Question 1

Service Charges

Accepted Answer

Q: We are four flats and each pay a percentage into a limited account each month which are the following: Flat 1, 27.25 per cent; Flat 2, 20.25; Flat 3, 23.25; Flat 4, 29.25 I understand that the flats are all different in square feet, but we need to have the hallway decorated and need extra money to pay for this work as there is not enough in the account due to extra building work. Do we still have to pay as above or can we pay 25 per cent each as the hallway is used by all? FPRA Legal Advisor Nick Roberts replies: I shall try to answer your question in general terms: if the leases specify proportions, then that is the proportion in which you must split all service charge expenditure. You do not have the power to charge equal proportions simply because it may seem fairer. The only basis upon which you could split the expenditure equally would be if the owners of the two flats who were supposed to pay less than 25 per cent voluntarily agreed that that would be the proportion that they would pay. That agreement would be for this occasion only: if the intention was to vary the proportions for all time in future, then it would be preferable to have formal deeds of variation drawn up. This would involve a fair amount of legal costs, and you would have to pay the fees to have the deeds registered at the Land Registry. If the proportions payable by three of the flats are fixed, and the proportion payable by the fourth is to be set by the landlord on the basis of what is ‘rateable’ then in practice you have little choice but to set the proportion payable by the fourth so that it covers whatever the outstanding balance is. [Submitted April 2017]

Question 2

Service Charges

Accepted Answer

Q: We are four flats and each pay a percentage into a limited account each month which are the following: Flat 1, 27.25 per cent; Flat 2, 20.25; Flat 3, 23.25; Flat 4, 29.25 I understand that the flats are all different in square feet, but we need to have the hallway decorated and need extra money to pay for this work as there is not enough in the account due to extra building work. Do we still have to pay as above or can we pay 25 per cent each as the hallway is used by all? FPRA Legal Advisor Nick Roberts replies: I shall try to answer your question in general terms: if the leases specify proportions, then that is the proportion in which you must split all service charge expenditure. You do not have the power to charge equal proportions simply because it may seem fairer. The only basis upon which you could split the expenditure equally would be if the owners of the two flats who were supposed to pay less than 25 per cent voluntarily agreed that that would be the proportion that they would pay. That agreement would be for this occasion only: if the intention was to vary the proportions for all time in future, then it would be preferable to have formal deeds of variation drawn up. This would involve a fair amount of legal costs, and you would have to pay the fees to have the deeds registered at the Land Registry. If the proportions payable by three of the flats are fixed, and the proportion payable by the fourth is to be set by the landlord on the basis of what is ‘rateable’ then in practice you have little choice but to set the proportion payable by the fourth so that it covers whatever the outstanding balance is. [Submitted April 2017]

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