Challenging Service Charges at the First-tier Tribunal: Leaseholder's Complete Guide

Your Legal Right to Challenge

Leaseholders have a statutory right to challenge service charges under Section 27A of the Landlord and Tenant Act 1985. The First-tier Tribunal (Property Chamber) can determine whether a service charge is reasonable — regardless of what the lease says.

This right cannot be excluded by the lease. Even if your lease says the landlord's decision about costs is final, Section 27A overrides it.

What Counts as a "Service Charge"?

Under the Landlord and Tenant Act 1985, a service charge is an amount payable by the tenant as part of, or in addition to, rent which varies or may vary according to the relevant costs. This covers:

• Building insurance
• Maintenance and repairs to common parts
• Cleaning, gardening, and caretaking
• Major works (e.g. roof replacement, lift refurbishment)
• Management fees
• Reserve fund contributions

What Makes a Service Charge Unreasonable?

The law requires that costs included in a service charge must have been:

1. Reasonably incurred — there must be a proper reason for the expenditure

2. Of a reasonable standard — services and works must be of a reasonable standard for the money

3. In line with any consultation requirements — for works costing more than £250 per leaseholder, or long-term agreements worth more than £100 per year, the Section 20 consultation process must have been followed

The Section 20 Consultation Requirement

Before a landlord can recover more than £250 per leaseholder for any single set of works, they must follow the Section 20 consultation procedure under the Commonhold and Leasehold Reform Act 2002:

1. Notice of Intention — sent to all leaseholders, inviting observations

2. Notice of Estimates — at least two estimates obtained and shared

3. Notice of Reasons — if the landlord does not choose the cheapest estimate, they must justify it

Failure to follow Section 20 consultation limits the landlord's recovery to £250 per leaseholder, regardless of what was spent. This is one of the most powerful defences available to leaseholders in service charge disputes.

Step 1: Request Information First

Before applying to the tribunal, exercise your rights under Section 21 of the Landlord and Tenant Act 1985 to request a written summary of costs and supporting documents. The landlord must provide this within 1 month of your request (or within 6 months of the accounting period ending, whichever is later).

You also have the right under Section 22 to inspect the underlying receipts and documents.

If Property Passport UK holds your service charge history, review it against the accounts you receive. Discrepancies in figures or undisclosed charges are common starting points for a challenge.

Step 2: Write a Formal Complaint to the Landlord or Managing Agent

State clearly which charges you are disputing and why. This creates a paper trail and may prompt an early resolution. Keep copies of all correspondence.

Step 3: Apply to the First-tier Tribunal

If informal resolution fails, apply to the FTT using Form Leasehold 1 (available at gov.uk). The application fee is £100.

In your application, set out:

• Which charges you are disputing and the amounts
• The legal and factual basis for your challenge
• The outcome you seek (a finding that the charges are not payable, or a reduced figure)

Attach all relevant documents: service charge demands, accounts, correspondence, and any expert evidence you have obtained.

Step 4: The Hearing

The hearing is before one or more tribunal members, who may include a legally qualified member and a surveyor member. You can represent yourself. The tribunal is inquisitorial in style — it will ask questions of both parties.

Be prepared to address:

• Whether the works or services were necessary
• Whether the costs were competitive (comparative quotes help)
• Whether consultation requirements were followed
• Whether the managing agent's fees are proportionate

Step 5: The Decision

The tribunal will issue a written decision, usually within 4–8 weeks of the hearing. It will state what amount (if any) is payable. This determination is legally binding. If the landlord continues to demand the disallowed amount, they are in breach of the tribunal order.

Costs Warning

The FTT generally does not award costs. However, be aware that some leases contain "costs clauses" allowing the landlord to recover their legal costs through the service charge. Section 20C of the Landlord and Tenant Act 1985 allows you to apply for an order preventing this — apply at or before the hearing.

Leaseholder Associations

If you have neighbours who are also disputing the same charges, consider making a joint application. This reduces individual fees and presents a stronger evidential picture. The Leasehold Advisory Service (LEASE) at lease-advice.org offers free guidance to leaseholders considering tribunal applications.