Service charge/maintenance fee?

Hi. Just because your lease was extended does not mean you don’t have to pay service charges. I’ve extended my lease and still have to pay service charges and buildings insurance, plus major works. I’m sure your freeholder is well within his rights to do this and add interest. I think you are taking unnecessary risks and not having buildings insurance could land you in trouble with your mortgage lender as they will want you to have buildings insurance (if you have one). Please correct me if I’m wrong.

If there was a solicitor involved in the lease extension, it would be wise to seek their opinion before you start something where you may not be in the right.

That said most lease extensions do not alter the terms of the lease, they just move the dates. So if you didn’t pay before you may not have a legal obligation to pay now.

However to enforce that on the freeholder may get ugly, so you’ll need to decide if it’s worth the effort.

It might be a smart move to request he details the exact terms in the lease under which he is wishing to charge you etc…..

As for the insurance, that’s going to depend on what type of property it is? If it’s in a block then I don’t believe it could be insured on an ‘all flats except no X’ basis. I’m not certain, but I believe the freeholder cannot withhold the certificate as you have paid for it, (just not his ‘excess’), you might have a chat with the relevant Ombudsman.

It’s my understanding that you have a legal right to receive what you have paid for, if the freeholder believes you owe him extra for something else he should sue you for that. Hopefully some legal person can clarify on this thread.

Reply to the comment left by Tim Rogers at 29/11/2023 – 13:06
My flat is in a block but I still pay buildings insurance to the freeholder and get a certificate to say I have buildings insurance.

Reply to the comment left by Sheridan Vickers at 29/11/2023 – 13:24
If your original lease states you are obliged to pay a ‘service charge’, then you must pay it. If it doesn’t, and this is a new charge, then you aren’t obliged to pay it.

I don’t believe they can suddenly claim the payment is hypothecated for buildings insurance, unless they’ve carved it out of the service charge.

Buildings insurance should be included in your service charge, and I must assume you’ve had buildings insurance (legal requirement) before the lease extension.

Are you saying this £100
Is extra to the service charge you have to pay under terms of your lease? Or is this £100 Ground Rent?
What explanation has Freeholder given?
Landlord & tenant act 85 section 21 allows tenants to request inspection of accounts and Landlord must comply within three months. You can then see what this £100 is spent on and whether allowable under terms of your lease.

Go see a solicitor

The advice on ground rent and maintenance are a bit diferent. So please clarify, as it sounds like you have an annual invoice. But what was this for? You state it was never maintenance (service charge) then we might assume it was for ground rent?

So we assume you have never paid maintenance or service charge before?

Its a lot of assumptions. Can you clarify so we can advise you better?

If maintenance is not in your lease Id be surprised, but you might be right, because who is paying to maintain your communal areas, electrical bill, paint, gardens, insurance, roof, drains, fire risk assessment, asbestos assessment? Ok you might not have all these ha ha, but you understand that maintenance must be paid for, by splitting the bill amongst all leaseholders. Ground Rent is, well, rent and not maintenance.

Depends if you did a Statutory lease extension or a negotiated one.
As far as I am aware Statutory extinguishes ground rent and adds 90 years to the remaining term. The terms of the lease should remain similar to the original but they may try to ‘modernise’ some clauses.

Negotiated means whatever they think they can get away with. The fees are lower but the results can be horrific. Often done so people can sell the flat so they don’t care what kind of stitch up they leave for the new owner. It’s up to you or your solicitor to challenge any unreasonable changes to the lease when negotiating the extension but often people agree to anything to save fees and get it done.

Arnold v Britton Supreme Court judgement that the wording of a lease contract is as exactly as worded and reflects the intention of the original parties to the lease. Clarification of any lease terms is the role of First Tier Tribunal

Soma,

In simple terms and in most cases, as a leaseholder you have to pay Ground Rent (for the lease) and Service Charge (for maintaining the building).

If you have had a lease extension, it is very likely your Ground Rent was reduced or removed. But you still need to pay a Service Charge to maintain the building.

Please look at your paperwork to see what the £100 is for. It sound like it is probably going to be for the Service Charge and therefore, it will be payable, unless your lease says it’s not payable (very very unlikely).

I hope this helps.