How to handle a service charge dispute

Service charge disputes can be costly and time-consuming if not handled efficiently.

Landlords have a responsibility to maintain the condition of all their residential and commercial properties. They may be able to recoup some of the costs of doing so by issuing tenants with service charges.

There are however several rules and regulations surrounding what it is and isn’t reasonable to charge tenants for. Landlords must ensure that all service charges are reasonable.

If a tenant feels that the service they’re being charged for or the amount that they’re being charged is not reasonable, then they may dispute the charge with their landlord.

The term ‘reasonable’ is somewhat ambiguous and when disputes occur it is usually the Leasehold Valuation Tribunal (LVT) that decides whether the charge is reasonable.

What happens when a service charge is disputed?

The simplest and fastest way to resolve a service charge dispute is usually by communicating and negotiating with the tenant.

However, if a dispute cannot be resolved in this way, then either the tenant or landlord can apply to the Leasehold Valuation Tribunal to determine whether the charge is payable or not.

Applications are made to the First-Tier Tribunal by completing an application form. A copy of the lease must be sent with the application and a fee may apply.

As well as deciding whether the charge is reasonable, the First-Tier Tribunal can also help to determine the amount that is payable and by what date it should be paid.

Landlords cannot forfeit the tenant’s lease for non-payment of a service charge if it has not been ruled by the court or the Leasehold Valuation Tribunal that the charge is payable, and they are in breach of their lease by not paying.