Leasehold properties, regardless of length of term, will usually make provision for the Landlord, or Freeholder, to charge a service charge for the services the Landlord is obliged to provide under the terms of the lease. This is usually a variable rate depending on the costs the Landlord incurs.

Service charges will usually relate to maintenance and repair but can extend to improvements to the building. The actual repairs are usually carried out by the Management Company run by the Leaseholders or by a Managing Agent acting for the Landlord.

When a leasehold property is purchased, your Conveyancer will explain how service charges work and how the charges could rise depending on the work needed for the building. But do purchasers of Leasehold property appreciate this advice when the time comes for the Landlord to carry out extensive repair or improvement works?

Following the Grenfell Tower disaster there have been recommendations for external cladding on high rise buildings to be examined to establish whether the cladding complies with regulations. Most buildings in the Country have now been checked, and cladding has been removed with a view to being replaced with “safer” material.

But who is paying for this work?

For leasehold owners, if the work comes within the definition of service charges, then the answer is you are likely to be paying for it and it won’t be cheap. If you share the building with council tenants, there will be less “owners” responsible for service charge payments which could further increase the costs. This is usually a problem with owners who have purchased a flat in a right to buy scenario where tenants still rent from the Council.

For most clients, they will have been correctly advised by their Conveyancer, and they will be well aware of their obligations and exposure to these potential cost increases. But for leaseholders who are unaware of these potential charges, this could come as quite a shock, and they may not be budgeting accordingly or even be aware of the implications this could cause for them.

If you have purchased a leasehold property and are facing increased service charges that you feel you were not properly advised on when you were purchasing your property, you may be able to bring a claim in professional negligence against your solicitor if you were not properly advised.

Call our Disputes Team today to discuss your potential claim.