My landlord is demanding I pay a share of their £3,600 service charge: Is this normal in a rental agreement?

I am currently renting a spare room in a three bedroom flat in London, which costs £900 a month.

My landlord lives in the property with his partner and had me sign a tenancy agreement when he accepted my offer on the rental platform, Spareroom.

That was all fine, except my landlord sent me a bill recently for my share of the heating bills, council tax, water bill, wifi, tv licence and service charge.

I was prepared to pay for most of these, but the inclusion of service charge has really thrown me as it’s by far the biggest cost and I didn’t realise I was liable to pay it.

When I queried it over text message, my landlord replied with a clause from the tenancy agreement and says it includes service charge. He also sent me a spreadsheet of all the costs. It showed the service charge costing £3,600 a year, which divided by three, equals £1,200 each.

The clause from the tenancy agreement states: 

Utilities and outgoings: The Tenant shall pay a reasonable and proportionate contribution (according to use) of all charges for gas, electricity, oil, water, sewerage, telephone (including line rental), council tax (or any similar property tax that might be charged in addition to it), any television licence or other services used at the Property.

Does the inclusion of ‘other services’ really mean I have to pay a third of their service charge? What would you advise me to do in this situation?  

Ed Magnus of This is Money replies: This is a rather niche request by your landlord. Service charge isn’t typically paid by a tenant. 

Your landlord is likely either a leaseholder or owns a share of the freehold with a management company in place.

Most leaseholders, particularly those in purpose-built apartment blocks, will have a service charge to pay, which goes towards the upkeep of the building and any communal areas.

It can include the costs of buildings insurance, cleaning, gardening, repairs of communal areas, surveyors’ fees, fire risk assessments and managing agents fees.

For some purpose built apartments, it can sometimes include things like a gym, concierge and parking, for example. 

The landlord may try to claim that reference to ‘other services’ in the contract would insinuate you are also liable to pay your share for the service charge.

But this seems rather harsh and a even a little absurd. 

For a start, they should have specifically outlined that this referred to service charge and made that clear in the tenancy agreement. 

To claim ‘other services’ relates to services paid for by the service charge seems a rather tenuous link to make.

Second, the landlord should have outlined the way the service charge is organised and the costs involved from the outset. After all, this is what the freeholder or management company should have done for them.

The request for service charge seems even more unfair and unreasonable given the fact that it is also the biggest cost being lumped at you aside from the rent itself.

The best thing you can do is to diplomatically discuss this with your landlord. Explain this was not something you expected to pay for and not something that a landlord has ever asked you to pay towards in the past.

However, if your landlord refuses to budge, then it may mean that you have to look for a way to leave the tenancy early.

This could of course give rise to further complication, particularly if you have paid a deposit or have signed up to a fixed term tenancy agreement. 

For expert advice, we spoke to Caroline Preist, partner and head of property disputes at RWK Goodman and Al Mcclenahan, founder of the non-profit organisation, Justice for Tenants. 

Are they liable to pay a share of the service charge? 

Caroline Preist, partner and head of property disputes at RWK Goodman says that while it is normal to share the cost of heating and council tax. Paying for service charge is not normal

Caroline Preist replies: What you have to pay for your accommodation is based on the agreement you have with your landlord. 

I’m assuming in your agreement the ‘property’ means the flat. It would be usual for you to share the cost of the heating, council tax and items that relate to your occupation of the flat. 

Service charges are amounts the landlord has to pay to the owner or the manager of the block that the flat is in and will include a contribution to repair and maintenance, insurance, management fees gardening etc of the block. 

These are not services used at the property and therefore should not be charged to you. 

Al Mcclenahan replies: The clause does not specify that contributions need to be made towards the service charge for the building. It is clear to me that there is no obligation to pay the service charge.

Service charges are usually to maintain the property’s value by making improvements to the whole block – a tenant will rarely be expected to pay towards it. 

If a tenant is expected to pay towards a service charge, this must be clearly stipulated in the tenancy agreement. That is not the case here.

Al Mcclenahan, founder of Justice for Tenants says the tenant isn’t liable for service charge

What should they do? 

Caroline Preist replies: Your position, as you share accommodation with your Landlord is an ‘excluded occupier’ more typically called a lodger and as such you have very few rights, certainly less than a tenant would have . You could be asked to leave on relatively short notice so bear that in mind.

My view would be that you explain this to your landlord and pay only the costs that relate to the flat. 

However, as I have said you have very few protections as a lodger and it would be easy for the landlord to give you notice to leave if he does not agree. 

The landlord will not need a court order and if you do not leave could change the locks to exclude you. So a difficult choice for you.