How Can I Reduce My Leasehold Service Charges?

Published by Leaseholder Led · Independent guide — updated 2026

Understand what you're paying for

Before you can reduce service charges, you need to understand what's in them. A typical service charge includes several components, and the split between them varies widely depending on the building:

Your lease is the starting point. It sets out exactly what can and cannot be charged to leaseholders, how the charge is calculated, and what proportion you pay. If a cost isn't authorised by your lease, you don't have to pay it — no matter what the managing agent says.

Quick wins: things you can do this week

These steps cost nothing and can be done by any leaseholder acting alone. They won't transform your service charges overnight, but they build the knowledge base you need to take bigger steps later.

Request a summary of service charge costs

Under Section 21 of the Landlord and Tenant Act 1985, you can request a written summary of the costs that make up your service charge for the previous 12 months. Your landlord is legally required to provide this within one month. If they don't, they're committing a criminal offence.

Inspect the receipts

Under Section 22 of the LTA 1985, you have the right to inspect the invoices, receipts, and other documents supporting the summary. This means you can see exactly what was paid, to whom, and for what. Take a fellow leaseholder with you — a second pair of eyes catches things you'll miss.

Check whether Section 20 was followed

If your service charge includes a contribution toward major works (anything costing more than £250 per leaseholder) or a long-term agreement (over 12 months), the landlord must have followed the Section 20 consultation process. This requires two rounds of written consultation with leaseholders before committing to the expenditure. If the process wasn't followed, your contribution is capped at £250 for those works — regardless of the actual cost.

Compare your management fee to market rates

Management fees for residential blocks in England typically range from £200–£500 per unit per year, depending on the size and complexity of the building. If your fee is significantly above this range, ask why. A 100-unit building paying £600 per unit in management fees alone should be asking serious questions.

Challenge unreasonable charges at tribunal

If you've reviewed your charges and believe specific items are unreasonable, you can apply to the First-tier Tribunal (Property Chamber) under Section 27A of the Landlord and Tenant Act 1985. The tribunal can determine whether charges are “reasonably incurred” and whether work was done to a reasonable standard.

The test is reasonableness, not perfection. The tribunal won't second-guess every line item, but it will scrutinise costs that look disproportionate, work that was poorly specified, or contracts that were never competitively tendered.

A few practical points: tribunal applications are relatively low-cost (currently £100–£350 in application fees). You don't need a solicitor, though professional advice helps for complex cases. The tribunal can't award costs against you simply for bringing a claim, so the financial risk is limited. And the statistics are encouraging — research by the Social Housing Action Campaign found that over two-thirds of service charge challenges were either fully or partially upheld.

One limitation: the 18-month rule. Under Section 20B of the LTA 1985, service charge costs can't be recovered from leaseholders more than 18 months after they were incurred, unless the landlord notified you in writing within that period. Late demands are worth checking — if the rule was breached, the charge may not be recoverable at all.

Work together with other leaseholders

Individual complaints are easy for a managing agent to deflect. Collective scrutiny is much harder to ignore.

The practical step is to start sharing information with your neighbours. Compare service charge demands. Check whether everyone is being charged the correct lease proportion. Pool your findings. You don't need a formal structure to do this — a WhatsApp group and a shared spreadsheet are enough to start.

If you want formal standing, you can form or join a Recognised Tenants' Association (RTA) under Section 29 of the LTA 1985. In practice, RTAs confer limited additional legal rights beyond what individual leaseholders already have — the main exception is the right to appoint a surveyor under Section 84 of the Housing Act 1996 to audit the service charge accounts. But the real value of organising collectively isn't legal — it's political. An agent dealing with one unhappy leaseholder has a “complaint.” An agent dealing with 30 coordinated leaseholders has a problem.

The structural solution: take control of management

Everything above helps you reduce costs within the existing management structure. But the single most effective way to reduce service charges long-term is to change who manages your building — and how they're held accountable.

When leaseholders control the management appointment (either through a Residents' Management Company, an RTM company, or a shared freehold), they can run a competitive tender, negotiate fees directly, scrutinise every contract, and replace the agent if performance falls short. This is exactly how commercial property management works. There's no reason residential buildings should be any different.

The route depends on your building's legal structure. If your building has a management company controlled by leaseholders (an RMC), the directors may already have the authority to change agent without any legal process — see our guide on changing your managing agent without RTM. If the freeholder controls management, you'll likely need to exercise Right to Manage first.

Either way, the outcome is the same: leaseholders choose the agent, set the terms, and hold them to account. In my experience, the first competitive tender after leaseholders take control typically delivers material savings on management fees and better-negotiated contracts for maintenance, insurance, and cleaning — not because the previous costs were necessarily corrupt, but because they were never tested against the market.

Common questions

Ready to take control?

Related guides

• •How Do I Complain About My Managing Agent? — the formal complaints process and when to move beyond it
• •What Is Right to Manage and Do I Need It? — understand whether RTM is the right route for your building
• •Can I Change My Managing Agent Without Right to Manage? — for buildings where leaseholders already have the authority