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Service Charge Disputes – What to do when a freeholder plans to increase service charge to cover repairs to the building

First  things first you have to look at your lease. The lease is a legal contract and you can only be charged for services if they are specified in the lease. You ( or your conveyancing lawyers ) should check your lease carefully to examine the extent of the service charges to be paid for and how much you can be charged. Most service charge disputes can be resolved fairly easily once the lease is looked at.

The statutes relating to leasehold provide leaseholders with legal rights where a lease provides that you have to pay for services, repairs, maintenance, insurance or management costs in addition to ground rent. These legal rights include the right to be given a summary of the service charges on which any service charge is based, the right to look at the accounts and receipts for the service charge, the right to be consulted about major, non-urgent works and the right to challenge unreasonable charges.

If you are asked to pay for something which is not covered by your lease, or you think that a charge is too much, you should start by writing to the freeholder explaining why you think the service charge is wrong. If you are not satisfied with the response you can challenge the amount by applying to a leasehold valuation tribunal, although it is probably best to a lawyer first. At the very least you should speak to a conveyancing lawyer to check that your understanding is correct. You can make a challenge either when the work is proposed or when you receive a bill, but not if you have already agreed to make the payment.

You should speak to the other leasehold owners in your block to see if they wish to form a tenants’ or residents’ association and negotiate jointly with the freeholder through that association.

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