We are five leaseholders in a block of flats and we have recently discovered the landlord has been charging more than 100 per cent of the outgoings for repairs and maintaining the building. What can we do about this?
The general rule is a landlord should not recover more or less of the costs and expenses incurred for maintaining the building. It appears from your question there could be two issues here.
Firstly, the total service charges payable by each flat may add up to more than 100 per cent and is the reason why the landlord is recovering more than is being spent.
If this is the case and subject to meeting relevant criteria, the Landlord and Tenant Act 1987 gives parties to a lease, the ability to apply to the First Tier Tribunal Property Chamber to vary a lease on certain grounds including where the total of the proportions payable by each flat is more than 100 per cent.
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You cannot unilaterally amend the terms of the lease. You either require the consent of the landlord and any party to the lease to vary the terms or you may be able to vary the terms of the lease by applying to the Tribunal for an order to vary the terms.
By law, a landlord is required to ensure service charges are reasonable and/or any works or services are of a reasonable standard
There are various ways in which the service charge is apportioned amongst the flats in a building. If your flats are of a similar size, you may expect each flat to contribute 20 per cent towards the repair and maintenance and insurance of the building, for example.
It is not clear if all leases require a variation? Where the application to the Tribunal relates to less than nine leases, all of the parties concerned less one must consent to the application. A concerned party would include the landlord. If it is appropriate, the Tribunal would make the order to vary the leases, and can order any party to pay compensation where anyone is adversely affected by the variation of the leases.
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Secondly, it may be that the service charges proportions set out in the leases are correct and the landlord is possibly incurring expenditure that is unreasonable. The Landlord and Tenant Act 1985 gives a landlord and tenant the right to challenge service charges.
By law, a landlord is required to ensure service charges are reasonable and/or any works or services are of a reasonable standard. It will be for you to demonstrate why the charges are unreasonable.
Bircham Dyson Bell is a multi-disciplinary UK law firm advising private companies, public sector bodies, not-for-profit organisations and individuals since 1834. Visit bdb-law.co.uk to find out more.