Reader’s Email: I am a tenant who is still with same housing ass, after 39 years.Why has my landlord started charging service charge. One my contract says no service charges, two i live in a street of 200 houses only three are social housing.
Reply from Service Charge Dispute
It is very common for Housing Associations to attempt to charge Tenants, as opposed to Leaseholders or Shared Owners, a Service Charge. Whether the Housing Association is entitled to do so depends on three things:
1. What it says in your Tenancy Agreement
The wording of your Tenancy Agreement may not allow your Housing Association to make this charge. As a starting point you should ask them which clause in your Tenancy Agreement they are relying upon as basis for raising a Service Charge.
If your Tenancy Agreement does allow a Service Charge to be raised, your next question is whether the charge should be fixed (ie. a set amount which increases each year) or a variable Service Charge. A variable Service Charge is one which is calculated a share of the amount of the Landlord’s actual expenditure on the service provided.
If it is a variable Service Charge, does the Tenancy Agreement state what your share is, or indeed what types of things you must pay for?
These are all questions which your Housing Association needs to answer. If your Tenancy Agreement states an answer to these questions then is your Housing Association charging you in the right way for the right things?
It may be that your Tenancy Agreement states that the Landlord is allowed to change what they charge you for. If this is the case, your Tenancy Agreement may state that your Landlord needs to follow a process, such as consulting you by letter, before making such changes. Again this is something you should check and inform your Landlord of in writing if you feel that they have not, in some way, followed what it says in your Tenancy Agreement.
2. Is the Service Charge reasonable?
Section 19 of the Landlord and Tenant Act 1985 states that a variable Service Charge is only payable to the extent that it is ‘reasonably incurred’. A Service Charge cannot be reasonably incurred if it is for services or works which haven’t been carried out, or are unnecessary.
If you live in a street of several hundred houses, of which your Landlord owns only a handful, it is unlikely that they are responsible for maintaining an ‘Estate’, which would involve looking after such things as roads, footpaths, playground areas etc. Sometimes Tenants and Leaseholders in terraced houses on Council maintained streets pay a Service Charge for things which are shared with other houses such as a shared roof, guttering or downpipes. If there is a shared entrance or shared garden then a Landlord may also need to maintain those and raise a Service Charge for it.
In deciding whether the proposed Service Charge is reasonable you should ask your Housing Association what exactly it is they are planning to charge you for. There has be to some kind of common area or service, which is shared between several properties, in order for it to be reasonable for a Housing Association to raise a Service Charge in the first place.
3. Does the Law allow the Charge?
Section 11 of the Landlord and Tenant Act 1985 specifically says that for tenancy agreements of periods of under 7 years (this applies to periodic tenancies which automatically carry on at the end of shorter period, such as 1 year, even if the tenant is in occupation for more than 7 years) states that a Landlord cannot make an additional charge to a Tenant for the following things (which means a Landlord cannot include them in a Service Charge):
A. The repair and maintenance of the structure and exterior of the building.
B. Repair and maintenance of water, gas, electricity and sanitation systems or installations.
C. Repair and maintenance of installation and systems for heating and hot water.