Terms explained: A to F
Administration Costs: They are different to a Service Charge, as these are charges from a landlord or property Manager for costs other than those relating directly to the provision of services used in common or the maintenance of a building. Administration charges are typically for things such as permission to sub-let, provision of information, a landlord’s legal costs or charges associated with a breach of lease. A Leaseholder’s legal rights are different in respect of Administration Charges to those they have in respect of Services Charges. To read about a Leaseholder’s legal rights in respect of Administration Charges see Section 158 (Administration Charges) in our Guide to the Commonhold and Leasehold Reform Act 2002.
Apportionment method: The formula used to divide the landlord’s cost of managing the building between the residents in that building. See Apportionment of Service Charges for more information.
Block Cost: These are the costs that are incurred in respect of maintaining the common parts of a building. The building, as defined in the Lease, is often referred to as the ‘block’ by people working in the property management industry. Block costs are different to Estate Costs which refer to costs incurred to maintain and provide services in respect of areas external to building situated on a Estate. An example of a Block cost would be cleaning of the internal entrance way, an Example of an Estate Cost would be maintaining a car park used by residents of several blocks.
Case Law (or Common Law): This refers to the decisions of Upper Courts and Tribunals which set a binding precedent on lower Courts and Tribunals. These decisions are important because they determine the way the law interprets Acts of Parliament, and how the law should be applied in particular circumstances. For more information see our Overview of Case Law for Leaseholders.
Collective Enfranchisement: Under Section 1 of the Leasehold Reform Housing and Urban Development Act 1993, Leaseholders have the right to purchase part or all the Freehold Title of the building where their property is situated. There is a complex process which Leaseholders must follow to exercise their right to Collective Enfranchisement, and there are strict conditions around the circumstances when Leaseholders are eligible to exercise this right, for example the purchase of the Freehold must be supported the residents of at least half the properties in the building (all of whom must be leaseholders.
Consequential works: works a landlord carries out to the demised premises in order to maintain or repair the reserved premises. Sometimes landlords need to carry out work within a person’s home to maintain the structure of the building.
Demand for payment: Request that payment is made by a leaseholder to a landlord within a specified period of time.
Demised premises: For a leaseholder the demised area is the part of the building over which they hold a lease to use exclusively. Typically this means the inside area of a flat, the internal walls, the floor coverings, the inside surface of the exterior walls and the front door. See What is a Demised Area? in our Q&A section for more information.
Determination: A decision of a legal body such as a Court or Tribunal.
Dispensation of Section 20 Consultation Requirements: The law allows a Landlord to apply to a First Tier Tribunal for ‘dispensation’ of the requirements to consult with Service Charge payers under section 20 of the Landlord and Tenant Act 1985. If dispensation is granted then the normal limits on what can be charged (if the consultation requirements are not met) are removed. For more information see Section 20ZA (Dispensation of the Consultation Requirements).
End of year service charge statement: Statement which shows the actual amount a landlord spent on managing a building during the year gone.
Fixed Service Charge: The amount of the Service Charge is fixed by the terms of the tenancy agreement or the lease. It may go up every year by a specified amount, but it doesn’t change because more or less is being spent by the landlord on providing services.
First Tier Tribunal (FTT): A special kind of informal court set up to decide on disputes between landlords and leaseholders on a range of issues, such as service charge disputes. This used to known as the Leasehold Valuation Tribunal (LVT).
Forfeiture: Under Section 146 of the Law of Property Act 1925, a Landlord is entitled to ‘re-enter’ (take back) a Leasehold property for a breach of lease. Non payment of a Service Charge is a breach of lease, as is an unauthorised alteration to the property. Whilst more recent legislation has given Leaseholders safeguards from forfeiture, such as stipulating that a Landlord must first have a determination from a Court or Tribunal confirming that a breach of the lease has occurred, forfeiture can and does still result in leaseholders having their property taken from them for non-payment of a Service Charge.