The cost of living crisis and a greater awareness amongst leaseholders of their rights has driven up the number of residential property disputes currently in the courts by over 50 per cent compared to last year, according to London law firm Spector Constant & Williams.
Official statistics show that there were 8,446 residential property open cases at the end of June 2023, an increase of 54% compared to the same period in 2022.
Property lawyers at Spector Constant & Williams say that disputes over service charges in particular are driving up tribunal cases as leaseholders demand more transparency over service costs from landlords.
Sherry Ziaie‑Fard, lawyer at Spector Constant & Williams, said: “While the property tribunal deals with various areas of property law such as lease extensions, variations of leases, enfranchisement disputes, they have a huge number of service charge disputes, which has been on the increase over the years. There are various factors driving these disputes. Leaseholders are now more aware of their legal rights and the power of the internet has played a part in this over the last 20 years. More recently, the increase in living costs and mortgage payments means people are more careful with their expenses. Given it is now more difficult to get on the property ladder, those who own properties require a certain level of service. Add to that the costs of services and maintenance has increased and this increase falls on leaseholders.”
What landlords can do
Spector Constant & Williams says that landlords can do more to avoid facing a dispute in the tribunal.
Sherry Ziaie‑Fard said: “Landlords should engage more with leaseholders and ensure they are kept up to date regularly, that they maintain transparency in their accounts and have a paper trail to make available for leaseholders as and when they request it.
“Many leaseholders tend to feel disgruntled due to a lack of information or failure to engage. Landlords/freeholders need to know and understand the law and all procedures related to service charges and ensure all these are followed. Leaseholders’ grievances should be properly addressed, which in many instances, are not.
“The choice of managing agent is also very important. They need to be more aware of the law and procedures and service charges. Unfortunately, many of them have very basic knowledge and, with the service charges only increasing due to the rising costs, this is no longer acceptable for leaseholders.”
The Ministry of Justice quarterly tribunal statistics for April to June 2023 show that residential property tribunal figures have increased in the last two quarters. In April to June 2023 the number of cases reaching the tribunal has increased by 41% (to 3,182) compared to the same period in 2022.
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