Leasehold glossary

What is service charge apportionment?

Apportionment is how a building's total service charge costs are divided between the individual flats. The method is set by the lease — often a fixed percentage per flat, a "fair and reasonable proportion", or a split by rateable value or floor area. The landlord must apportion in the way the lease requires.

When a building spends money on repairs, cleaning, insurance and management, that total cost has to be split between the leaseholders. Apportionment is the mechanism for doing so: it decides what percentage of the building's total service charge you personally have to pay. Get the apportionment wrong and you can be charged too much year after year, so it is one of the first things worth checking on any demand.

How the split is decided

The method is set by your lease, and there are several common approaches:

  • Fixed percentage — the lease states a set percentage for your flat (for example 2.5%). This is the most common and the easiest to check.
  • Fair and reasonable proportion — the lease requires you to pay a "fair and reasonable" or "due" proportion, leaving the landlord to work out the split reasonably.
  • Rateable value — an older method dividing costs by the historic rateable values of the flats.
  • Floor area — costs split in proportion to the size of each flat.

Whatever the method, the key principle is that the landlord must apportion in the way the lease actually requires — not in whatever way is cheapest to administer or most favourable to the freeholder. Applying the wrong method, or changing it without the authority to do so, makes the resulting charge challengeable.

A quick sense-check: where the lease sets fixed percentages, the shares across the whole building should generally add up to 100%. If they add up to more, the landlord may be recovering more than the building actually costs; if they add up to less, there may be a shortfall the landlord cannot simply pass on to you. Either is a red flag worth querying.

Reasonableness still applies

Even where the apportionment is correct, the underlying costs must still be reasonable. Section 19 of the Landlord and Tenant Act 1985 limits service charges to costs that are reasonably incurred and to works of a reasonable standard. Apportionment decides your share; reasonableness decides whether the total should have been that high in the first place. Both are worth checking together.

Challenging the apportionment

If you think the split is wrong — the wrong method has been used, the percentages do not add up, or the method has been changed without authority — you can dispute it. Questions about whether a service charge is payable, and how much, can be determined by the First-tier Tribunal under Section 27A of the Landlord and Tenant Act 1985. Our guide on how to read your service charge demand shows you where the apportionment figure appears and what to compare it against.

How this shows up in your service charges

A wrong apportionment quietly inflates every bill you receive. Our free AI audit reads your service charge demand, accounts and lease, checks your share against the method the lease actually requires, and shows you, line by line, how much could be challengeable under the Landlord and Tenant Act 1985.

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