Service Charge Abuse Must Stop – SHAC’s New Plan for Change

Public Interest Law Centre have been supporting Social Housing Action Campaign (‘SHAC’) for a number of years, most recently on their campaign to end service charge abuse of social housing tenants by landlords.

Below is a guest blog from the campaign, highlighting their call to action for a new scheme designed to tackle service charge abuse for tenants and renters alike. Please sign and share their petition: https://petition.parliament.uk/petitions/731196

"SHAC is calling for a brand-new scheme to help put an end to service charge abuse by landlords. Under this scheme, disputed charges would go straight to a neutral body like the courts, and only get passed to landlords if they can prove within a specified timeframe that the charges are legitimate. Otherwise, the money is refunded to the tenant or resident.

Our Parliamentary petition is aimed at making this happen. If we reach 10,000 signatures, the Department for Housing, Communities and Local Government must respond in writing. If we reach 100,000 signatures, we have the chance of a debate in Parliament.

The current service charging system expects tenants and residents to pay on demand, even if it is clear that charges aren’t legitimately incurred, and even if the landlord has admitted to overcharging. The tenant or resident must then extract a refund from their landlord.

Examples of abuse include charges for concierges or lift maintenance where no such provisions exist, or bills for services on different estates entirely. Or, it is sometimes the case that a service charge demand is presented with no information on what services it allegedly covers. In any normal business transaction, the customer would be well within their rights to refuse to pay until the provider can evidence the legitimacy of their demand, but not when it comes to service charges. It’s a case of pay up now and argue later for a refund.

Although the current legislation on service charges specifies that they must be accurate and reasonable, the practice of overcharging has been growing sharply and has now reached epidemic proportions. SHAC research showed that in 2024, 70% of those who made it into court, received a judgement in their favour.

When tenants or residents win their case, refunds should swiftly follow, but all too often they do not. Landlords have little incentive to repay money knowing that any legal sanction for not complying with a court order is mild, and fines are often cheaper than refunding service charges. Tenants and residents are left facing yet another long haul through the judicial system.

Leaseholders at least have the legal right to receive a summary of charges and an invoice pack, but tenants who pay a separate service charge don’t even have this provision, incredible as that seems. And none of the proposed legal changes currently winding their way through Parliament will close this enforcement gap.

In reality, even the scant protections currently enshrined in law are unenforceable for the vast majority of people. The path to the First Tier Property Tribunal is fraught, bureaucratic, intimidating, expensive, and long-winded.

There is no Legal Aid for service charge cases. And while the landlord enjoys the support of an army of solicitors, and the time and resources to prepare for battle, the tenant or resident is left navigating the judicial system without professional help, and often juggling case preparation alongside work and family commitments. It is an unequal and unfair contest.

SHAC’s scheme would put a stop to this in the simplest way possible. It would mirror the successful Tenancy Deposit Scheme which has significantly limited sharp practice by landlords unfairly retaining deposits. Research has shown that around 80% of deposit disputes are settled in favour of tenants. This means that deposits are swiftly returned without the need for a protracted battle. SHAC wants the same swift justice for service charge disputes.

You can support SHAC’s project by signing and sharing our Parliamentary petition, and find out more about the End Service Charge Abuse campaign here."