Service Charge vs. Subscription

  • Filter
  • Time
  • Show
Clear All
new posts

    Service Charge vs. Subscription

    Hello All,

    First post here . I live in a 1960s block and our lease talks to an "annual subscription" instead of a service charge. There is some debate between us on whether legislation which specifically reference "service charges" is therefore relevant as the landlord determines how to raise and spend the "subscription". I suspect this is substance over form, but appreciate any sage advice on the matter.

    "The Lessee HEREBY COVENANTS with the Society and separately with the Lessor that during the subsistence of the said term the Lessee will pay to the Society an annual subscription of £40 or a proportion calculated as provided in the preceding sub-clause of such other annual sum as may be determined in accordance with the Rules of the Society"


    What does the lease say that the 'annual subscription' is for?
    If this is money that is used to pay towards insurance, maintenance of the block, or the landlords costs of managing the block, it will be a service charge.
    If the block is managed by a company that leaseholders are members of, and this sum is to pay costs incurred by that company, such as directors insurance, it might not be a service charge (if this is the case the lease should make provision for service charges elsewhere).

    It is possible, I suppose, that the 'subscription' might include both a proportion to pay for company costs and a proportion to cover service charge. If that is the case it should be made clear how much is for service charges.

    Service charges are anything that meet the definition given section 18 of the Landlord And Tenant Act 1985:


    Latest Activity


    • Reply to Freeholder/Agent Demanding Money for Repairs
      by eagle2
      It makes you wonder why any freeholder should comply with s20 at all. As you say, it can wait to see if any leaseholder challenges the costs. It does not even need to explain why it did not comply with s20, the only consideration appears to be whether or not the leaseholders suffered any financial prejudice,...
      23-10-2021, 06:34 AM
    • Freeholder/Agent Demanding Money for Repairs
      by SSLA91
      Hi all,

      Long time lurker of this forum and recent new member. Have always found the forum incredibly helpful so thank you! Have now got an issue with our freeholder that I could use some specific advice on (have tried searching for similar posts but to no avail).

      We have recently...
      20-10-2021, 20:28 PM
    • Reply to Section 20 notice
      by Starlane
      Hi Macromia thank you as always for your helpful and sensible input.. one building is saying one thing and another building the other, the usual chinese whispers so I took the bull by the horns and spoke to everyone and I am almost there apart from a Director who wants to do their own thing ( not being...
      22-10-2021, 20:57 PM
    • Section 20 notice
      by Starlane
      Hello I would welcome input on the following:
      Two roofs feed into a valley, the valley is in need of repair, this is a shared responsibility and therefore a shared cost. so how do we issue a section 20 notice when really we need the consent and agreement from two different buildings/landlords...
      22-10-2021, 19:09 PM
    • Reply to Share of freehold questions - confused
      by Starlane
      Agree thank you...
      22-10-2021, 20:52 PM
    • Share of freehold questions - confused
      by sixunforced
      Not sure if this is the right place for this query but anyway, I'm a first time buyer and have been searching for a property for like two years now (not continuously but on and off and obv covid halted my search for a while). I found a really nice 2 bedroom flat for under £320,000 in a block of around...
      18-11-2020, 21:19 PM
    • Reply to Section 20 notice
      by Macromia
      Assuming that the two freeholders have agreed that they will work together and share the costs, they jointly agree what needs to be communicated to the leaseholders and then each freeholder writes to the leaseholders in their building.
      22-10-2021, 20:16 PM
    • Reply to Freeholder threatening to cut water off
      by Macromia
      This is possibly by far the most important consideration, in my opinion.
      If the OP's lease doesn't allow 'improvements' to be charged to service charges, the freeholder cannot require them to contribute anything towards the costs, and would therefore be something that they would have had no choice...
      22-10-2021, 20:08 PM
    • Freeholder threatening to cut water off
      by Disraeli-LLH
      I was hoping you would be able to help. We own a ground floor flat LLH(970 yrs remaining). The freeholder owns the house and lets the flat upstairs on an AST.

      The freeholder currently undertaking works including replumbing. We have been on a shared water supply and we connect through their...
      20-10-2021, 15:35 PM
    • Reply to Freeholder/Agent Demanding Money for Repairs
      by Macromia

      Although when my freeholder applied for dispensation a while back (arguing that the proposed work had to be carried out as a matter of urgency) they were granted dispensation with the First Tier Tribunal commenting that the 2013 Supreme Court Case of Daejan versus Benson meant...
      22-10-2021, 19:51 PM