By Press Release
Service charges can be one of the most significant expenses associated with owning a leasehold property. The charge covers the cost of services, maintenance, and repairs provided in a shared building or development, so it’s typically levied on properties with multiple units sharing common areas and amenities, like blocks of flats.
The specific services and costs covered by the service charge should be detailed in the lease agreement. It’s important to carefully review the terms and conditions associated with the service charge and the current practical arrangements that are in place. Many leasehold property owners report problems with their service charges.
Common problems include:
1. Overcharging and lack of transparency – Recently, a group of neighbours in Greenwich managed to reclaim £318,000 from their landlord as repayment for historic overcharging.
2. Unexpected costs – Charges for services that are excessive, and that have not been notified to the leaseholder by following the correct procedure. For example, in a property with unequal service charge contributions, the landlord must consult all leaseholders if any one of them would have to pay more than £250 for proposed works. If the correct consultation process is not followed, the landlord may not be able to recover costs over £250 per leaseholder.
3. Inadequate management – Poor property management can contribute to many problems so it may be important to understand what level of service is acceptable.
4. Inconsistent billing and lack of communication – which often leads to uncertainty amongst leaseholders as well as service charge payments not being made on time or, worse, falling into arrears.
5. No sinking fund – A sinking fund is a financial pool created to cover future significant works and maintenance. No sinking fund is a common issue.
At Biscoes we have experts specialising in leasehold law who are used to addressing the challenges posed by the above issues during the course of a sale or purchase transaction.
If you would like to speak to a member of our Residential Property team please contact us on 01983 533938.