Your 5 Statutory Weapons Against Excessive Service Charges (LTA 1985)
Sections 18 to 30 of the Landlord and Tenant Act 1985 provide leaseholders in England and Wales with five powerful statutory defences against inflated managing agent fees, phantom cleaning bills, and unconsulted roof/external repairs:
| Statutory Section (LTA 1985) | Legal Protection Rule | Threshold / Time Limit | Legal Outcome for the Leaseholder |
|---|---|---|---|
| Section 19(1) | Costs must be 'reasonably incurred' & works of 'reasonable standard' | Applies to every service charge item | First-tier Tribunal cuts excessive bills down to fair market price |
| Section 20 | Mandatory consultation for Major Works or Long-Term Agreements (QLTAs) | >£250 per flat (works) or >£100/yr (contracts) | Unconsulted major works capped strictly at £250 per leaseholder |
| Section 20B | The '18-Month Rule' against surprise historical balancing bills | 18 Months from when landlord incurred the cost | Costs incurred >18 months before demand/notice are 100% unrecoverable |
| Sections 21 & 22 | Statutory right to summary of accounts & inspection of receipts/invoices | Landlord must comply within 1 month of request | Summary criminal offence (up to £2,500 Level 4 fine) if agent refuses |
| Section 27A + s.20C | Application to First-tier Tribunal (Property Chamber) & Cost Shield | Can challenge past (if not agreed) or future bills | Binding determination of payable sum + blocks landlord adding legal costs to bill |
Step 1: Demand the Accounts & Original Invoices (Sections 21 & 22 LTA 1985)
Before paying a disputed balancing charge or filing a tribunal claim, serve a formal written request under Section 21 of the Landlord and Tenant Act 1985 requiring the landlord to provide a written summary of the relevant costs incurred in the last accounting year (certified by a qualified accountant where the building has more than 4 flats).
Once you receive the summary, you have 6 months under Section 22 to serve a second notice requiring the managing agent to provide reasonable facilities for you to inspect and copy the actual underlying contractor invoices, bank statements, and insurance policies free of charge. Under Section 25, failing to comply with a Section 21 or Section 22 notice without reasonable excuse is a criminal offence prosecutable by the local housing authority.
Under Section 27A(4) of the Landlord and Tenant Act 1985, you CANNOT apply to the First-tier Tribunal to challenge a service charge if you have already 'agreed or admitted' it. Note that simply paying a service charge under protest (e.g. writing 'Paid Under Protest – Disputed' in your email to stop mortgage lender action) does NOT count as admitting it under Section 27A(5), allowing you to pay to protect your credit/lease and still sue for a refund at the Tribunal!
Step 2: Applying to the First-tier Tribunal (Section 27A & Section 20C)
If the managing agent refuses to reduce an unreasonable charge, any leaseholder (or group of leaseholders sharing the £110 application fee) can submit Form Leasehold 3 to the First-tier Tribunal (Property Chamber) under Section 27A of the 1985 Act:
• What You Need to Prove: Bring 2 or 3 alternative quotes from independent local contractors for the same cleaning, gardening, insurance, or repair specification, along with dated photographs showing poor workmanship.
• Always Tick 'Section 20C' & 'Paragraph 5A': On the Tribunal application form, always apply for an order under Section 20C of the 1985 Act (which stops the landlord from recharging their tribunal legal fees through the building's communal service charge) AND an order under Paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 (which stops the landlord billing their legal fees to you individually as an administration charge).
Leaseholder Service Charge Audit Checklist
Run this 5-point audit whenever your annual service charge demand arrives: