Understanding service charges can be a potential minefield, especially if you are unaware of your rights. Be firm and confront your landlord if you think you are giving cash away for no equal return. Or consult a specialist lawyer.
Extending your lease is a positive step to take. But it can be depressing when you see those service charges in your contract. Is the landlord taking advantage of your payments? No problem. You have to ability to stop it straight away.
Whether you are extending your existing lease or a new one, if service charges seem to mean nothing else to you than a tip to the 'waiter' ie your landlord, then this is your guide for stress free 'tipping'.
Service charges are legitimate payments made by the leaseholder to the landlord. These are to cover the range of services the landlord should provide: maintenance, repairs, building insurance, porter duties, lighting, cleaning of common areas, gardening.
However, arguments between leaseholder and freeholder have been well documented. If you think you are paying for a service that never seems to be done properly, then it's time to take charge.
When you are buying or extending leasehold property, it is crucial to know what the present and future service charges are likely to be. You should discover what plans the freeholder has to develop the building that may higher your service charge in the future.
Have a careful look at your contract. Details of what can and cannot be charged by the landlord, together with the proportion of the charge to be paid by the leaseholder, are set out in the lease. Don't assume that you are obliged to pay for something just because a bill turns up from your landlord.
If you suspect you are being charged unreasonably, be assertive and take action. You have powerful rights to challenge service charges at Leasehold Valuation Tribunals (LVTs). But make sure most of the tenants agree to apply. If you feel apprehensive, there is nothing like the professional touch to be reassured. Go by the advice of a leasehold lawyer.
Has your consultant explored your Right to Manage? Leaseholders can now exercise their Right to Manage (RTM) which involves taking over the general management of the freeholder's building. This means that if you want to get something done, you can go ahead and do it yourself.
But don't think of RTM as easy DIY. Managing a building involves juggling business needs with a lot of complex legislation, therefore having a helping professional hand is key.
The best stress-free arrangement is to have a 99 years or more leasehold? Don't let a landlord fool you and make sure your lease extension comes with the correct service charges. These charges should not be treated as an 'extra' on top of the ground rent.