Chafes Solicitors, one of our recognised suppliers, offers some top tips for leasholders…
If you let flats, you’ll be familiar with service charges; as a leaseholder you are required to pay the freeholder a fee to cover costs including maintenance, repairs, insurance, management and other services.
Such costs can add up but luckily legislation protects the leaseholder from excessive service charges. With this in mind, here are some facts that all leaseholders should know:
- If work to the apartment block or surrounding land is needed and it is to cost more than £100 for Qualifying Long-Term Agreement (QLTA) leaseholders, or £250 for non-QLTA leaseholders, in any one year, the freeholder is required to consult with the leaseholders before going ahead.
- When consulting with leaseholders, the freeholder must:
– Give notice to all leaseholders and tenants’ associations, detailing why the work is necessary
– Invite responses to the notice and keep a copy of the responses
– Obtain a series of estimates for the work (leaseholders and tenants’ associations are able to nominate alternative contractors)
– Issue a statement detailing the estimated costs from at least two of the contractors and provide detail of where the estimates can be inspected
– Invite responses to the estimates within 30 days and keep a copy of the responses
– Issue a summary of any responses received and respond to them
– Justify why the successful contractor has been chosen
- If the freeholder doesn’t consult with the leaseholders, the leaseholders’ responsibility for cost is limited. In fact, the maximum that the freeholder can recover will be £100 per leaseholder under a QLTA and £250 for leaseholders not under a QLTA.
- When the freeholder issues a service charge demand, they must do so within 18 months of the work being carried out. If the demand is issued after this period, the leaseholder isn’t required to pay.
- If the leaseholder is unhappy with the service provided by the freeholder, they can challenge the service charge costs via a Leasehold Valuation Tribunal (LVT). Challenges can be made on grounds including:
– Whether the service charge costs were reasonably incurred
– Whether the services or works are of a good standard
– Whether the estimated service charge, payable before costs are incurred, is reasonable
- When challenging whether service charge costs have been reasonably incurred, factors including the financial impact on leaseholders and whether the work should be phased to spread the cost can be considered. However, the leaseholder cannot insist that service charges are phased to spread the cost of major works.
- Leaseholders aren’t able to avoid service charges on the grounds of hardship. So if particular repair is required urgently and is carried out at a reasonable cost and to a good standard, the leaseholder must pay in accordance with the terms of the lease.
If you’re a leasholder and would like advice or guidance on any of the tips covered, visit our Chafes recognised suppliers page.