Over the past few years, I’ve watched the same pattern play out again and again: leaseholders receiving service charge bills that seem to come out of nowhere, with little explanation and even less recourse. It’s one of the most common frustrations I hear about, and it turns out the numbers back it up. The government’s own 2025 consultation identified that millions of flat owners in England and Wales were receiving large, unexplained bills with very little ability to question them. That’s not a niche problem — that’s a systemic failure affecting a huge number of people. The good news is that the rules have changed, and those changes give you real leverage if you know how to use them.
Under the Landlord and Tenant Act 1985, landlords have always had to ensure service charges are reasonable. But the problem was enforcement — the rules were vague, the paperwork was inconsistent, and challenging a charge often meant a costly tribunal process that most people couldn’t afford. The new rules under LAFRA 2024 change that landscape significantly. They introduce standardised demand formats, strict time limits, and mandatory disclosure requirements that shift the balance of power. If you’re a leaseholder or a tenant paying service charges, you now have clearer rights and more practical ways to enforce them. Here’s what you actually need to know.
If you’re also dealing with interest charges on overdue service charges, the new rules affect those too — the prescribed demand format now requires landlords to spell out payment deadlines and consequences clearly, which means you can’t be hit with surprise interest or late fees that weren’t properly disclosed upfront.
What a Service Charge Actually Covers — and What It Doesn’t
The most important thing to understand is that a service charge isn’t a blank cheque for your landlord. It’s a payment for specific, defined costs related to maintaining and managing shared areas of a building. Those costs typically include building insurance, cleaning of communal areas, lift maintenance, gardening, roof repairs, and the management fees charged by the managing agent. But here’s the catch: you’re only obliged to pay service charges that fall within the scope of the service charge provisions set out in your lease agreement. If a cost isn’t mentioned in your lease, you don’t have to pay it.
What I’d do in your position is start by pulling out your lease and reading the service charge clause carefully. It will list the specific items the landlord can charge for. If you see a charge for something that isn’t listed — say, a new concierge desk or a marketing fee — that’s your first red flag. The law is clear: non-compliance with statutory requirements when issuing a service charge demand can affect the landlord’s ability to recover unpaid service charges or take enforcement action for non-payment. So don’t assume every charge is legitimate just because it appears on a bill.
For a broader look at how service charges work across different property types, you might find our guide on navigating commercial space rentals and service charges useful — the principles overlap, but commercial leases have their own quirks worth knowing.
Why the New Rules Matter for Your Wallet
The practical impact of LAFRA 2024 is that landlords can no longer hide behind vague bills and delayed paperwork. If your landlord issues a demand that does not follow the prescribed format, that demand may be unenforceable. That’s not a technicality — it’s a real protection. Imagine receiving a service charge bill for £3,000 with no breakdown, no budget attached, and no explanation of your rights. Under the old system, you’d have to chase the information yourself and probably pay up in the meantime. Under the new rules, that demand is potentially invalid.
Consider this scenario: your building has 10 flats, and the landlord decides to repaint the entire exterior without consulting leaseholders. Under the old rules, you might have been stuck with the bill even if the work was unnecessary or overpriced. Now, failure to follow proper consultation procedures can mean that the landlord cannot recover as a service charge the full costs of those works. That’s a significant shift. The law requires that costs incurred by the landlord must be reasonable, and leaseholders have the right to challenge charges they believe are excessive.
What I’ve noticed is that most disputes don’t start because the work wasn’t needed — they start because the landlord didn’t communicate properly. The new rules fix that by requiring a budget to accompany the demand at the start of the service charge year. You now have the right to see where your money is going before you pay, not after.
If you’re in a commercial lease, the rules differ slightly but the principle of reasonableness still applies. Our article on the recent court ruling on service charges for UK commercial rentals covers how tribunals are interpreting these obligations in a business context.
Where People Go Wrong — and How to Avoid It
Paying Without Checking the Format
The most common mistake I see is leaseholders paying a service charge demand without checking whether it meets the new prescribed format. Under LAFRA 2024, the demand must clearly set out the names and addresses of both the landlord and the leaseholder, the total amount demanded based on the annual service charge budget, the period the demand covers, payment deadlines and consequences for non-payment, and a summary of the leaseholder’s rights. If any of these elements are missing, the demand may be unenforceable. Yet most people just pay the bill without a second thought. Don’t be one of them. Take five minutes to check the format. If it’s wrong, you have grounds to challenge it.
Ignoring the Annual Accounts Requirement
For residential buildings containing four or more dwellings, the landlord must provide a written statement of accounts within six months of the end of each service charge accounting year. This statement must include an income and expenditure account, a balance sheet, details of the reserve fund balance, and a summary of any major works carried out. For buildings with four or more properties, a qualified accountant must certify these accounts. If your landlord hasn’t provided this, they’re in breach of the law. I’ve seen cases where landlords simply never produced accounts, and leaseholders paid inflated charges for years without realising they had a right to see the numbers.
→ Scroll right to see all columns
| Requirement | What Must Be Included | Deadline |
|---|---|---|
| Service Charge Demand | Names, addresses, total amount, period, payment deadlines, rights summary | At start of service charge year |
| Annual Statement of Accounts | Income/expenditure, balance sheet, reserve fund, major works summary | Within 6 months of year-end |
| Qualified Accountant Certification | Required for buildings with 4+ dwellings | With annual statement |
| Insurance Commission Disclosure | Any commission or payment received | With insurance premium demand |
Not Requesting Supporting Documents
Landlords must provide access to contracts with suppliers and contractors, invoices and receipts for work carried out, insurance policies and any related commission details, fire risk assessments, and historic records going back up to six years. Only genuinely commercially sensitive information can be withheld. Yet many leaseholders never ask for these documents. If you suspect a charge is inflated, request the invoice. If the landlord can’t produce it, or if the invoice doesn’t match the amount charged, you have a clear basis for dispute. The Leasehold Advisory Service offers free initial advice and can help resolve disputes without the need for litigation.
Overlooking the Tribunal Cost Reform
One of the biggest deterrents to challenging service charges was the fear that if you lost, you’d be on the hook for the landlord’s legal costs. Under LAFRA 2024, landlords cannot recover tribunal or court costs through the service charge unless a tribunal specifically orders otherwise. That changes the calculus significantly. If you have a legitimate dispute, the financial risk of pursuing it is now much lower. If you’re unsure about your position, speaking to a tenant landlord lawyer can help you understand whether your case has merit before you commit to a formal challenge.
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How to Protect Yourself and Challenge Unfair Charges
Start With Your Lease and the Demand Format
Your first step is always your lease. Read the service charge clause and note exactly what costs are recoverable. Then compare that to the demand you’ve received. If the demand doesn’t follow the prescribed format under LAFRA 2024, write to your landlord pointing out the deficiency and ask for a compliant demand. Keep a copy of all correspondence. If the landlord refuses to provide a compliant demand, you may have grounds to withhold payment until they do — but get legal advice before withholding, as the rules around non-payment are strict.
Request the Annual Accounts and Supporting Documents
If your building has four or more dwellings, you’re entitled to a certified annual statement of accounts within six months of the year-end. If you haven’t received it, request it in writing. You’re also entitled to inspect supporting documents — invoices, contracts, insurance policies — going back up to six years. Make your request in writing and give the landlord a reasonable timeframe to respond. If they refuse or delay, that refusal itself may be a breach of statutory requirements, which strengthens your position in any subsequent dispute.
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1Review Your LeaseIdentify the specific service charge provisions and compare them to the charges on your demand. Any charge not listed in the lease is not recoverable.
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2Check the Demand FormatVerify the demand includes all prescribed elements: names, addresses, total amount, period, payment deadlines, and rights summary. If not, challenge it.
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3Request Supporting DocumentsAsk for invoices, contracts, insurance details, and fire risk assessments. The landlord must provide these unless commercially sensitive.
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4Seek Free AdviceContact the Leasehold Advisory Service for initial guidance. If the dispute escalates, consider the First-Tier Tribunal (Property Chamber).
Use the 18-Month Rule to Your Advantage
This is one of the most powerful protections in the new rules. If your landlord tries to charge you for costs incurred more than 18 months before the demand was issued, you can refuse to pay — unless they served a prescribed notice within that 18-month window. I’d recommend keeping a log of all service charge demands you receive, along with the dates. If a demand includes old costs, flag it immediately. The burden is on the landlord to prove they served the notice, not on you to prove they didn’t.
Dispute Through the Right Channels
If informal resolution fails, you can apply to the First-Tier Tribunal (Property Chamber). The tribunal can determine whether a service charge is payable and, if so, how much. Under the new rules, landlords cannot recover tribunal costs through the service charge unless the tribunal orders otherwise. That removes a major financial barrier to challenging unfair charges. If you’re unsure about the process, a real estate lawyer can help you prepare your case and navigate the tribunal system.
For those in rural or niche commercial leases, the principles are similar but the lease terms can vary significantly. Our guide on essential advice for rural commercial leases covers how service charge provisions interact with agricultural and countryside property arrangements.
Frequently Asked Questions
Can I withhold service charge if the demand doesn’t meet the new format? ▾
What counts as “commercially sensitive” information the landlord can withhold? ▾
Does the 18-month rule apply to all costs, including major works? ▾
What if my building has fewer than four dwellings — do the new rules still apply? ▾
Can I challenge a service charge after I’ve already paid it? ▾
Sources and Further Reading
How to negotiate rent-free periods in UK commercial leases — A practical guide to structuring lease incentives that can offset service charge costs during the early years of a tenancy.
New Rules for Service Charge Accounting. Cox Hinkins, 2025.
Service Charges and Leaseholders: Your Legal Rights Explained. Mondaq, 2026.
