How to Challenge a Service Charge at the First-tier Tribunal

If you think a service charge is unreasonable, wrong, or not actually payable under your lease, you can apply to the First-tier Tribunal (Property Chamber) for a binding decision. The tribunal can determine whether the charge is payable, who pays it, how much is payable, and when — and its determination is enforceable.

The right to do this comes from Section 27A of the Landlord and Tenant Act 1985. You do not need a solicitor, the tribunal is designed to be used by leaseholders directly, and in most cases the fees are modest. This guide explains when you can challenge, what the tribunal can and cannot decide, what stops you, and how to apply.

This applies to England. It is general guidance, not legal advice — see the disclaimer at the end.

When can you challenge a service charge?

You can ask the tribunal to decide whether a service charge is payable in three broad situations:

• The charge is unreasonable. Section 19 of the Landlord and Tenant Act 1985 limits what landlords (and RTM or RMC companies acting as landlord) can recover: costs are only payable "to the extent that they are reasonably incurred", and only where the works or services are of a reasonable standard. A charge that fails this test is not fully payable.
• The charge is not allowed by the lease. The lease defines what can be charged as a service charge. If the landlord is recovering something the lease does not permit, it is not payable regardless of how reasonable the amount is.
• A procedural requirement was missed. Some charges become irrecoverable if the landlord failed to follow a statutory process — for example, not running a Section 20 consultation before major works (which caps recovery at £250 per leaseholder), or breaching the 18-month rule for demanding costs.

What the tribunal can decide

Under Section 27A, the tribunal can determine:

• Whether a service charge is payable at all
• The person by whom it is payable
• The person to whom it is payable
• The amount that is payable
• The date by which it is payable
• The manner in which it is payable

The reasonableness limit in Section 19 is applied when the tribunal decides the amount payable — so a charge that is excessive can be reduced to the amount the tribunal considers reasonably incurred. The tribunal can rule on charges already demanded and, importantly, on charges that have not yet been incurred — so you can get certainty before major works begin.

What stops you challenging

There is one key limit. Under Section 27A(4), you cannot ask the tribunal to decide a matter that has been agreed or admitted by the leaseholder, or that has already been determined by a court or tribunal, or settled by arbitration.

But "agreement" has a specific meaning here. Section 27A(5) states that a leaseholder is not taken to have agreed or admitted a charge "by reason only of having made any payment". In plain terms: paying the charge — even paying it in full, even paying it for years — does not, on its own, count as agreeing it. You can pay under protest and still challenge later. What does bar a challenge is a genuine, explicit agreement (for instance, signing a settlement that records the amount as agreed).

How to apply, step by step

1. Raise it with the landlord or managing agent first. Many disputes are resolved without the tribunal. Ask in writing for a breakdown of the charge, copies of invoices, and the relevant section of the lease. You have a statutory right to a written summary of costs and to inspect the supporting documents. Keep all correspondence.

2. Check your lease. Confirm what the lease actually allows to be charged, and how the apportionment between flats is calculated. Most disputes turn on the lease wording.

3. Gather your evidence. Service charge demands, the accounts, invoices where you have them, photos of any sub-standard work, quotes showing the market rate for comparison, and your correspondence.

4. Apply to the First-tier Tribunal (Property Chamber). You complete the application form for a service charge determination and pay the application fee. Fees are modest and a hearing fee may also apply; fee remissions are available for those on low incomes or certain benefits. Apply via the First-tier Tribunal (Property Chamber).

5. Prepare for the hearing. The tribunal will set directions — deadlines for exchanging documents and statements. Follow them. The panel usually includes a lawyer and a surveyor, so they understand both the lease and the cost of building works.

6. Get the determination. The tribunal issues a written decision setting out what is and is not payable. If the landlord still does not comply, the decision can be enforced through the county court.

If you are a director on the other side

If you are a volunteer RMC or RTM director and a leaseholder challenges a charge you have demanded, the same rules apply to you. Your best protection is a clean paper trail: a clear annual service charge budget, compliant demands, completed Section 20 consultation where required, and year-end accounts that reconcile to actual spending. A well-documented charge that was reasonably incurred will stand up. For the wider picture of the disputes directors face, see common problems facing residents management companies.

Quick checklist for leaseholders

• Request a written breakdown and the supporting invoices from the landlord first
• Check exactly what your lease permits to be charged
• Remember: paying the charge does not stop you challenging it later
• Confirm no statutory step was missed (Section 20 consultation, 18-month rule)
• Apply to the First-tier Tribunal under Section 27A for a determination
• Bring evidence — invoices, comparison quotes, photos, correspondence
• Apply for a fee remission if you are eligible

LevyBoard is building software for volunteer block directors that keeps a complete, demand-by-demand audit trail — budgets, consultations, and accounts in one place — so a challenged charge can be defended with the paperwork to back it up.

This guide covers challenging residential leasehold service charges in England. It is general information, not legal advice. Tribunal procedure and time limits matter — for a significant or complex dispute, get advice from a solicitor specialising in leasehold law or the free service at the Leasehold Advisory Service (LEASE).

Sources

• Landlord and Tenant Act 1985, Section 27A — liability to pay service charges: jurisdiction
• Landlord and Tenant Act 1985, Section 19 — limitation of service charges: reasonableness
• GOV.UK — Leasehold property: service charges and other expenses
• First-tier Tribunal (Property Chamber)
• LEASE — Service Charges Guidance