Leasehold Maintenance Service Charges Explained
Leasehold Maintenance Service
If you live in a leasehold property, your landlord is legally required to collect service charges from you as part of the terms of the lease. These can include things like insurance, drainage and management costs, as well as your share of the ground rent. The amount of your service charge and the frequency with which you need to pay it will be set out in your lease.
You have a legal right to demand that your landlord or managing agent send you a summary of the relevant service charge accounts. This should include details of all the relevant information relating to the service charge and the steps you can take to challenge it, including your right to apply to the First-tier Tribunal (Property Chamber) in England or the Leasehold Valuation Tribunal in Wales. You can also ask the landlord to provide you with copies of the account and supporting documents, such as receipts. You can download a template for doing this under section 21 of the Landlord and Tenant Act 1985.
A leasehold maintenance service charge should be reasonable and reflect the actual cost that a landlord or manager has incurred in maintaining the building. This is because a landlord has a long-term interest in maintaining the condition and value of their investment. They don’t usually have to keep these costs to a minimum, but they do have to behave in a way which is’reasonable’. This means that the cost of maintaining your building should not be more than is reasonably necessary to maintain it in a good state of repair.
Leasehold Maintenance Service Charges Explained
The law also expects a landlord to behave in a reasonable manner with regard to their costs for maintaining a leasehold property. This means that they should be careful not to overspend on the repairs and maintenance of a property, and to be honest about the costs that they have incurred.
The service charge averages for different types of property vary across the UK, with London and other major cities averaging around PS1,800 to PS2,000 per year. This will depend on the type of property, the level of services provided and whether there are any extra facilities within the block, such as concierge, leisure facilities or landscaped gardens.
The cost of the service charge will be based on an estimate for the services that the property management company can provide, taking into account any anticipated changes in inflation and VAT. This can be a helpful benchmark for the management company to work to.
Putting a cap on your CAM charges is another option which may help protect you from unexpected increases in your lease expenses that can result from the ongoing running of the property. This is a common practice for some new apartments and can be an important factor in securing the lease rate that you’re after.
