Challenging Service Charges
Under s.19 Landlord and Tenant Act 1985, service charges are only payable to the extent that the costs they represent have been reasonably incurred for work of a reasonable standard. The First-tier Tribunal (Property Chamber) can determine what is payable — you do not need to pay a disputed charge while a tribunal application is pending.
Under s.21–22 LTA 1985, you can request a summary of costs and inspect supporting receipts within 6 months of the accounts being issued. Failure to comply is a criminal offence by the landlord.
For major works (over £250 per leaseholder) or long-term qualifying agreements (over £100/year), the landlord must consult under s.20. Failure to consult limits recovery to £250 per leaseholder without tribunal dispensation.
Charges for consenting to alterations, sales, or subletting — and solicitor or management fees — must also be reasonable under Schedule 11 Commonhold and Leasehold Reform Act 2002. These are separately challengeable.
The First-tier Tribunal (Property Chamber) determines disputed service charges, administration charges, and major works reasonableness. Hearings are relatively informal. You can also apply prospectively (before incurring the charge) for a determination of proposed works.
Statutory Lease Extension
Under the Leasehold Reform Housing and Urban Development Act 1993 (as amended), qualifying leaseholders have a right to extend their lease by 90 years on top of the unexpired term, at a zero ground rent ("peppercorn"). The premium is calculated using a statutory formula.
- You must have owned the flat for at least 2 years
- The original lease must have been granted for more than 21 years
- You serve an initial notice on the landlord specifying the premium you are proposing
- The landlord has 2 months to respond with a counter-notice
- If no agreement, either party can apply to the First-tier Tribunal to determine the premium
- Once the premium is agreed (or determined), the new lease must be completed within 2 months
The Leasehold and Freehold Reform Act 2024 significantly improved leaseholders' rights — including longer standard extensions, lower premiums, and the right for house leaseholders to extend indefinitely.
Right to Manage & Collective Enfranchisement
Qualifying leaseholders in a block can take over management of the building without buying the freehold and without needing to prove any fault by the landlord. You need at least 50% of qualifying leaseholders to participate. A RTM company is formed and a claim notice served on the landlord — they cannot object except on specified grounds.
Qualifying leaseholders in a block can collectively purchase the freehold, giving them control over the building and its management. At least 50% of flats must participate. The price is determined by a statutory formula — and the leaseholders can then grant themselves new leases at low or zero ground rent.
Most leasehold house owners have the right to buy their freehold under the Leasehold Reform Act 1967 (as amended). The Leasehold and Freehold Reform Act 2024 has extended and improved these rights significantly.
The Competition and Markets Authority (CMA) and courts have challenged doubling ground rent clauses in historic leases as unfair contract terms under the CRA 2015. A solicitor can advise on whether your ground rent clause may be unenforceable.
Frequently Asked Questions
Do I have to pay a service charge I think is excessive?
You can apply to the First-tier Tribunal (Property Chamber) for a determination of the reasonableness of the charge. You can also withhold the disputed portion pending the application — though there is a risk of forfeiture proceedings if your lease contains a forfeiture clause (though forfeiture for service charges requires court permission and the amounts must exceed certain thresholds). Get legal advice before withholding.
How is the lease extension premium calculated?
The premium is calculated using a statutory formula based on the landlord's loss of ground rent income, the diminution in the value of their reversionary interest, and "marriage value" (the additional value created by the extension) — which applies where the lease has fewer than 80 years remaining. Once the lease falls below 80 years, premiums increase significantly. Get a valuation from a specialist leasehold valuer before making any offer.
Can my landlord object to a Right to Manage claim?
Landlords can only object to an RTM claim on very specific grounds: that the premises or leaseholders do not qualify, or that the claim notice is defective. They cannot object simply because they do not want to lose management control. If they dispute the claim, it is referred to the First-tier Tribunal. The qualifying criteria are: at least two-thirds of the flats in the building must be held by qualifying leaseholders, at least 50% of those leaseholders must participate, and at least 75% of the building must be in residential use.
My lease has under 70 years left. Is it too late to extend?
No — but you should act quickly. The shorter the lease, the more expensive the extension premium (because marriage value applies and grows). Mortgage lenders typically refuse to lend on leases under 70 years (some require 80+). The statutory right to extend is available as long as you qualify — but the cost increases significantly the longer you wait. Contact a leasehold specialist for a valuation as soon as possible.