Leaseholders and service charge paying Freeholders on Palace Road Estate will have received their Actual Service Charge Bill from Lambeth for April 2023-March 2024 at the end of last month (September 2024).
All leaseholders on our estate pay for their ground rent, heating and hot water, and their contribution to communal cleaning, lighting, and maintenance works for their block and the estate through a bill called ‘service charge’. Some Freeholders also pay a service charge for communal estate cleaning, lighting, and maintenance works.
Estimated vs Actual Service Charge
The billing year for service charge runs from April one year to March of the following year.
Our leases allow for the service charge to be payable in advance of the landlord incurring the costs, based on an estimate of costs in the coming year; The Estimated Service Charge Bill. This is standard across England and not an unusual practice for Lambeth to do.
Our freeholder, Lambeth Council, sends us an Estimated Service Charge Bill in February of every year for the period starting in April of that year. After the year has finished Lambeth certify the account and then send the Actual Service Charge Bill in the September of that year.
For example:
- Period of bill: April 2023-March 2024
- Estimated Bill: February 2023
- Actual Bill: September 2024
Understanding your Actual Service Charge Bill
The day to day page states the difference between the Estimated and Actual Bill totals. The Estimated Bill may be less than the Actual Bill, in which case you owe Lambeth the difference only. Alternatively the Actual Bill may be less than Estimated Bill, in which case you are owed money. You will not receive that money back, that money will be credited to your Service Charge Account.
Yes, it takes 6 months for the Freeholder/Lambeth to certify the accounts, and then yes, they very nicely demand payment of any money owed within 30 days of receipt of the bill.
Want more information on your Actual Service Charge Bill?
You are legally entitled to ask for more information about Actual Service Charge Bill. Leaseholders also have the right to inspect documents relating to the service charge to provide more detail on the summary. Within six months of receiving the summary, Leaseholders can write to the landlord to ask if they can access and inspect the accounts, receipts, and any other documents that are relevant to the service charge information in the summary and to ask them to provide facilities to copy these.
Please use the below email template and send to:
HMhomeownership@lambeth.gov.uk
Hi,
Property address:
ADD YOUR ADDRESS HERE
We are the leaseholder(s) of the above property, and are requesting a detailed breakdown of the charges set out in the annual service charge actual bill received DATE.09.24 and dated DATE.09.24. Please provide the information at the greatest level of detail possible.
We’re making this request of the landlord in accordance with Section 21 of the Landlord and Tenant Act 1985.
Many thanks,
ADD YOUR NAME
Challenging your Bill – Reasonableness of the work
The Landlord and Tenant Act 1985 (as amended) states that a service charge is only recoverable by a Landlord (Lambeth) so far as the costs have been reasonably incurred. Also, it states that it is only recoverable if works carried out for the charge are of a reasonable standard.
A Leaseholder can challenge the reasonableness of a service charge if it does not comply with above, ultimately, by applying to the appropriate Tribunal. In England, this is the First-tier Tribunal (Property Chamber) and in Wales it is the Leasehold Valuation Tribunal. They have power to make a ruling whether, or how much of, a service charge is reasonable or payable.
Service charges can go up or down without any limit, but the Landlord (Lambeth) can only recover costs which are reasonable.
- was the standard of the work carried out or services provided of a reasonable standard (or will it be)?
- what are the landlord’s procedures for assessing and controlling the costs, including supervising the project?
Find out more
Leasehold Advisory Service website has lots of useful information kept up-to-date. Find out more by clicking here.
Lambeth Homeowners Association is a group of leaseholders and freeholders that pay service charge to Lambeth Council. Their google group allows members the chance to ask questions and hear about others’ experience of negotiating service charges with Lambeth. You can join the group for free.
Service Charge Insights is a website put together by Lambeth leaseholders to increase transparency as to what is being charged on different estates where Lambeth is the freeholder.