Service charges and other issues
A guide to service charges, administration charges, ground rent, recognised tenants associations and forfeiture.
A leaseholder based in London contacted LEASE seeking advice on a Service Charge issue. Her freeholder had been collecting Reserve Funds of £30,000 per annum (across 35 flats) and had built up a substantial reserve. The freeholder was seeking additional funds for major works.
LEASE advised the leaseholder that their lease allowed for the sums for the works to be paid from the Reserve Funds. The Service Charges paid into the Reserve Funds over many years had, in effect, already paid for such works, and to seek further payment from each of the leaseholders would be charging them twice.
The freeholder subsequently refunded all the leaseholders in the block the funds demanded for the major works – a sum totalling approximately £250,000 – following the advice given by LEASE to the leaseholder.