Author Topic: Service charge increase - am I being robbed?  (Read 1497 times)

Offline HighlyMotivated

A 42sqm flat i rent out has seen service charge more than double this month. It's a huge modern building in a crappy part of West London, where all in all I will be paying over £4000 in service charge for the year - over 100% increase. For a tiny studio flat!

I'm not well versed in these matters. I have simply refused to pay and they can send bailiffs and do what they want. These do not seem like residential rates, and it doesn't seem fair to be charged for excess estimated amounts in the Middle of the year. Do I have a leg to stand on? Anything I can do legally or will I have no choice but to pay up?

Thanks to anyone who has experience in these matters...

Offline lillythesavage

  • Age Check : 18+
  • Banned
  • Posts: 2,666
  • Likes: 36
  •  
  • Reviews: 17
A 42sqm flat i rent out has seen service charge more than double this month. It's a huge modern building in a crappy part of West London, where all in all I will be paying over £4000 in service charge for the year - over 100% increase. For a tiny studio flat!

I'm not well versed in these matters. I have simply refused to pay and they can send bailiffs and do what they want. These do not seem like residential rates, and it doesn't seem fair to be charged for excess estimated amounts in the Middle of the year. Do I have a leg to stand on? Anything I can do legally or will I have no choice but to pay up?

Thanks to anyone who has experience in these matters...

Service charges can vary depending on your contract with the leaseholder, usually if expensive work is required each flat is required to share the bill.

A friend lives in a penthouse, the angled but flat roof was damaged in the storm, took nearly 6 weeks for scaffolding to go up, it has been up since and no work has been done other tan a temp repair.
They really do not care how much they pay, that scaffold will be on rental, because they are not the ones paying.

Read your lease, but I doubt you have a leg to stand on.

Banned reason: Undesirable, previously banned, still attacking members, discussing UKP with SP, toxic personality, it’s a no from me!,
Banned by: Iloveoral

Offline HighlyMotivated

I have requested a breakdown of the costs, but was told over the phone it was due to 'Russia and Ukraine'...

Offline Moby Dick

I won’t buy leasehold property because you are not in control of the service charge costs. It’s a rip off, and once they start increasing it how are you going to sell / attract a new buyer happy to spend over £300 per month on service charges on top of their mortgage. You’d expect a maid service for at least a couple of hours a month for that.

Offline Moby Dick

I have requested a breakdown of the costs, but was told over the phone it was due to 'Russia and Ukraine'...
Does your service charge cover your electric / gas / fuel bills, or are those paid separately?

Offline Adoniron

The lease should specify how the service charge is calculated and how and when it is reviewed (increased).

Offline badsin

  • Age Check : 18+
  • Forum Helper
  • ****
  • Posts: 3,606
  • Likes: 62
  •  
  • Reviews: 59
As above read the terms of the lease. There are set amounts that increases can be made, and at at what periods those increase can be applied.
Another item to be aware of currently is the charges that can be (will be) served on leaseholders in relation to improvements in relation to fire safety works, arising after Grenfell tradegy.
I'd really advise checking your lease, and after that even Seeking further legal advice.
Other than that, generally avoid leasehold property, if you have less than 65/70 years left on the lease, mortgage companies won't want to lend on it, and could make a property difficult to sell.
« Last Edit: August 03, 2022, 09:50:38 pm by badsin »

Offline HighlyMotivated

Does your service charge cover your electric / gas / fuel bills, or are those paid separately?

Those are paid separately

Thanks everyone for your advice and responses

Offline lillythesavage

  • Age Check : 18+
  • Banned
  • Posts: 2,666
  • Likes: 36
  •  
  • Reviews: 17
The lease should specify how the service charge is calculated and how and when it is reviewed (increased).

That is usually not a problem, work from damage, building faults, even fire feeding cladding on blocks below a certain height are payable by the leaseholders over and above the standard service charge.

Selling of leases is another scam, your current deal is ended and you are issued with a new one from the new leaseholder, fuck all you can do about it.
I think it has been stopped, but new build houses were being sold leasehold, you never owned the land your house was built on, the service charges were low as was ground rent , until the lease was quickly sold again and again, absolute rip off that lots of mugs fell for.
Banned reason: Undesirable, previously banned, still attacking members, discussing UKP with SP, toxic personality, it’s a no from me!,
Banned by: Iloveoral

Offline badsin

  • Age Check : 18+
  • Forum Helper
  • ****
  • Posts: 3,606
  • Likes: 62
  •  
  • Reviews: 59
As above, some new build house's are sold as leasehold opposed to freehold, again avoid those. Seemingly a bit of a scam to keep recharging for poorly delivered service's.
Ensure your legal guys do their due diligence :hi:

Offline myothernameis

In my close, we had a service charge, but around 2010, we voted to get rid of the service company, as some of us thought they weren't up to the job

So now we deal with everything our selfs, like getting someone to do the gardening, and we have put away funds of around £150,000

Each household pays around £20 per month

Offline Moby Dick

In my close, we had a service charge, but around 2010, we voted to get rid of the service company, as some of us thought they weren't up to the job

So now we deal with everything our selfs, like getting someone to do the gardening, and we have put away funds of around £150,000

Each household pays around £20 per month
I reckon all the home owners in your close are freeholders.
You basically sacked your gardener/maintenance company.

Online Watts.E.Dunn

  • Age Check : 18+
  • Forum Helper
  • ****
  • Posts: 2,597
  • Likes: 61
  •  
  • Reviews: 46
In my close, we had a service charge, but around 2010, we voted to get rid of the service company, as some of us thought they weren't up to the job

So now we deal with everything our selfs, like getting someone to do the gardening, and we have put away funds of around £150,000

Each household pays around £20 per month

That sounds like a very good idea!..

Offline Squire Haggard

I reckon all the home owners in your close are freeholders.
You basically sacked your gardener/maintenance company.

Most properties in Scotland are freehold. Very few are leasehold.

Offline nwluvit

Most properties in Scotland are freehold. Very few are leasehold.

Even tenement flats?

Offline Blackpool Rock

In my close, we had a service charge, but around 2010, we voted to get rid of the service company, as some of us thought they weren't up to the job

So now we deal with everything our selfs, like getting someone to do the gardening, and we have put away funds of around £150,000

Each household pays around £20 per month
I was going to post that personally i'd avoid a leasehold for all the reasons posted above but I believe if enough people vote to take over the contract you can do your own thing but need to have a proper agreement in place for how to manage the repairs etc.

I knew a guy about 25 years ago who did the same thing in their little block of 4 flats and saved a load of money, can't remember what they were all paying but there was hardly fuck all to show for the money so they asked what was being spent on what.
It turned out they were paying a fortune to get the grass cut but it was the leaseholders brother who owned a gardening company charging 10 times over the odds for an hours work and about a grand to paint a banister which took a few hours but then you find out it's his brother in law etc, fucking rip off  :thumbsdown:

Offline Squire Haggard

Even tenement flats?

AFAIK they would be mostly freehold, same as houses.

''In England, Northern Ireland and Wales, flats are most commonly owned on a leasehold basis, while houses are normally sold as freehold properties. In Scotland, very few properties are sold as leaseholds.''

External Link/Members Only.

Offline king tarzan

  • Age Check : 18+
  • Banned
  • Posts: 15,165
  • Likes: 8
  •  
  • Reviews: 1
A 42sqm flat i rent out has seen service charge more than double this month. It's a huge modern building in a crappy part of West London, where all in all I will be paying over £4000 in service charge for the year - over 100% increase. For a tiny studio flat!

I'm not well versed in these matters. I have simply refused to pay and they can send bailiffs and do what they want. These do not seem like residential rates, and it doesn't seem fair to be charged for excess estimated amounts in the Middle of the year. Do I have a leg to stand on? Anything I can do legally or will I have no choice but to pay up?

Thanks to anyone who has experience in these matters...

Maybe crappy part of London but it's still London
Banned reason: Misogynist who gets free bookings from agencies for pos reviews.
Banned by: daviemac

Offline sir wanksalot

I have requested a breakdown of the costs, but was told over the phone it was due to 'Russia and Ukraine'...

The person who told you that sounds like they are 21 and fresh out of uni.

They need to justify the rise properly and not ambiguously.

I own some small one bed flats and service charges have gone up over 100% over the last 6 years but each year they explain the rise is to offset specific jobs that will be carried out.

The increase will be hurting you AND flat owners too. I believe there is some legal mechanism where if there is enough residents then they can take over the management and set their own charges.

Offline Spunky34

  • Age Check : 18+

  • Ban Countdown
    Loading...
  • Posts: 446
  • Likes: 6
  •  
  • Reviews: 11
I am a leaseholder and this kind of thing is a complete racket.  If you get enough leaseholders on board then it’s possible to invoke the leaseholders’ right to manage but it’s an admin hassle to set it up.   If there’s a residents association that is usually the best forum to start these things - if there isn’t then setting one up may help, but it is time consuming, you need volunteers who can devote some time (and ideally some expertise in administration, basic accounting etc) and inevitably there are costs (low to actually set up a residents association, but potentially high if you need to instruct lawyers, which becomes more likely if the landlord starts not playing ball with the association).   

It’s worth looking at the leasehold advisory service to get a view of how things are supposed to work, but as stated before, the terms of your specific lease will give the exact situation.

Ultimately at my place the leaseholders acquired the freehold (becoming our own landlords) and so were able to dig down into the service charges, ultimately saving ourselves a packet by changing management company (we thought it was too complex to self-manage the property so decided to continue with having a managing agent).   All kinds of under-the counter stuff was going on, for example the old management company was receiving a 20% kickback on the building insurance premium from their preferred insurance broker, which of course was paid for by us leaseholders through service charges. 

As an individual leaseholder your ability to challenge anything to do with service charges is fairly limited, you have a better chance through something like a residents association, where all leaseholders are represented by a single body.  Residents associations have their own problems and often get bogged down in petty shit, but it’s worth thinking about if your service charges are escalating as much as you’ve described - unlikely to get any better if the leaseholders don’t take any action.

Offline lillythesavage

  • Age Check : 18+
  • Banned
  • Posts: 2,666
  • Likes: 36
  •  
  • Reviews: 17
AFAIK they would be mostly freehold, same as houses.

''In England, Northern Ireland and Wales, flats are most commonly owned on a leasehold basis, while houses are normally sold as freehold properties. In Scotland, very few properties are sold as leaseholds.''

External Link/Members Only.


Surely not possible, flat owners can share a freehold, own part of it, but not sure any flat in a block can be freehold  :unknown:
Banned reason: Undesirable, previously banned, still attacking members, discussing UKP with SP, toxic personality, it’s a no from me!,
Banned by: Iloveoral

Offline Spunky34

  • Age Check : 18+

  • Ban Countdown
    Loading...
  • Posts: 446
  • Likes: 6
  •  
  • Reviews: 11
Scotland has a thing called commonhold which seems to be preferred to leasehold for flats.  There’s talk of bringing that into English law.  I don’t know how different it is.

Online Watts.E.Dunn

  • Age Check : 18+
  • Forum Helper
  • ****
  • Posts: 2,597
  • Likes: 61
  •  
  • Reviews: 46
Does the leasehold reform act cover any of this?..

Offline Spunky34

  • Age Check : 18+

  • Ban Countdown
    Loading...
  • Posts: 446
  • Likes: 6
  •  
  • Reviews: 11
Does the leasehold reform act cover any of this?..

The 2022 leasehold reform act was specifically about ground rent rather than service charges, so I think it’s a different issue.  Additionally, it only applies to new leases, so the terms of pre-existing leases are unchanged.

Offline lillythesavage

  • Age Check : 18+
  • Banned
  • Posts: 2,666
  • Likes: 36
  •  
  • Reviews: 17
Scotland has a thing called commonhold which seems to be preferred to leasehold for flats.  There’s talk of bringing that into English law.  I don’t know how different it is.

That makes more sense and is basically what I said, each flat owning part of the freehold and therefore the ground it is built on and shared spaces.
Banned reason: Undesirable, previously banned, still attacking members, discussing UKP with SP, toxic personality, it’s a no from me!,
Banned by: Iloveoral

Offline Squire Haggard


Surely not possible, flat owners can share a freehold, own part of it, but not sure any flat in a block can be freehold  :unknown:

There's more detail about this if you click on the question mark beside ''Tenure:Not available'' below. Its unusual to see this, as most are freehold on this site. I've never heard of Commonhold before reading this thread.

External Link/Members Only