The Social Housing Action Campaign has launched a new Parliamentary Petition calling for a new system, similar to the Deposit Protection Scheme, whereby disputed service charges would be paid by the tenant or resident to a neutral body like the courts, and would only pass to landlords if they can prove that the charges are legitimate. If this isn’t proven within a set timescale, the money would be refunded to the tenant or leaseholder.

SHAC Secretary and Cofounder Suzanne Muna explained: “The scheme would end the considerable financial advantage landlords gain by overcharging for services and only refunding if they are forced to do so, especially in the current very weak enforcement landscape, and the imbalance in power between landlord and tenant. Landlords currently have little incentive to return the money, even when tenants and residents overcome significant barriers and win a case at the property tribunal.”

SHAC research showed that around 70% of service charges disputed at the First Tier Property Tribunal in 2024 resulted in landlords being ordered to remove or repay charges. However, there is no real sanction for landlords who fail to make refunds, just the prospect of another long hike through the judicial system for the tenant or resident in an attempt to reclaim their money. 

These things take time

SHAC estimates that in around 80% of member cases where overpayment was proven, refunds took over a year to materialise, and in around 5% of cases, the money was never refunded. Courts also charge a fee in some cases, making legal action unaffordable for some.

Landlords regularly threaten tenants and residents that they will seek payment of their considerable legal fees if the tenant or resident loses their challenge, serving to intimidate many into withdrawing their claim. It is also long-winded, requiring the tenant or resident to first work through a protracted landlord complaints system which takes on average eight months to complete before embarking on a claim.

The new system would mirror the Rent Deposit Scheme (RDS) which has been highly successful in ensuring fairness to both tenants and landlords. An estimated 80% of deposit disputes are settled in favour of the tenants, with deposits swiftly refunded. However, in the remaining 20% of cases, landlords were able to evidence damage to the property and therefore received the deposit instead. 

As well as speeding up refunds, the new scheme would force landlords to provide evidence that services have been delivered if they wish to receive payment for contested charges. Currently, although the law specifies that landlords have to provide a summary of service charges, and the pack of supporting invoices if requested, there is no mechanism for forcing landlords to comply with this legal obligation. Yet even in an information vacuum, tenants and residents are still expected to pay up.

SHAC member Juliet commented: “No organisation would pay an invoice or bill without first knowing exactly what the bill is for. But when I ask my landlord for a breakdown of my service charges and more details, they throw their hands up in shock and horror. How dare I expect transparency! Would a landlord pay an invoice or bill they disputed? No, they would withhold payment until they were satisfied that the bill or invoice was correct. So why the double standards?”

The new scheme would offer a swifter and fairer system, balancing the obligations on both parties to comply with the law. It would also serve as a more effective deterrent to rogue landlords who regularly make demands for extortionate or inaccurate charges than the current regulatory provisions provide. 

The petition can be found at https://petition.parliament.uk/petitions/731196 and launched on the 21st July.  If it reaches 10,000 signatures, the Department for Housing, Communities and Local Government must respond to the petitioner in writing. If it reaches 100,000 signatures, there is the possibility of a Parliamentary debate on the issue. It is part of SHAC’s End Service Charge Abuse campaign. Research and more details about the campaign are available here.

SHAC is a campaign group linking tenants, renters, shared owners, and leaseholders living in social and private housing. We campaign to improve the conditions of homes and neighbourhoods, and to reduce the commercialisation of housing. www.shaction.org  FB: www.facebook.com/groups/www.shaction.org T(X): @SHAC_Action Insta: @SHAC_Action Bluesky: @SHACAction