Flat owner calls for more transparency in service charge statements

Service fees are a proven way for investors to make money, and it’s a largely unregulated industry.

But any charge must clearly be reasonable, and if you suspect it isn’t — and you’ve done your research — there are ways to effectively challenge any increases, explains Stephen Gold, a retired judge and author of “The Return or Breaking Law’.

He suggests that a letter to the landlord or managing agent should be your starter, and has provided the following template:

We refer to your service charge request for this [x year]. It is our case that the items listed in the appendix to this letter should not be paid by us for the reasons set out in the same appendix.

We have calculated that our liability should be limited to the amount of £x rather than £y as claimed. We invite you to revise the claim to £x and communicate your decision within 28 days of the date of this letter.

If you are not prepared to accept £x, our intention is to apply to the First-Tier Property Chamber (Residetial Property) (or, in Wales, the Leasehold Valuation Tribunal) to have the claim under the Landlord and Tenant Act 1985.

If you file a claim with the district court before the application is filed, we will request that the court transfer the proceedings to the court, which we believe is to be expected.

We will apply to the tribunal and/or district court under section 20C of the 1985 Act for an order prohibiting the addition of the landlord’s costs and expenses for handling the dispute to future service charges.

Disgruntled tenants have three main options for dealing with poor property management.

1. One solution is to buy the property, but the owners of the flat cannot do this for various reasons, such as not having the required minimum number of tenants in the block to buy it.

2. A step back from buying the property is to do a Right To Manage application, where you register with the First Tier Tribunal (Property Chamber) to handle property management disputes.

The tribunal is part of the judicial system and is a tenant-friendly route for those who cannot afford lawyers. It means that you acquire the right to manage the block and you have to set up your own company to oversee it.

In reality, you hire another property management company to do the job, giving you more control over how the block is managed. You will need to seek advice and speak to a lawyer.

3. Perhaps the easiest way to deal with bad property managers is to ask the court if the service charges are reasonable. You do not need a lawyer for this. If you file an application through the court, it must conduct an investigation.

It can lead to a significant reduction in your monthly property management costs and even get you money back. You can get free advice at www.lease-advice.org.