# Service charge

The amount leaseholders pay, under their leases, towards the cost of services, repairs, maintenance, improvements, insurance and management of their building, which goes up or down with the actual costs.

Also called: variable service charge, maintenance charge.

What can be charged, how it's split and when it's due all come from the **lease**. The law then adds protections on top.

## The main protections

- **Reasonableness.** Costs count only to the extent they are reasonably incurred, and works must be of a reasonable standard (s.19).
- **Consultation** before large works or long contracts: [Section 20](https://runyourblock.co.uk/glossary/section-20-consultation).
- **Time limit:** costs must normally be demanded within the [18-month rule](https://runyourblock.co.uk/glossary/18-month-rule).
- **Paperwork:** demands must carry the right information (see [service-charge demand](https://runyourblock.co.uk/glossary/service-charge-demand)).
- **Trust:** the money is held on trust for the leaseholders ([trust money](https://runyourblock.co.uk/glossary/trust-money)).
- **Disputes:** the [First-tier Tribunal](https://runyourblock.co.uk/glossary/first-tier-tribunal) can decide what is payable, even if it has already been paid (s.27A).

## When you run the block

These rules apply to your RTM company or residents' management company just as they applied to the landlord. Many self-managed blocks set the charge with an annual budget, collect it in instalments on the dates the lease sets, and settle the difference with the actual costs at the year end. See [Budgets and service charges](https://runyourblock.co.uk/guides/running-your-block/budgets-and-service-charges).

## Related terms

- [Service-charge demand](https://runyourblock.co.uk/glossary/service-charge-demand)
- [Apportionment](https://runyourblock.co.uk/glossary/apportionment)
- [Reserve fund](https://runyourblock.co.uk/glossary/reserve-fund)
- [Section 20 consultation](https://runyourblock.co.uk/glossary/section-20-consultation)
- [Trust money (section 42)](https://runyourblock.co.uk/glossary/trust-money)

## Sources

- [Landlord and Tenant Act 1985, s.18 (meaning of service charge)](https://www.legislation.gov.uk/ukpga/1985/70/section/18)
- [Landlord and Tenant Act 1985, s.19 (limitation by reasonableness)](https://www.legislation.gov.uk/ukpga/1985/70/section/19)
- [Landlord and Tenant Act 1985, s.27A (tribunal determination)](https://www.legislation.gov.uk/ukpga/1985/70/section/27A)

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Updated 22 October 2026. Source: https://runyourblock.co.uk/glossary/service-charge