A service charge is the financial contribution paid by leaseholders towards the cost of maintaining, managing, repairing and insuring the communal areas of a residential or mixed-use building.
Service charges are governed by the lease and relevant legislation including the Landlord and Tenant Act 1985.
They typically cover repairs, cleaning, utilities, compliance inspections, building insurance and managing agent fees.
Service charges must be reasonably incurred and properly demanded. Directors of RMC and RTM companies have fiduciary duties to ensure transparency and financial accountability.
Leaseholders have statutory rights to request summaries of costs and challenge unreasonable charges at tribunal.
At Regal & Co Management Limited, service charges are budgeted annually, reviewed against historic expenditure, and reconciled with year-end accounts to ensure clarity and compliance.
