The landlord has various responsibilities to the leaseholders for provision of services and utilities into the common parts of any estate, development, block or building, whether purely residential, mixed use or commercial.

All leaseholders are responsible for contributing towards these services through their service charge, the proportion of which is detailed in each individual lease.

Services paid for usually include maintenance, repairs and cleaning to the common parts, such as the stairs, lifts, landscaped areas and any mechanical and engineering plant, buildings insurance and in some cases, provision of central heating, porters and lighting. The charges will also include the management fee of the managing agent.

Service charges can vary from year to year; they can go up or down without any limit other than that they are reasonable.

Details of what can (and cannot) be charged by the landlord will be set out in the lease. The landlord arranges provision of the services. The leaseholder pays for them.

All costs must be met by the leaseholders; the landlord will generally make no financial contribution. Most modern leases allow for the landlord to collect service charges in advance, repaying any surplus or collecting any shortfall at the end of the year.

Leaseholders should consider that the service charge bank account is an account set up for running their building and managing agents administer this account on the leaseholder’s behalf. As such, the managing agent is obliged to audit accounts for the leaseholders and have invoices open for inspection. Leaseholders should also consider that any arrears in payment of service charges will effect the level of services provided for all the leaseholders and that bank charges or late payment charges may be applied by the bank or suppliers if there are not enough funds in the account to pay for services and utilities used.

Adapted from the LEASE website.