What does Section 19 of the Landlord and Tenant Act 1985 say?

Section 19 limits service charges to relevant costs that are reasonably incurred, and only where the works or services are of a reasonable standard (s19(1)). Where a charge is payable in advance, no more than a reasonable amount is payable, with adjustment once the actual costs are known (s19(2)).

Who decides whether a service charge is reasonable?

If it is disputed, the First-tier Tribunal (Property Chamber) decides. Under Section 27A of the Act it can determine whether a charge is payable and how much, and where a charge fails the Section 19 test it can reduce or disallow it.

Can I challenge a service charge just because it seems high?

A high figure alone is not the test — the question is whether the cost was reasonably incurred and the work of a reasonable standard. But an unexplained or above-market charge is a strong reason to ask for the breakdown and, if it does not stack up, to challenge it under Section 19.

What is Section 19 reasonableness?

Almost every successful service-charge challenge comes back to Section 19. It is the statutory limit on what a landlord can recover through the service charge, and it applies no matter what the lease says about how charges are worked out — the lease can decide how costs are shared, but Section 19 governs whether they are recoverable at all.

The two-part test in Section 19(1)

Section 19(1) sets out two conditions that must both be met before a cost can be charged in full:

Reasonably incurred — relevant costs are taken into account "only to the extent that they are reasonably incurred". This looks at whether it was reasonable to spend the money at all, and whether the amount spent was reasonable.
Reasonable standard — where the cost is for providing services or carrying out works, it counts "only if the services or works are of a reasonable standard". A poorly done job is not fully chargeable, however much it cost.

If either limb fails, "the amount payable shall be limited accordingly" — meaning the tribunal can cut the charge down to what would have been reasonable, or disallow it entirely.

Advance payments — Section 19(2)

Many leaseholders pay on account before the money is actually spent. Section 19(2) says that where a charge is payable in advance, "no greater amount than is reasonable is so payable", and once the real costs are known "any necessary adjustment shall be made by repayment, reduction or subsequent charges or otherwise". That year-end true-up is the balancing charge — and it, too, has to be reasonable.

Good to know: reasonableness and consultation are two different tests. Section 20 caps each leaseholder's contribution to major works at £250 (and to a qualifying long-term agreement at £100 a year) if the landlord did not consult properly. Section 19 is the separate, always-applicable question of whether the cost was reasonable. A charge can clear Section 20 and still fail Section 19.

Who decides, and how

If a charge is disputed, the First-tier Tribunal (Property Chamber) decides. Under Section 27A of the same Act it can determine whether a service charge is payable and, if so, how much — and it is here that the Section 19 test is applied. Importantly, you do not have to pay first: an application can be made whether or not any payment has been made, and paying does not count as agreeing the charge.

Why it matters to you

Section 19 is the foundation of most successful challenges. Whenever a charge looks inflated, badly evidenced, or above what the market would charge, the reasonableness test is your route to getting it reduced. Our guides on how to challenge service charges and whether your service charge is too high walk through exactly how to put a Section 19 case together.

The two-part test in Section 19(1)

Advance payments — Section 19(2)

Who decides, and how

Why it matters to you

How this shows up in your service charges