Legal Q&A: I recently bought a new-build flat, why is the service charge so high?
Question: I bought a brand-new flat quite recently and I have now just received a demand for a service charge from my landlord. Why is the service charge so high, bearing in mind that my flat is in a new-build block? I thought service charges were for repairs and maintenance.
Answer: When you purchased your flat your solicitor should have explained the terms of the lease to you so that you were aware of your obligations and those of your landlord.
Often a seller of a new-build flat will provide the buyer with an estimated service charge budget so the buyer knows what the annual service charge is likely to be.
Your lease should state how your service charge is calculated and when it is due.
Everything you need to know when buying your first home
It should list the services your landlord covenants to provide.
These include general maintenance and repairs to the building in which your flat is situated, lighting, cleaning and insurance of common areas, whether your landlord is entitled to appoint and charge for managing agents to manage the building and so on.
Your service charge may include a payment towards a sinking or reserve fund.
Your landlord will be entitled to levy a service charge in return for providing these services.
A lease will often enable the landlord to demand an estimated service charge in advance of incurring the costs, with a reconciliation at the end of the year.
If the estimate is too low, there will be a shortfall for which you will be liable, or if too high, any overpayment will be credited to your service charge account.
Ask for a breakdown of the fees incurred and check the charges are correct.
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.
If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, Evening Standard, 2 Derry Street, W8 5EE. Questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.
