I purchased a leasehold flat in south London in March 2024. The service charge for the first year was approximately £1,800 which seemed reasonable for a block of 14 flats with a resident caretaker and communal gardens. I have now received the demand for the year 2025 to 2026 and it is £4,200, an increase of over 130%. The demand letter gives a single lump sum figure with no breakdown of costs whatsoever. I emailed the managing agent three weeks ago asking for a breakdown and have had no reply. I followed up by recorded delivery letter two weeks ago and still nothing.
I have looked at the lease and it says the landlord “shall use reasonable endeavours to provide an annual estimate” of service charges but does not appear to mandate a detailed breakdown. The lease also contains a sweeper clause allowing the landlord to recover costs for “such other services as the landlord may from time to time provide for the benefit of the development”, which feels extremely broad. I have read that under section 21 of the Landlord and Tenant Act 1985 I should be entitled to a summary of costs, and under section 22 I can request to inspect the accounts and receipts.
My other concern is whether the solicitor who acted for me on the purchase should have flagged any of this. The lease was provided to them and they gave me a “report on title” which did not mention the sweeper clause or flag any unusual service charge provisions. Does anyone have experience of challenging a service charge demand where no breakdown has been provided? Does anyone also know whether there is any realistic prospect of a complaint against the conveyancer, or is this the sort of thing they would say falls outside the scope of a standard report?
You’re on the right track with s.21 and s.22.. those are your statutory rights and the managing agent cannot lawfully refuse. Send the s.22 request in writing, keep copies, give them 21 days. If they still ignore you then you’ve got grounds to withhold the disputed amount pending compliance.
On the conveyancer angle.. forget it. A sweeper clause is standard boilerplate in about 80% of London leases. No solicitor is flagging that in a report on title because it’s considered normal. You might get a sympathetic ear from the Legal Ombudsman but realistically you’ll get square root of naff all.
If it comes to it, section 27A application to the First-tier Tribunal is the real lever. Costs are low (about £100-£300 to apply) and managing agents hate it because they actually have to produce the paperwork. I’ve been through this twice on my properties.. both times the agent suddenly found the detailed accounts once the tribunal application landed on their desk.
The lease will have a clause setting out the landlords right to recover service charges and how they are calculated. Your conveyancer would have summarised the lease and sent you a report on title. If it said service charges are variable and recoverable from leaseholders then thats what they flagged. Theres a difference between a conveyancer not flagging something and a buyer not reading what was flagged.
@rb471956 I take your point generally, but in this case the report on title specifically stated that service charges for the previous three years had been in the range of £1,600 to £1,900 and that there was “no indication of planned major works or significant increases”. That is a direct quote from the report. The lease does allow variable charges, yes, but the demand I have received is for £4,200 for this year with no breakdown whatsoever, just a single figure on a letter headed “service charge demand 2025-2026”. There was no consultation under section 20 of the Landlord and Tenant Act 1985, which as I understand it would be required if any single item of works exceeds £250 per leaseholder. I have asked the managing agent three times for an itemised breakdown and have received nothing beyond an acknowledgement email.
I am not suggesting my conveyancer should have predicted the future, but I do think there is a question about whether they should have obtained the most recent service charge accounts and any reserve fund statements before completion, which they apparently did not do. The accounts that were included in the pack were from 2022-2023, not the most recent year available at the time.
My question remains whether anyone has successfully challenged a demand like this at a First-tier Tribunal and what that process actually looks like in practice. I have seen references to applying under section 27A but the guidance I have found so far is quite general.
@DC47 you’re right to focus on the s.20 point.. if works exceeding £250 per leaseholder were carried out without proper consultation, the landlord’s recovery is capped at £250 regardless of what they actually spent. That’s your strongest lever here.
I had a leaseholder in one of my blocks challenge a charge a few years back (they were right to, the managing agent had gold-plated a roof repair without telling anyone). The FTT process is fairly straightforward. You apply under s.27A for a determination of what is reasonable. Court fee was about £300 at the time, might be slightly more now. You don’t need a solicitor, plenty of leaseholders represent themselves. The tribunal will want to see the demand, the lease, any correspondence, and your evidence of what’s reasonable.
One thing though.. get that itemised breakdown in writing via a formal s.22 request. If they still don’t respond within 21 days, that itself is a criminal offence under the 1985 Act. That tends to focus minds rather quickly!!
Quick update on this. I sent a formal section 22 request by recorded delivery on Monday asking for a summary of costs for the current service charge year and the previous year, and also a section 21 request to inspect the accounts and receipts. I gave them 21 days as required. I also emailed the managing agent directly to let them know the letters were on the way. The email bounced back with an out of office saying the person I had been dealing with has left the company, which does not fill me with confidence.
The demand I received in February listed a single line item of £4,200 described as “major works contribution” with no further detail. When I queried this by email in early March I was told it related to roof repairs carried out in late 2024. I have no recollection of receiving any section 20 consultation notice, though I accept it is possible something was sent before I purchased the flat. My conveyancer’s report on title made no reference to any planned or ongoing major works.
@theartfulfreeholder given your earlier point about the section 20 cap, if consultation was not carried out properly would the appropriate route be to apply to the First-tier Tribunal now, or should I wait until the 21 day period for my section 22 request has passed? I am conscious of time limits and do not want to miss any window. Does anyone know whether there is a cost to making a tribunal application as a leaseholder?
@DC47 don’t wait.. you can apply to the FTT now and it won’t prejudice your s.22 request, they’re separate processes. The tribunal application fee is modest, from memory it was £100 or £200 when I last did one (about 2019), though check the current schedule on the tribunal website.
The person leaving the managing agent is a red flag I’ve seen before.. twice in fact. In one case the entire management function was quietly transferred to a sister company and nobody told the leaseholders. Worth checking Companies House for any recent filings against the management company and also whether the freeholder has changed.
On the s.20 point, if you genuinely received no consultation notice then the landlord’s recovery is capped at £250 per leaseholder for those works regardless of what they actually cost. That’s your strongest card here. Keep everything in writing and keep copies. Cheers!