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How is my service charge calculated?

Your service charge is a share of the costs that the landlord pays to maintain and manage your building, according to the terms of your lease. 

Service charges are usually split between leaseholders in a property. How your share is calculated should be set out in your lease.  

There are many ways this could be done. For example, your share may be in proportion to: 

It could also be just a fixed percentage of the total costs. 

The terms of your lease 

Your lease will not only tell you how the landlord’s costs are divided between leaseholders. It will also tell you what services are covered – that is, what services the landlord can charge you for.  

This is important, because you do not have to pay for services that are not included in your lease. 

Often, the terms of the lease could be general, such as ‘repairing and maintaining the structure of the building’. But some items such as legal costs, management costs, heating, cleaning, garden maintenance and alarm systems should be specified. 

If you are not sure if you should be paying for something, check your lease or get legal advice. 

The lease also tells you: 

Reasonable charges 

The lease usually allows the landlord to get back the costs of maintaining and managing the building. But the law expects these costs to be reasonable, and that the works are done to a reasonable standard. 

If you think any service charges are not reasonable, you have the right to make an application to the Tribunal to challenge them. 

Ultimately, it is up to a Tribunal to decide what is and is not reasonable, depending on the circumstances of each case.


More information you might find useful:

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LEASE is governed by a board, appointed as individuals by the Secretary of State for the Ministry of Housing, Communities & Local Government.