What is an administration charge?
An administration charge is a fee to you as a leaseholder for something other than the general service charge — for example, the cost of granting consent to sublet, keep a pet or alter your flat, of providing information when you sell, a late-payment fee, or a charge relating to a breach of your lease.
Administration charges sit alongside — but are legally separate from — the service charge. A service charge pays for the building's shared services, repairs and management; an administration charge is a fee aimed at you individually. They are governed by different statutes. Service charges fall under the Landlord and Tenant Act 1985; administration charges are regulated by Schedule 11 to the Commonhold and Leasehold Reform Act 2002.
What counts as an administration charge
Paragraph 1 of Schedule 11 defines an administration charge as an amount payable by a tenant, as part of or in addition to the rent, that is payable directly or indirectly:
- For the grant of approvals under your lease — the fee for consent to sublet, keep a pet, alter the flat or make other changes that need the landlord's permission.
- For the provision of information or documents — for example the pack fee when you sell and the managing agent completes an LPE1 or answers assignment enquiries.
- In respect of a failure to pay by the due date — a late-payment or default charge.
- In connection with a breach (or alleged breach) of a covenant — costs relating to a breach of the terms of your lease.
Schedule 11 distinguishes a variable administration charge — one that is not specified in the lease and not calculated by a formula in the lease — from a fixed charge that the lease sets out. The distinction matters for how you challenge it.
Your protections under Schedule 11
- Reasonableness. Under paragraph 2 of Schedule 11, a variable administration charge is payable only to the extent that the amount of the charge is reasonable — the same style of test that Section 19 of the Landlord and Tenant Act 1985 applies to service charges.
- Summary of rights. Under paragraph 4, a demand for an administration charge must be accompanied by a summary of the rights and obligations of tenants in relation to administration charges — the administration-charge counterpart of the service-charge summary required by Section 21B. If it is not supplied, you may withhold payment until it is.
- Tribunal jurisdiction. Under paragraph 5 you can apply to the First-tier Tribunal for a determination of whether an administration charge is payable, by whom, to whom, how much, and when. The tribunal can also vary a fixed charge specified in the lease (or its formula) if it is unreasonable.
How to spot an unreasonable one
Consent and information fees are a common flashpoint: a pack fee or licence-to-alter fee that runs into hundreds of pounds is exactly the kind of variable charge that must be reasonable and that the tribunal can review. Check every administration-charge demand for the required summary of rights, keep a note of the work the fee actually reflects, and compare it against what similar tasks should cost. If a late-payment or breach charge looks disproportionate, it is challengeable.
How this shows up in your service charges
Administration charges often arrive tucked in with your service charge demands — a consent fee here, a late-payment charge there. Our free AI audit reads your demands and paperwork and flags charges that look challengeable, whether under the service-charge rules of the Landlord and Tenant Act 1985 or the administration-charge rules of the Commonhold and Leasehold Reform Act 2002.
Start my free audit