Disputes about Leases
Protecting Leaseholders from Unfair Costs and Mismanagement
Service charges are one of the most common sources of friction between leaseholders and landlords or managing agents. Whether it’s excessive demands, poor transparency, or disputed expenditure, understanding your rights and challenging unfair charges can make a substantial financial difference.
Amid cost-of-living pressures and post-pandemic challenges in building management, these disputes are becoming increasingly common and financially significant.
At the Jonathan Lea Network, our property litigation team delivers practical and strategic advice to leaseholders, Right to Manage (RTM) companies and freeholders alike — helping resolve service charge and accounting disputes efficiently and with minimal disruption.
What Are Service Charges?
Service charges are payments leaseholders make to cover the costs of maintaining, repairing, and managing their building and communal areas. They typically cover cleaning, lighting, landscaping, repairs, and management costs for shared parts of the property.
Under most leases, landlords or managing agents can recover these costs, provided:
- That the lease expressly allows for them
- That the costs are reasonably incurred
- That the works or services are carried out to a reasonable standard
If any of these conditions aren’t met, leaseholders may have valid grounds to challenge the charge under Section 19 of the Landlord and Tenant Act 1985.
Common Service Charge Disputes
Service charge disagreements can arise in many situations. Typical examples include:
- Unreasonable or inflated costs – for example, major works or management fees far above market rates.
- Poor workmanship – where repairs or maintenance have been carried out inadequately.
- Lack of transparency – failure to provide invoices, receipts or breakdowns of expenditure.
- Failure to consult – major works carried out without proper Section 20 consultation.
- Incorrect apportionment – where the landlord miscalculates how costs should be divided between flats.
- Disputed reserve fund contributions – including whether sums have been properly ring-fenced and used.
- Unauthorised items – such as insurance commissions, legal fees or management costs not permitted by the lease.
These cases require both legal interpretation and financial scrutiny — an area where our team’s combined legal and commercial expertise adds real value.
Your Legal Rights as a Leaseholder
Leaseholders have strong statutory protections when it comes to service charge transparency and fairness. Key rights include:
- Right to Summary of Costs (Section 21, Landlord and Tenant Act 1985) Landlords must provide a written summary of expenditure within six months of the accounting year-end.
- Right to Inspect Accounts and Receipts (Section 22, Landlord and Tenant Act 1985) Leaseholders can request access to original invoices and supporting documents.
- Reasonableness Requirement (Section 19, Landlord and Tenant Act 1985) Charges must be reasonable in amount and quality.
- Consultation on Major Works (Section 20, Landlord and Tenant Act 1985) Landlords must consult leaseholders before carrying out works costing over a statutory threshold, or risk losing recovery rights.
- Challenge via the First-tier Tribunal (Property Chamber) Leaseholders can apply for a determination of whether charges are payable or reasonable.
Our solicitors can assess your lease, help you make statutory requests, and represent you before the Tribunal or County Court if a dispute becomes contentious.
Accounting and Management Transparency
Leaseholders are entitled to a clear picture of how their money is being managed. However, some managing agents fall short of these standards.
We regularly help clients with issues such as:
- Missing or inaccurate year-end accounts: failure to prepare or circulate statements within statutory timeframes.
- Unexplained transfers from reserve funds: movement of funds without consent or justification.
- Failure to reconcile arrears or credits: leading to overstated balances.
- Inconsistent apportionments across years: causing inequality between leaseholders.
- Accounts not certified or independently examined: in breach of management obligations.
In serious cases, a landlord’s failure to maintain transparent and compliant accounts — for example, co-mingling funds or withholding statements — can amount to a breach of covenant or breach of fiduciary duty, particularly where trust funds are misapplied.
Our team works with experienced forensic accountants to review management records, identify irregularities, and prepare expert evidence for Tribunal or court proceedings.
Resolving Service Charge Disputes
Early intervention and a measured strategy can often prevent disputes from escalating. We help clients resolve matters through:
1. Early Review & Correspondence: We assess the lease, review statements, and send reasoned legal correspondence to the landlord or managing agent setting out the challenge. This often leads to settlement or correction before formal proceedings.
2. Mediation & Negotiation: Many service charge disputes can be settled via negotiation or structured mediation. Our solicitors ensure that settlement terms are enforceable and that any agreed adjustments are properly documented.
3. Tribunal Proceedings: Where agreement isn’t possible, we represent clients before the First-tier Tribunal (Property Chamber) to determine:
- Whether a service charge is payable;
- Whether the amount is reasonable;
- Whether works were properly consulted on; or
- Whether costs were reasonably incurred.
The Tribunal can also determine administration charges, appoint a manager under Section 24, Landlord and Tenant Act 1987, or order accounting transparency measures.
For Landlords and Managing Agents
We additionally represent freeholders, managing agents, and RTM companies seeking to ensure compliance and recover legitimate service charge arrears.
Our support includes:
- Drafting compliant Section 20 consultation notices
- Reviewing and amending lease provisions for clarity
- Issuing demands in the prescribed format under s.47 and s.48, Landlord and Tenant Act 1987
- Enforcing service charge arrears through the Tribunal or County Court
- Advising on best practice to avoid disputes
Taking proactive legal advice not only ensures compliance but also reduces long-term conflict and cost.
Why Choose The Jonathan Lea Network?
- Proven Tribunal Experience Our team regularly represents clients in the First-tier Tribunal and higher courts.
- Specialist Leasehold Knowledge We handle service charge and management disputes daily, combining legal precision with commercial realism.
- Transparent Pricing We offer clear cost structures and fixed-fee stages wherever possible.
- Collaborative Approach We work closely with managing agents, accountants and surveyors for comprehensive advice.
- National Coverage, Local Insight Based in Haywards Heath, we advise leaseholders and landlords across England and Wales.
How We Can Help
We can assist you with:
- Reviewing service charge demands and leases
- Challenging unreasonable or unlawful charges
- Drafting pre-action letters and settlement proposals
- Representing you at Tribunal or court
- Advising RTM or RMC directors on compliance duties
- Resolving arrears, correcting accounting errors, and pursuing mismanagement claims
Prompt legal advice can prevent escalation, clarify your rights, and protect your financial position.
Contact Jonathan Lea Network today for a free initial consultation.
If you’re facing a dispute over service charges, accounting irregularities, or management transparency, our team can help you understand your position and take decisive action. Please call us on 01444 708 640 or email us at wewillhelp@jonathanlea.net
Frequently Asked Questions
A reasonable service charge is one where the costs were incurred properly, the works or services were necessary, and the quality and price were fair. The Tribunal will consider comparable costs and expert evidence when assessing reasonableness. Generally, leaseholders should pay under protest unless advised otherwise, as non-payment can risk forfeiture. However, if the charge is clearly invalid or unreasonably demanded, we can advise on safe withholding strategies. Applications can be made at any time before or after payment, but practical limits apply if the accounts have aged significantly. Prompt action is best to preserve evidence and credibility. Failure to provide summaries or access under sections 21 and 22 of the Landlord and Tenant Act 1985 may prevent the landlord from enforcing payment and can form part of a Tribunal application. This depends on your lease. Some leases allow recovery through the service charge, others do not. The Tribunal has limited powers to award costs, except where one party acts unreasonably. We can review your lease to confirm whether you can apply for a costs order or recover legal expenses from the landlord.
Learn More: How Lease Extensions Work and Why They Matter
For a clearer understanding of leaseholder rights and the practical steps involved, watch our video featuring Kent Reynolds, Senior Solicitor at Jonathan Lea Network.
Kent explains the lease extension process, common pitfalls, and how expert advice can protect your property’s long-term value. These same principles underpin our wider leasehold services, including enfranchisement, RTM, and deeds of variation.
Photo by Rich @ rhubbardstockfootage on Unsplash
Our Enfranchisement & Lease Extensions Team
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