Get in Touch Menu

Don’t get burnt with service charge disputes

22 May 2023

It is a common term in a lease that a certified service charge sum demanded by the landlord is ‘conclusive’. But what should you do if the service charge is disputed? Should the service charge be paid in any event and then disputed, or do tenants risk having to pay the costs and interest incurred by the landlord as they seek to recover the disputed sum?

In Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd, the Supreme Court recently answered this question and the outcome will be of interest to landlords, managing agents and tenants alike.

The landlord in the case argued that the certificate must be conclusive, other than in cases of manifest error, mathematical error or fraud. On this basis they suggested that the tenant needed to pay up, with no later right to dispute.

The tenant argued that the certificate was conclusive that the landlord had incurred costs, but not conclusive of the proportion of those costs to be paid by the tenant. The tenant therefore argued that they were entitled to dispute the service charge and then only pay upon determination of the sum.

The Supreme Court disagreed with both parties’ approach and concluded that:

  • the certificate for the service charge was conclusive of the amount that the tenant was required to pay
  • the tenant could still challenge whether it was liable to pay the sums sought. If that challenge was successful, the landlord would then be required to repay any overpayment.

The tenant was therefore required to pay the sums demanded in accordance with the terms of the lease, then seek to challenge those sums claimed at a later stage.

Service charge disputes are increasingly common as the costs of operating shared buildings or estates has vastly increased in recent years. It is therefore vitally important that parties obtain legal advice before entering leases or tenancies, and when dealing with disputes over service charge.

If you require legal advice in relation to any dispute regarding property, please contact our property litigation specialists.

Contact us

Our Legal 500 and Chambers-rated litigation & dispute resolution team help private and commercial clients to resolve a wide range of disputes, including those related to property.

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Nick Southwell BA (Hons)
View profile
Nick Southwell, litigator at Willans LLP
Related services
Share this article
Resources to help

Related articles

Property disputes: They didn’t tell me the neighbours were a nuisance when I purchased the property!


When purchasing a property, the seller must complete a sellers property information form (SPIF). These include simple questions asking whether there has ever been – or if there are currently…

Bethen Abraham LLB (Hons), LLM

Landlords: Are you fire safety ready?


The Fire Safety (England) Regulations 2022 came into effect on 23 January this year. These regulations will materially impact landlords, managers and operators of buildings in England that contain two…

James Melvin-Bath LLB (Hons)
Senior associate, solicitor-advocate

Quit drafting the notice to quit


The Court of Appeal has recently deemed a notice to quit invalid as it was addressed incorrectly, highlighting the importance of accuracy when preparing and serving notices. The court considered…

Bethen Abraham LLB (Hons), LLM
Contact us