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Service Charge Disputes Increasing as Recession Bites

According to a statement by the Leasehold Advisory Service  “A lot of people do not realise that there is no cap on how much service charges can rise. The rule is that charges have to be reasonable. ”

Several leasehold owners resident in apartment blocks pay service charges. These charges cover the cost of maintaining common parts of the building, as well as buildings insurance and services such as heating, lighting, lifts, cleaning and gardening.

A management fee is often included within the service charges to cover the work of the managing agency that maintains the building. Some apartment residents also cover the cost of a pool concierge or a gym.

The Leasehold Advisory Service, which is government-funded and offers free advice on property leasehold law, has seen a 21% rise in enquiries from leaseholders during the past 12 months. Here at Fridays, the leasehold conveyancing team have also received an increased number of calls regarding service charge disputes. We have responded with our service charge health check service.

The Leasehold Valuation Tribunal Service, which decides many rent and leasehold disputes, comments that it has also seen an increased number of complaints over the past five years, including those between flat-owners and management agencies.

Many leasehold owners are unaware that they can take control of fees under a process known as the ‘Right to Manage’. This process gives Leaseholders the right to replace their management agent. Owners can then take on the responsibility of managing their building themselves or appoint another management agency to look after the building on their behalf.

However, it is worth considering that this’ Right to Manage’ process usually takes around four to five months.

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