Leasehold Service Charges: What Is Reasonable and How to Challenge Them in 2026

What Are Service Charges?

If you own a leasehold flat in England or Wales, you are almost certainly required to pay service charges to your landlord or managing agent. These charges recover the costs of managing, maintaining, and insuring the building in which your flat sits. They can vary enormously — from a few hundred pounds a year in a small purpose-built block to several thousand in a large managed development with concierge services, lifts, or extensive communal grounds.

Service charges typically cover:

• **Building insurance** — the landlord arranges this and recharges the premium
• **Routine maintenance** — cleaning communal areas, gardening, pest control
• **Utilities for communal areas** — lighting, heating in shared spaces
• **Managing agent fees** — the cost of administering the building
• **Reserve fund contributions** — savings set aside for future major works
• **Lift maintenance contracts**
• **Door entry systems and CCTV maintenance**

The Landlord and Tenant Act 1985 (as amended) sets out that service charges must be reasonably incurred and that the services or works must be carried out to a reasonable standard. If either condition is not met, you are not obliged to pay the charge in question.

Transparency Requirements Under the Leasehold and Freehold Reform Act 2024

The Leasehold and Freehold Reform Act 2024 introduced significant new transparency obligations. Landlords and managing agents are required to provide clearer annual statements of account, and leaseholders have enhanced rights to obtain supporting receipts and invoices. This makes it considerably easier to identify inflated or poorly evidenced charges before committing to paying them.

You are entitled to request a summary of costs and, where the service charge exceeds certain thresholds, to inspect the underlying accounts. If your landlord refuses to provide this information within a reasonable period, they lose the right to enforce the charge until they comply.

What Does "Reasonable" Actually Mean?

Whether a charge is reasonable is ultimately a question of fact. Courts and tribunals look at:

• Whether the work or service was genuinely necessary
• Whether the landlord obtained competitive quotes for major works
• Whether a competent managing agent would have authorised the expenditure
• Whether there was a conflict of interest (e.g. the freeholder using a connected contractor)

Reasonableness is assessed objectively. The fact that the landlord paid a particular amount does not make it reasonable if a competent manager would have obtained the work more cheaply.

How to Challenge a Service Charge

**Step 1 — Request the information.** Before filing any formal application, write to your landlord or managing agent requesting a full breakdown with invoices. Many disputes are resolved at this stage once the landlord realises the leaseholder intends to scrutinise the accounts.

**Step 2 — Seek specialist advice.** The Leasehold Advisory Service (LEASE) offers free guidance to leaseholders in England and Wales. A solicitor specialising in leasehold disputes can advise on the strength of your position.

**Step 3 — Apply to the First-tier Tribunal (Property Chamber).** If informal resolution fails, you can apply to the First-tier Tribunal (Property Chamber) in England (or the Leasehold Valuation Tribunal equivalent in Wales) for a determination of whether service charges are payable and, if so, in what amount. The application fee is relatively modest and you do not need a solicitor, though legal representation can be helpful in complex cases.

The Tribunal has broad powers. It can declare charges wholly or partially unreasonable, reduce them to a reasonable level, and in some cases make costs orders. Its decisions are binding on both parties.

Using the Leasehold Cost Calculator

Our [leasehold cost calculator](/leasehold-cost-calculator) lets you model your annual and monthly outgoings as a flat owner, including service charges, ground rent (where applicable), and reserve fund contributions. Understanding the full cost picture before completing a purchase — or when budgeting as an existing owner — can prevent unwelcome surprises and help you identify whether the charges on your property are in line with comparable buildings.