1. What are leasehold service charges?

Service charges are payments made by leaseholders to cover the cost of maintaining and managing the building and communal areas. This can include cleaning, repairs, insurance, and management fees.

2. What types of costs can be included in service charges?

These will vary from property to property but would normally cover services such as communal lighting, caretaking, gardening and the maintenance of equipment such as communal lifts, fire safety equipment as well as repairs to communal areas and the structure of buildings. 

Leasehold service charges would also include the insurance of the building, an annual reserve fund contribution to build up funds to cover future cyclical and major works and a management fee that covers the cost of the organisation in managing any services that leaseholders are deemed to benefit from. 

These interim service charges run from April to March each year, and the estimates are split equally between all properties that benefit from them to produce individual annual service charges for each leaseholder

Buildings Insurance

This covers leaseholder’s contribution towards the premium for Buildings Insurance and is recharged under the terms of their leases which state that, as freeholder, LBBD must insure all properties. The current contract, which commenced in September 2023, is with Protector Insurance and is initially three years in length with the ability to extend this for a further two years. 

Nearer to the end of the initial three-year period our Insurance Department, in conjunction with their broker, will review the current market to see if costs have reduced, and decide whether to extend the existing contract or procure a new one.

FAQs

Due to the high volume of enquiries, we have received via email and at the conference regarding insurance matters, we have complied a comprehensive Frequently Asked Questions (FAQ) document (PDF, 49.06 KB).

Reserve Fund Contribution

This covers leaseholders’ annual contributions to reserve funds that are built up to help meet the costs of future communal major works to their blocks. London Borough of Barking & Dagenham manages leaseholder reserve funds on a property-by-property basis. 

This is because, due to the Right to Buy process, properties are purchased at different times and, in most cases, blocks will be made up of a mixture of rented and leasehold properties. Interest is applied to leaseholders’ reserve funds each year and an annual statement is issued within six months of the end of each period.

Heating

This covers the utility costs of individual leaseholders in blocks where there are communal heating systems, and they don’t pay for their own heating costs directly to a supplier. The annual estimates for this service are set using projections provided by LASER who are the LBBD’s current group utility provider.

Health & Safety Equipment Maintenance

This charge covers the costs of day-to-day repairs and maintenance of Health & Safety Equipment that is in the communal areas of blocks. This would include the maintenance of lightning protection equipment, communal water pumps, dry risers, smoke vents as well as any fire risk assessments that are completed. 

Fire Safety Equipment Maintenance

This charge covers the costs of day-to-day repairs and maintenance of Fire Safety Equipment that is in the communal areas of blocks with leaseholders. This would include the maintenance of any fire alarms, fire extinguishers, sprinkler systems or emergency lighting that may be in the blocks. 

Legionella Testing

This charge covers the cost of any Legionella Testing that is undertaken to the water supplies in blocks with leaseholders in and any works that are required as the result of the testing. 

Communal Repairs

This covers the costs of day-to-day repairs covering the structure and communal areas of blocks and estates and the costs are split equally between all properties that benefit from them. 

Caretaking

This covers the communal cleaning completed by directly employed caretakers to blocks and unadopted external areas and the costs are split equally between all properties that benefit from the service. The costs will include operative’s salaries but also costs of uniforms, equipment used as well as vans used for transport.

Concierge

This covers the costs of concierge services in blocks that benefit from them. At the present time, Highview House is the only block within London Borough of Barking & Dagenham that contains leaseholders and benefits from a concierge service.

Grounds Maintenance

This covers the communal grounds maintenance and gardening completed by directly employed caretakers to unadopted external areas and the costs are split equally between all properties that benefit from the service. The costs will include operative’s salaries but also costs of uniforms, equipment used as well as vans used for transport. 

Safer Neighbourhood

This is charged to all LBBD leaseholders and rented tenants and covers the costs of London Borough of Barking & Dagenham’s Crime and Enforcement Taskforce Team. This team is made up of eight police constables working shift rotas 10am to 10pm. The team’s priorities and taskings are decided on by the intelligence we receive from the public, the local authority, and police intelligence. 

The tasking areas identified for the Crime and Enforcement Taskforce Team are solely Council owned properties in addition to the priority taskings/areas the Crime and Enforcement Taskforce Team endeavour to visit all parts of the borough regularly where there is Council owned properties and assets.

TV Aerial

This currently covers the costs rental and maintenance of communal aerial systems under a contract with Stanley Solutions. The costs are split equally between all properties that are connected to the systems irrespective of whether individual leaseholders choose to use the aerial, and this is not a service that leaseholders are able to opt out of. 

Communal Electricity

This covers the costs of communal electricity supplies located in blocks which include leaseholders. These supplies would cover the costs of communal lighting but also, where applicable, communal lifts, fire and safety equipment, emergency lighting and tv aerials. 

The costs incurred by LBBD are split equally between all properties that benefit from this service. The annual estimates for this service are set using projections provided by LASER who are the LBBD’s current group utility provider.

Water Charges

This charge covers the cost of water supplies in communal areas in blocks that include leaseholders. 

Door Entry

This charge covers the cost of day-to-day repairs and maintenance of Door Entry Systems that are in blocks with leaseholders in. It would include any reactive repairs but also the costs relating to sim cards that are included within the systems themselves. 

Lift Maintenance

This charge covers the cost of day-to-day repairs, insurance and maintenance of communal lifts that are in blocks with leaseholders. It would include any reactive repairs but also the costs relating to regular maintenance visits that would take place irrespective of there being any breakdowns or works required. 

Graffiti/Estate Amenity

This covers leaseholders’ share of costs relating to the removal of graffiti in communal areas.

Management Fee

This covers leaseholder’s share of the actual costs incurred by LBBD in managing the services received including running the leasehold management service. We are hoping to review this is the near future, and so no increase has again been applied for this year, with leaseholders paying the same as they are currently and have done in previous years and so should not result in too many queries. 

Only costs that reasonable and permitted by the lease can be charged. 

3. Can I challenge or withhold service charges if I am unhappy with the service?

Yes. You can:

• raise concerns in writing
• request a summary of how the charge is calculated.
• ask to inspect supporting documents (e.g. receipts, invoices).
• apply to the First-tier Tribunal if you believe the charges are unreasonable

Withholding payment without legal grounds could, however, lead to legal action or forfeiture proceedings.

4. What is the role of the First-tier Tribunal?

The First-tier Tribunal (Property Chamber) resolves disputes between leaseholders and landlords, including:

• whether charges are reasonable
• whether consultation rules were followed
• whether the landlord complied with the 2025 reforms 

5. Do I have to pay into a reserve fund?

Yes, London Borough of Barking & Dagenham leases allow for contributions to a reserve fund to cover major future works (e.g. roof replacement). These are connected to specific properties and so would be non-refundable if you sell your flat. 

6. What if I fall behind on payments?

Landlords can take legal action, including:

• charging interest (if allowed in the lease)
• seeking a County Court Judgment (CCJ) - This could affect your credit ratingand may affect your ability to get loans, including mortgages, credit cards, store cares and increases in credit limits (further costs will be incurred
• in extreme cases, forfeiture of the lease (though this is rare and subject to strict legal safeguards) 

7. Can I get a refund if I overpay service charges?

Yes. If a tribunal or landlord agrees that you’ve overpaid, you may be entitled to a refund or credit against future charges. Keep records and request a breakdown to support your case.

8. What is the difference between service charges and ground rent?

Service charges pay for services and maintenance.

Ground rent is a fee paid to the freeholder for the land your property sits on. Historically most London Borough of Barking & Dagenham leases have allowed for a £10 ground rent charge to be collected. However, since 2022, most new leases are limited to a peppercorn rent (effectively zero).

9. Can landlords increase service charges when they want to?

No. Increases must be:

• justified by actual or anticipated costs
• in line with the lease terms
• reasonable, or they can be challenged at a tribunal 

10.  What happens to service charges when I sell my flat?

You must settle any outstanding charges before completion. Contributions to reserve funds are usually non-refundable, even if you move out shortly after paying.

11. What is a Section 20 consultation?

If planned, works will cost:

• more than £250 per leaseholder, or
• ongoing services exceed £100 per year; the landlord must consult leaseholders under Section 20 rules. Failure to do so may limit how much they can charge