What is a service charge?
A service charge is a bill that covers the costs of any repairs or maintenance to the structure of your building, including drainage, insurance and management charges. You usually pay a service charge monthly or quarterly depending on the agreement with your freeholder.
If you own the property, details about your service charge should be included in your lease. If you rent your property it’s likely that the service charge will be included in your rent but you can check this in your tenancy.
The amount you pay for service charges can vary from year to year, depending on the actual cost of the services to your landlord. You should always treat your service charge as a priority debt, as not paying it can have serious consequences.
Disputes with service charges can arise as the freeholder should only charge you a reasonable management fee and not make a profit. Because these charges can change each year, it can become difficult to budget for any changes to your service charge.
If you’re not sure if you should be paying a service charge, you should check your lease or contact your landlord or management company.
If you have a dispute with the amount you’re paying you should contact the Leasehold Advisory Service for more information.
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