Residential service charges: overview

by Practical Law Property

A note summarising the statutory framework governing residential service charges for dwellings in England and Wales. This note examines the key legislative protections for tenants, primarily under the Landlord and Tenant Act 1985 (LTA 1985) and the Landlord and Tenant Act 1987 (LTA 1987). It outlines the definition of a service charge, the crucial requirement for costs to be reasonably incurred, and the statutory rules on the reasonableness of administration charges. The guidance also details landlord obligations concerning service charge demands, including time limits for recovery under section 20B of the LTA 1985, and the statutory trust for service charge monies. It explores tenants' rights to obtain information, challenge charges at the First-tier Tribunal (FTT) or Leasehold Valuation Tribunal (LVT) in Wales, and limit a landlord's recovery of litigation costs. This note also touches upon other remedies and the significant changes introduced by the Leasehold and Freehold Reform Act 2024 (LFRA 2024). This note does not include commentary on the consultation requirements under section 20 of the LTA 1985. For a full discussion of those requirements, see Practice note, Residential service charges: consultation requirements under the LTA 1985.