Challenging Service Charges

If you are a leaseholder of a residential flat and your service charge seems to be constantly increasing for no apparent reason there is a mechanism by which you can challenge it. You can make an application to the Leasehold Valuation Tribunal for a determination as to whether the service charge is reasonable (this may still be possible even if you have paid the service charge).

 What is the Leasehold Valuation Tribunal (“LVT”)?

• It is part of the Residential Property Tribunal Service and is intended to be a relatively informal way to resolve residential leasehold disputes
• Proceedings are semi informal
• The LVT usually consists of a three person panel – a lawyer, a valuer and a lay person

An application cannot be made to the LVT in the following circumstances:-

• Where the issue has been admitted by the leaseholder
• Where it has been determined by a Court
• Where it has been referred to arbitration

 What is reasonable?

 There is no simple definition of what is reasonable, but consideration needs to be given to questions such as:-

• Are (or were) the works or services necessary?
• What were the Landlord’s procedures for costing the works and services?
• Was (or is) the standard of the works or services appropriate?

 The Procedure 

• Application made to LVT on designated form
• Upon receipt LVT send a copy to the Landlord
• The LVT may issue directions to the parties (such as in respect of exchange of evidence)
• The LVT will notify other parties likely to be significantly affected (such as other leaseholders in the building) and give them the opportunity to join in the application
• The LVT may hold a pre-trial review
• The LVT do not always hold a hearing and can decide the application upon the basis of written submissions
• If there is a hearing it will be along general court lines with the presentation of experts and witnesses

The costs in a LVT can be significant, therefore the more leaseholders who join in the application to the LVT, the lower each individual’s costs will be, a collective approach can be more effective than individual approaches.  It is important that the leaseholders have available and provide all relevant service charge documentation as well as details of and reasons for the items in dispute.

If you require any further information please contact a member of our Property Team.