The Landlord and Tenant Act 1985
sets out the basic rules for service charges. It defines what is considered a service charge, and sets out requirements for making sure costs are reasonable. Landlords should consult leaseholders before entering into any agreement for work or services which would lead to a service charge.
The Landlord and Tenant Act 1985 also applies to payments of service charge under a lease whilst a management order is in place under Part II of the Landlord and Tenant Act 1987.
Section 18 (1) of the act defines a service charge as ‘an amount payable by a tenant of a dwelling as part of or in addition to the rent
- which is payable, directly or indirectly, for services, repairs, maintenance, improvements or insurance or the landlord’s costs of management; and
- the whole or part of which varies or may vary according to the relevant costs.’
The costs of the services, repairs, maintenance, improvements, insurance and management must be reasonable, and the tribunal may decide whether they are.
Please note: the definition in section 18 (1) does not overrule the lease. The item or service must still be included in the lease for your landlord to be able to charge for it.”