are not followed, and the establishment of the First-tier Tribunal (Property Chamber) to hear leasehold disputes.
These regulations set out specific consultation requirements for landlords when proposing certain works or entering into long-term agreements. This ensures that leaseholders have a say in significant decisions that may impact service charges.
These regulations require landlords to provide a summary of rights and obligations related to service charges to tenants. It aims to improve transparency and help tenants understand their rights.
This order introduces competition into the property management sector, allowing leaseholders to choose their own property manager under certain conditions.
While not specific to service charges, this act outlines consumer rights, including the right to receive services that meet certain standards. It can be relevant in cases where service charges cover the provision of services.
These rules govern the procedures of the First-tier Tribunal (Property Chamber), which is the forum for resolving disputes related to service charges and leasehold matters.
It's important to note that these acts and regulations may be changed, so you should consult the most recent versions for the latest information. Additionally, legal advice may be necessary to work through specific situations or disputes related to service charges in the UK.
Service charges are often paid monthly, quarterly, or yearly. These charges go into one pot to cover things like building maintenance, insurance, and maybe even a fund for big future repairs.
The timing and amount you are required to pay are usually mentioned in your lease agreement or a similar document.
It's super important to keep an eye on what you're being charged for and make sure it's fair. If you're not sure, you should ask your landlord or property manager for details.
Sometimes, the charges might change for various reasons. You should be given notice before that happens.
Remember, it's your right to know what you're paying for and why. If you ever feel unsure or think something's not right, don't hesitate to ask questions. Understanding service charges helps you be a smart and informed resident!
The reasonableness of service charges is controlled by various laws, particularly the Landlord and Tenant Act 1985.
It's essential to review your lease agreement and any related documents to understand what is considered reasonable in your specific situation.
Key areas to note within the Act are:
Service charges should only cover costs that are reasonable and directly related to the services provided. This can include maintenance, repairs, insurance, and other agreed-upon services.
Landlords are usually required to consult with tenants before making decisions on certain significant matters, especially those that may significantly impact service charges. This ensures tenants have a say in the decision-making process.
The charges should be transparent, and you should be able to understand what you're paying for. Landlords are often required to provide a summary of your rights and obligations, as well as details about the costs incurred.
If the landlord or managing agent enters into an agreement with a third party for services, the cost should be competitive. This is to prevent overcharging and ensure that you're getting a fair deal.
The services provided should be of a reasonable standard. For example, if you're paying for maintenance, it should be carried out to a reasonable quality.
There are legal procedures in place for challenging service charges if you believe they are unreasonable. The First-tier Tribunal (Property Chamber) is a forum where you can dispute service charges if needed.
The charges should be applied consistently to all tenants in a fair manner. It wouldn't be fair if one tenant is charged significantly more than others for the same services.
If you have concerns about the reasonableness of service charges, you have the right to seek advice and, if necessary, challenge them through legal channels. Always communicate with your landlord or managing agent if you have questions or need clarification on service charges.
The cost of service charges can vary widely based on factors such as the type of property, the services provided, and the location. However, according to estate agent Hamptons, at the halfway point of 2023, the average charge is £1,431, equating to £119 per month.
Service charges are unique to each property, and the amount is typically outlined in the lease agreement or terms of the property management. For example, service charges for flats, apartments, or houses within managed developments often cover costs like communal area maintenance, cleaning, and security. In contrast, standalone houses may have lower or no service charges, as there are fewer shared facilities.
Larger developments with more shared facilities may have higher service charges to cover the increased maintenance and operational costs. For example, if your property has a concierge, gym, or communal gardens, these can contribute to higher service charges.
To find out how much service charges are for a specific property, you should check your lease agreement or contact the property management company or landlord. They should provide a breakdown of the costs and services covered by the service charges.
There is no specific legal cap or limit on the amount that can be charged for service charges. However, the reasonableness of service charges is a key principle outlined in the Landlord and Tenant Act 1985. This means that while there isn't a fixed maximum amount, service charges must be reasonable and justifiable based on the services provided and the costs incurred.
For certain major works or long-term agreements, landlords are required to consult with tenants before incurring expenses. This is to ensure transparency and allow tenants to express their views on proposed costs.
Landlords are obligated to provide tenants with a summary of their rights and obligations regarding service charges. This document should outline the general rules and procedures related to service charges.
Yes, you can dispute a service charge if you believe it is unreasonable or if you have concerns about how it is being calculated or applied.
Several factors could be deemed as unreasonable in regards to a service charge such as:
Remember, whether a service charge is deemed unreasonable is often subjective and depends on the specific circumstances of each case. If you believe your service charge is unreasonable, you have the right to dispute it through channels such as communication with your landlord, seeking professional advice from an expert property solicitor, or applying to the First-tier Tribunal (Property Chamber).
Disputing a service charge involves a series of steps. Here's a general guide on how to go about it as well as a service charges dispute resolution flowchart that you can follow easily.
Start by discussing your concerns with your landlord or managing agent. Clearly outline the reasons you believe the service charge is unreasonable and request an explanation.
Read your lease agreement and any related documents. Understand the terms and conditions regarding service charges, what they cover, and any specific procedures for disputing charges.
If you're unclear about specific charges, request detailed information from your landlord or managing agent. They should be able to provide a breakdown of costs and explain how the service charge is calculated.
Landlords are required to provide a summary of rights and obligations related to service charges. Review this document to understand the procedures for disputing service charges and the options available to you.
If communication with your landlord does not resolve the issue, consider seeking professional advice. A solicitor or surveyor specialising in leasehold matters can provide guidance and may be able to offer an expert opinion.
If the dispute remains unresolved, you have the right to apply to the First-tier Tribunal (Property Chamber). The tribunal is an independent body that hears disputes related to service charges and other leasehold matters.
When preparing to dispute a service charge, gather evidence to support your case. To initiate the tribunal process, you'll need to complete the necessary forms and submit them to the First-tier Tribunal (Property Chamber). The tribunal will review the evidence and make a decision.
Before pursuing formal legal action, you may be encouraged to participate in mediation. Mediation involves a neutral third party facilitating a discussion between you and the landlord to find a resolution.
Whether you can claim back service charges in the UK depends on the circumstances surrounding your situation.
If you believe you were charged more than what is reasonable for the services provided or that the charges were applied incorrectly, you may have grounds to claim back the overcharged amount.
If there are charges included in your service charge that are not justified by the terms of your lease agreement or are not related to the services provided, you may have a basis for claiming them back.
For major works or long-term agreements, landlords are required to consult with tenants before incurring expenses. If the landlord failed to consult or did not provide adequate information, it may affect the validity of the charges.
If the services covered by the service charge were not provided adequately or were of poor quality, you might consider seeking compensation for the lack of service.
Refusing to pay a service charge in the UK can have serious consequences and should be approached cautiously. While there are instances where you may dispute or challenge a service charge, simply refusing to pay without justification is generally not advisable.
Service charges are usually a contractual obligation outlined in your lease agreement. Failure to pay may be considered a breach of that contract.
This could lead to legal action, damage to your credit rating, and even the possibility of losing your home through forfeiture (in extreme cases).
Rather than withhold payment of service charges, it is sometimes better to pay them but make it clear (in writing) that you are paying under protest. This means making it clear that, while you are paying, you do not agree with the service charges and reserve the right to challenge them in court.
Landlords can demand service charges as specified in the terms of the lease agreement. The timing and frequency of service charge payments are typically outlined in the lease, and landlords must adhere to the agreed-upon terms.
Landlords may require tenants to make advance payments for anticipated service charges. This is common, especially when service charges cover ongoing maintenance and expenses.
Landlords are also typically required to provide tenants with notice before demanding service charges. This notice may include details about the amount due, the services covered, and the payment deadline.
If the landlord plans major works that will result in significant service charge increases, they are usually required to consult with tenants before proceeding. This ensures transparency and gives tenants the opportunity to express their views.
The lease agreement typically specifies the terms for the recovery of service charges. It will outline when and how service charges are to be paid, including any deadlines or schedules.
The Limitation Act 1980 imposes a general limitation period of six years for most types of civil claims, including the recovery of service charges. This means that, in most cases, landlords have up to six years from the date the service charges became due to take legal action to recover them.
Landlords are encouraged to request service charges in a timely manner, and delays in doing so may impact their ability to recover the charges. However, the six-year limitation period is the key timeframe for legal action.
If there are disputes or concerns about service charges, seeking legal advice and referring to the terms outlined in the lease agreement is advisable. Understanding the specifics of the lease agreement is crucial for both parties involved in service charge matters.
Yes, in the UK, leaseholders have the right to request and receive a summary of service charges from their landlord or managing agent at any time. This is part of the transparency measures outlined in the Landlord and Tenant Act 1985. The summary of service charges provides important information about the costs incurred and the services covered.
Service charge disputes in the UK can arise from various factors, and they often stem from disagreements between leaseholders and landlords or managing agents.
Common causes of service charge disputes include:
Service charge disputes are often complex and may require legal intervention. Leaseholders have the right to challenge service charges they deem unreasonable, and the First-tier Tribunal (Property Chamber) provides a forum for resolving such disputes in a fair and impartial manner. Seeking professional advice and maintaining clear communication can help prevent and address service charge disputes.
Alternative dispute resolution (ADR) methods are often employed to resolve service charge disputes without resorting to formal legal proceedings. Using ADR methods for service charge disputes can be beneficial, as they often lead to quicker resolutions and can help maintain relationships between landlords and leaseholders.
The common ADR methods include mediation; arbitration; adjudication; expert determination; early neutral evaluation; and negotiation.
Whether you're a leaseholder seeking clarity on your rights or a landlord aiming to uphold fair practices, Lawhive connects you with legal professionals experienced in service charge matters.
With a commitment to accessible and affordable legal support, Lawhive ensures that your concerns are heard, and your rights are protected.
Contact us today for a free case assessment and no obligation quote and get started today.
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