Leasehold properties and administration charges – do I have to pay them?

It is a truth universally acknowledged that if you do not pay something on time, you will likely be charged a “late payment fee” of some sort. Whilst that may well be acceptable in certain cases, it is not always the case in the world of leasehold property.

As always, one must first turn to the lease to assess whether liability arises. Whether it is a late payment fee because you have not paid service charges on time, or late payment interest due on those overdue service charges, it is important that you understand whether or not they should be paid, taking into account what type of charge it is.

As far as the law is concerned, administration charges are defined by statute. In brief, an administration charge is an amount payable :

(i) For or in connection with the grant of approvals under a lease, or applications for such approvals;

(ii) For or in connection with the provision of information of documents by or on behalf of the landlord or a person who is party to a lease otherwise that as landlord or tenant;

(iii) In respect of a failure by the tenant to make a payment by the due date to the landlord or a person who is party to a lease otherwise than as landlord or tenant, or;

(iv) In connection with a breach (or alleged breach) of a covenant or condition in a lease.

The above four points are often considered quite precise, leaving little to nothing in terms of interpretation for any parties.

Thursfields are experts in leasehold law and are available to assist any party to a lease in disputes concerning administration charges or late payment interest, which can often be significant in amount. We can represent you in proceedings in the county court or the tribunal, in either bringing or defending an action for payment of administration charges.

Contact our leasehold specialist, Daniel Tetsell on 01905 730462 or dtetsell@thursfields.co.uk for an initial discussion.