- Case study
Hannah lives in one of 4 flats in a Victorian property above a small row of shops. She purchased her lease in 2021. At the time, her solicitor warned her that the service charges looked a bit high – but she didn’t worry too much. She needed a home, and she liked the property.
As she lived there, the fees continued to tick up, and the explanation leaseholders were getting from the freeholder seemed increasingly strange. The small property was receiving fire alarm checks once a week, for example. When the leaseholders asked their freeholder for invoices or receipts, they were told they had been “mislaid”.
Suspicious, Hannah phoned the Leasehold Advisory Service for help. “The advisor went through our lease and explained that the freeholder could only charge for works that were included – not just everything they wanted,” she says. “So we were able to challenge them.”
Rather than going straight to tribunal, the leaseholders applied to the Property Ombudsman with a complaint.
It turned out, after investigation, that the freeholder had kept the service charges artificially low for the shops below to tempt businesses into the premises and was then hiking the charges on the flats to make up the difference.
“We were paying more than the percentage that was written in our leases, and this has been going on for some time,” says Hannah.
Since the Property Ombudsman investigated, bills have fallen back down to a reasonable level and excess service charges are being used to set up a reserve fund.
“The call with LEASE made me feel much more informed and aware of where I stand and how I could challenge the freeholder,” says Hannah. “Because it can feel a little bit overwhelming. I mean, not everybody can be an expert in property law and leasehold law because it’s incredibly complicated.”