Summary Of Your Rights and Obligations
We must enclose a summary, which briefly sets out your rights and obligations in relation to variable service charges, when we send you a bill for service charges.
Unless you receive a summary with the bill, you may withhold the service charge. The summary does not explain the law in full, and if you are in any doubt about your rights and obligations you should seek independent advice.
Duty to pay
Your lease sets out your duty to pay service charges, as well as rent, to your landlord. Service charges are amounts payable for services, repairs, maintenance, improvements, insurance or the landlord’s costs of management, as long as these costs have been reasonably incurred.
First Tier Tribunal
You have the right to ask a First Tier Tribunal (FTT) to decide whether you are liable to pay service charges for services, repairs, maintenance, improvements, insurance or management. You may ask the FTT to do this before or after you have paid the service charge. If the FTT decides that the service charge is payable, it may also decide:
- who should pay the service charge and who it should be paid to
- the amount
- the date it should be paid by
- how it should be paid.
You do not have these rights if:
- you have agreed with us about the matter and it is to do with the service charge or costs, or you have admitted you are liable to pay
- the matter has already been, or is to be, referred to arbitration or has been decided by arbitration, and you agreed to go to arbitration after the disagreement arose
- the matter has been decided by a court.
If your lease allows us to recover as service charges the costs we have incurred or may incur in legal proceedings, then you may ask the court or tribunal that dealt with those proceedings to rule that we may not do so.
If you seek a decision, known as a ‘determination’, from an FTT, you will have to pay an application fee of £100. If the matter goes to a hearing, you will also have to pay a hearing fee of £200 unless you qualify for a free hearing or a reduced fee. The total application and hearing fees payable will currently not exceed £300, but an application may involve extra costs, such as professional fees, which you may also have to pay.
An FTT may award costs against a party involved in proceedings if:
it dismisses a matter because it is frivolous, vexatious or an abuse of process it considers a party has acted frivolously, vexatiously, abusively, disruptively or unreasonably. Please ask us or a citizens’ advice bureau if you are not sure what these terms mean. The Upper Tribunal has similar powers when hearing an appeal against a decision of an FTT.
You have the right to ask an FTT to decide whether we should change your lease on the grounds that the lease fails to set out properly how a service charge is calculated.
Written summary of costs
You have the right to write to us to request a written summary of the costs that make up the service charges. The summary must cover:
- the last 12-month period, ending no later than the date of your request, used for making up the accounts for the service charge (where the accounts
- are made up for 12-month periods)
- the 12-month period ending with the date of your request, where the accounts are not made up for 12-month periods
We must give you the summary within one month of your request or within six months of the end of the period covered by the summary, whichever is the later.
You have the right, within six months of receiving a written summary of costs, to ask us to provide reasonable facilities for you to inspect the accounts, receipts and other documents supporting the summary and to take copies or extracts from them.
Right of re-entry
Your lease may give us a right of re-entry, known as forfeiture, if you have failed to pay charges that are properly due under the lease. This right enables us to take back your home. However, to use this right, we must meet all the legal requirements and get a court order.
A court will only grant an order if you have admitted you are liable to pay the amount or it is finally decided by a court or tribunal or by arbitration that the amount is due. The court has a wide discretion in granting such an order and will take into account all of the circumstances of the case.