Introduction

Having a flat in the UK means you have to deal with all kinds of special rules when it comes to being a property owner, or leaseholder. For many leaseholders (referred to as tenants under landlord and tenant laws), the service charge and the management arrangements are often contentious.

Where a property owner lives in a block that either owns the freehold, via a freehold management company, or has a tri-party lease with a residents management company written into it, or has gained control and set up a Right to Manage company, such property owner, or leaseholder will find that the delicate balance they have to strike with the company can feel like walking a tightrope. This blog will look at the day-to-day challenges and conflicts a typical leaseholder might encounter. We'll also give you some handy tips to help you navigate these tricky situations.

What is a leaseholder's role in a management company?

When purchasing a leasehold flat and the competent landlord who collects the service charge is an owner-controlled entity, then the leaseholder will have to get to grips with being both a tenant (responsible for paying service charges and adhering to tenancy terms) and as a member of the Management Company. While this may sound straightforward, it can prove rather confusing. As a leaseholder or tenant, one’s primary concern is usually their own flat and ensuring any service charge they pay is value for money; yet as a company member, the same leaseholder also bears responsibility for the entire building. This dual role frequently gives rise to conflicts, particularly when financial decisions directly impact a leaseholder’s personal finances.

Why do service charges cause so many disputes?

Service charges are at the heart of most leasehold frustrations. They cover things like maintenance of communal areas, insurance, cleaning, and repairs. The trouble starts when leaseholders feel they’re not getting good value, or when costs seem to spiral without explanation. Transparency is key. If the management company or managing agent doesn’t communicate clearly, resentment quickly builds.

In many owner controlled management companies, the directors are also leaseholders. This means that they wear two hats, which can creates a clash of interests.
Imagine being a director who has to approve a costly roof repair. As a director, you know the work is essential. But as a leaseholder, you’re staring at a big bill that perhaps you cannot afford to pay. It’s easy to see why directors feel conflicted and why other residents might suspect decisions are unfair. These conflicts can turn neighbourly chats into boardroom battles.

Can leaseholders challenge unreasonable service charges?

Yes, leaseholders do have rights. Under UK law, you can challenge service charges at the First-tier Tribunal if they seem unreasonable. This is an important safeguard, but it’s not always quick or stress-free. Many leaseholders are unaware of their rights, or they’re reluctant to take on the hassle of a formal dispute. But knowing that option exists gives you some leverage when raising concerns with the management company.

What happens when communication breaks down in a block of flats?

In apartment buildings, poor communication only adds fuel to the fire. When residents feel their voices are unheard, rumours spread and minor misunderstandings can escalate into major disputes. A simple quarterly newsletter, an open meeting, or even a WhatsApp group can play a vital role in preventing problems. The best-managed buildings typically have a management company that drives personalised, director led communications that ensure transparency and inclusivity.

How can leaseholders and management companies work together better?

Although it may not always feel that way, tenants and management companies are fundamentally on the same side. Both parties desire a secure, well-maintained building and a fair distribution of costs. Specific measures include: establishing clear budgets, consulting tenants at an early stage regarding major decisions, and ensuring documentation is readily accessible. When directors remember they are neighbours too, and tenants understand that directors are volunteers, matters tend to proceed more smoothly.

For small blocks of flats, ServiceChargeSorted.co.uk is the smart, streamlined alternative to hiring a managing agent. It handles everything—from budgeting and invoicing to arrears chasing, legal proceedings, end-of-year accounts, and Companies House filings—all via an intuitive online platform. Just set your service charge budget, upload supplier invoices like drainage repairs, and we’ll take care of the rest, including banking and reconciliation. Curious? Give ServiceChargeSorted.co.uk a try.