Leaseholders with leases written before 1989 may be due a refund for the administration part of their service charges. Please check if this applies to you
We recently heard from an NHG leaseholder who had a lease written by Lambeth Council in 1986. Paragraph 4(B)(c) of her lease says “That the Council shall be entitled to add a reasonable sum for general administration expenses such sum being 10% of the total costs incurred by the Council and payable by the Tenant in respect of Clauses 3 and 4 hereof”
NHG have now accepted that this means that any administration charge (for example on the service charges) cannot exceed 10%. In an email on 24th August they said “NHG can confirm we are currently reviewing leases and that we’ll bring management fees in line with the charges specified in the lease moving forward. We will write to you again once the lease review is concluded”
If we could suceed with NHG, largely thanks to the determination of one resident, we can suceed with other landlords too. Please check your lease to see what clause applies to you. If you have an old lease where charges are capped please email your landlord to demand a refund:
Please copy us in on the email.
Note that this does not apply to all leases. A lease written in 1989 has uncapped administration charges. Also:
- Another leaseholder has a lease written by Lambeth Council in 1992. It states “management costs being not less than 10% of the total service charge” (Fourth Schedule, part 1, paragraph 8). A lease written in 1990 has a similar clause
- The secretary has a lease written by Metropolitan Housing Trust in 2003 that states he has to pay “management costs being not less than 10% of the total Service Charge” (Fourth Schedule, part 2, paragraph 1)
Finally, we’ve heard a rumour that when the estate was transferred to the housing associations at the start of this millennium the housing associations promised to cap administration costs at 10%. However, we’ve never been able to find documentary evidence to prove this. If you have any documentary evidence please let us know.
Nobody in the residents association is a property lawyer. This is not legal advice