Service Charge Dispute Solicitors

The owner of a leasehold property will almost always be required to pay service charges for the services they receive from their landlord or management company. While this arrangement usually works without issue, service charge disputes can arise when there is a disagreement as to the services provided, the cost of those services, or in relation to how demands have been made. Service charge disputes can lead to non-payment of charges by the leaseholder, administration charges being applied and applications being made to the First Tier Tribunal challenging charges.

At JMW, we resolve complex service charge disputes for leaseholders, landlords and management companies. Our specialist team of property litigation experts provides expert legal advice to all parties in cases of disputed charges and invaluable commercial advice on how to resolve these proportionately and with as little stress as possible. Our highly professional approach often focuses on resolving disputes before they escalate in a fast and cost-effective way to reach an amicable result for all parties.

Whether you are a landlord facing a challenge to service charges which have been demanded or a tenant challenging an unreasonable service charge, we provide clear, results-oriented support. Contact JMW today for advice on how we can help you address a dispute by calling 0345 872 6666, or using our online enquiry form to leave us a message.

How JMW Can Help

At JMW, we provide a comprehensive range of legal services to resolve service charge disputes efficiently. Our property litigation solicitors represent both landlords and tenants, which gives us a unique perspective on how to settle these matters as swiftly and as cost-effectively as possible for all parties.

For leaseholders, our services include:

• Challenging unreasonable service charges in the First-tier Tribunal.
• Reviewing lease terms to determine if service charge costs are recoverable.
• Investigating whether the landlord followed major works consultation requirements.
• Applying for a Section 20C order to prevent the landlord from recovering legal costs through future service charges.
• Advising on variable service charges and the right to request a summary of costs.

For landlords and managing agents, our specialist team assists with:

• Recovering service charge arrears through court proceedings or the First-tier Tribunal.
• Navigating the 18-month rule to ensure actual costs incurred remain recoverable.
• Applying for dispensation from Section 20 consultation requirements for urgent repairs.
• Interpreting lease agreements to ensure the correct calculation of service charges.
• Strategic advice on the Building Safety Act 2022 and its impact on the provision of safety services.

Where possible, we aim to resolve disputes through alternative dispute resolution (ADR) methods, to minimise the costs and time involved in reaching an agreement. However, we are well-prepared to represent you in the First-tier Tribunal (Property Chamber) or the county court where necessary.

Many of JMW's property litigation experts have been ranked in the Legal 500 in recognition of their expertise and the quality of the legal advice they provide. When you contact us, we will take the time to understand the details of your dispute and, once we are aware of what you aim to achieve, tailor our services accordingly. As a full-service law firm, JMW can also provide other solicitors with expertise on contract law or commercial property matters to strengthen your case.

Meet Our Team of Property Dispute Solicitors

JMW's property litigation solicitors have extensive experience in resolving residential service charge disputes and managing complex tribunal proceedings. With a strong track record of success and many years of experience, we can deliver the best possible outcome from any service charge dispute you face.

Why Do Service Charge Disputes Arise?

Service charge disputes arise for various reasons, including the quality of services provided, the cost of those services or a failure to demand the charges correctly. Most leases allow for variable service charges, meaning the amount tenants pay fluctuates based on the actual costs incurred by the landlord. This can create room for disputes to arise where tenants feel that they have been overcharged, or don't understand why charges have increased.

Some of the main areas that commonly fall into dispute include:

• The reasonableness of costs: Under the Landlord and Tenant Act 1985, service charges are only payable if they are "reasonably incurred." If tenants believe that any services or insurance provided are overpriced compared to market rates, a dispute may arise. Leaseholders also have a statutory right to request a summary of the service charges and to inspect supporting receipts and invoices. If a landlord or management company refuses this request, it can be the catalyst for a formal dispute.
• The standard of work: If services or repairs are of a poor standard, even if the cost is reasonable, tenants have grounds to dispute the payment.
• Major works and consultations: When a landlord plans major works costing any one leaseholder more than £250, they must follow a strict consultation process. Failure to do so often leads to legal proceedings.
• Interpretation of the lease: Disputes frequently occur because the specific terms of the lease are unclear. The document may contain ambiguities regarding the differences between 'improvements' and repairs due to drafting errors that will require clarification.
• Failure to demand correctly: Landlords or management companies failing to follow the correct procedure in demanding service charges, such as by demanding out of time, failing to consult or failing to provide the requisite information.
• Historical costs: The law prevents landlords from charging for services if too much time passes between when the costs were incurred and when the demand for payment is sent.

At JMW, our expert property solicitors can review your lease agreement, advise you on the terms of the lease and outline your legal options to resolve a dispute.

When Can Leaseholders Object to Service Charges?

The law provides several statutory mechanisms that leaseholders can use to take action against unfair service charges. Our service charge dispute solicitors utilise these statutory provisions to build a robust case for tenants and prevent excessive charges from being imposed.

Under the Landlord and Tenant Act 1985, a landlord can only recover expenses to the extent that they are "reasonable", and only if payment is demanded within 18 months of the costs being incurred. If a landlord fails to demand payment or issue a notice in time, the leaseholder may not be liable to pay. We will also work with surveyors to determine whether the true costs of services align with the invoices provided, which can enable us to identify when excessive charges are being imposed.

When Must a Landlord Consult with Tenants on Major Works?

If a landlord intends to carry out major works or enter into a long-term agreement for services (for example, a five-year contract for lift maintenance or gardening services), they must consult the tenants. This is known as a Section 20 consultation.

The process involves three distinct stages:

1. Notice of Intention: The landlord must describe the proposed services and allow tenants to provide comments.
2. Paragraph 4 Notice: The landlord must provide at least two estimates for the costs of the repairs or services.
3. Notice of Reasons: If the landlord does not choose the cheapest estimate, they must explain why.

If the landlord fails to follow this process, they are usually limited to recovering just £250 per tenant for major works or £100 per tenant for long-term services. This can be a cause for disputes in some cases, and there may also be exceptions where these requirements do not apply. JMW's specialist team helps landlords to apply for dispensation from these requirements when urgent safety repairs are necessary, and assists tenants to challenge non-compliance.

Is the First-Tier Tribunal the Best Way to Resolve a Dispute?

When service charge disputes arise, the best course of action depends on the specific circumstances. It is important to seek expert legal advice at your earliest opportunity, as the right approach will be determined based on what you want to achieve and the issues in dispute. For example, tenants often make a "payment under protest", which means paying the charge but clearly stating that you are doing so "without prejudice" to the fact that they are disputed. This means that the landlord cannot start forfeiture proceedings to take back the property, but does not affect your right to challenge the service charges later. 

For landlords, maintaining clear records of all actual costs and documenting all maintenance services is key. Transparent communication with tenants can often resolve service charge disputes before they escalate to the First-tier Tribunal, and allow you to show that the charges claimed match those that were incurred. If not, the evidence collected will support your case in legal proceedings.

When Is Alternative Dispute Resolution a Suitable Approach?

In many cases, the best course of action is to try to resolve a concern about service charges through ADR. These approaches are less time-consuming than litigation and often allow the parties to maintain an amicable relationship, which is particularly important between leaseholders and freeholders. Further, they do not involve the same legal expenses as litigation, which in some cases can significantly outweigh the sums in dispute.

There are three key ADR approaches that may be suitable for a service charge dispute:

• Negotiation: This is a way to settle disputes through direct communication between each party's solicitors, allowing for a pragmatic agreement that avoids the stress of court and giving you more control over the outcome.
• Mediation: An independent mediator helps both parties to reach a compromise. This is particularly useful when the relationship between the landlord and tenants needs to be preserved for the future management of the building, and you can still have a solicitor represent and uphold your interests during this process.
• Early Neutral Evaluation: A legal expert provides an opinion on the likely outcome of the dispute, which may encourage both parties to settle based on that professional advice.

Whether you are dealing with estimated charges that seem too high or have concerns about how your service charges are calculated, JMW can provide the support you need to reach a fair resolution. Our experts in alternative dispute resolution can discuss whether these methods will be suitable for your needs and whether the lease agreement mandates any specific course of action.