The leasehold service charge glossary
Leasehold service charges come wrapped in jargon — Section 20, the 18-month rule, LPE1, apportionment, dispensation. This glossary defines the terms that actually affect what you pay, in plain English, each with the UK statute behind it and a link to how it shows up in your own service charges.
Your rights & the law
Section 19 reasonableness
The core reasonableness test for service charges.
Section 20 notice
Consultation required before major works or long-term agreements.
Section 20B (18-month rule)
The 18-month time limit on billing old costs.
Section 20C order
Stops the landlord recharging legal costs to you.
Section 21B rights summary
The rights summary every demand must include.
Section 22 inspection right
Your right to inspect the invoices behind charges.
Dispensation (s20ZA)
When the tribunal excuses a botched consultation.
Recognised tenants' association
Leaseholders' group with statutory collective rights.
Money & charges
On-account payments
Advance instalments paid on an estimated budget.
Balancing charge
Year-end true-up between estimated and actual costs.
Reserve (sinking) fund
Advance money for future major works, held on trust.
Major works
Big one-off works that trigger Section 20.
Apportionment
How service charge costs are split between flats.
Administration charges
Consent, information and default fees (CLRA 2002 Sch 11).
Demand validity
What a demand must include to be payable.
Accounts certification
Annual independent sign-off of your accounts.
People & bodies
Managing agent vs freeholder
Who owns the building vs who is hired to run it.
First-tier Tribunal
The tribunal that decides service-charge disputes.
Right to Manage (RTM)
No-fault right to take over management.
Residents' Management Company
Lease company through which leaseholders run the block.
The Property Institute (TPI)
UK professional body for property managers.
Buying & the lease
LPE1 form
The leasehold sale form that discloses charges.
Ground rent
Rent paid to the freeholder for the land.
Lease extension
A leaseholder's right to add years to the lease.
Marriage value
Extra premium payable once a lease drops below 80 years.
See how these apply to your own charges
Knowing the terms is the start. Our free AI audit reads your service charge demand, accounts and lease and shows you, line by line, how much could be challengeable under the Landlord and Tenant Act 1985.
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