Conor Maher

Senior Associate Solicitor

DATE PUBLISHED: 02 Mar 2020 LAST UPDATED: 08 Jul 2021

Unreasonable Housing Service Charges – Regulator Intervenes to Investigate Consumer Protection Breaches

The Competition and Markets Authority (“CMA”) announced last week in a press release that an investigation will be undertaken into the unfair treatment of leasehold homeowners by housing developers and service management companies, in respect of unreasonable and disproportionate charges levied in respect of routine maintenance (amongst other things). The Investigation was initially launched in 2019, with an updated report being produced on 28 February 2020.

According to Andrea Coscelli, Chief Executive of the CMA, “We have found worrying evidence that people who buy leasehold properties are being misled and taken advantage of”.

What is the CMA Investigating Into?

Allegations have been made that homeowners of many leasehold premises (and, to some extent, freehold properties subject to requirements to pay mandatory service charges imposed by the housing developer), have been misled by developers over service charges. This included having been charged unreasonable, excessive, and disproportionate fees in respect of alleged service and maintenance fees.

What problems are homeowners facing?

Commonly, charges are imposed on the justification of maintenance of shared spaces, parking areas, gardening, with the addition of extra health and safety charges and insurance policies. Additionally, excessive fees are ramped up by the application of exorbitant, disproportionate, and unnecessary charges including director’s indemnity costs, accountancy fees, and management fees, which often far outweigh the value of any actual physical work allegedly done.

For example, Ellis Jones is currently dealing with a dispute against a large-scale, nationwide property management firm, who over the past few years have imposed hugely disproportionate administration charges in respect of modest spending on actual maintenance. Specifically, despite the developer spending, on average, just over £600 a year on the maintenance of shared spaces over the last two years, the developer had, over the same period, spent an extortionate average sum of £7,000 on ancillary administration charges, bank fees, accountancy charges, etc.

What is being done?

The CMA investigation is ongoing, and as of yet, no finding has been made as to whether any breaches of consumer protection law have taken place. Public consultation in respect of the investigation is currently open, and the CMA has requested responses prior to 12 July 2020.

In the event that the CMA investigation finds that breaches of consumer protection law have taken place, a large number of leasehold and freehold homeowners will potentially be able to rely on the findings of the investigation to release themselves from liability for any unfair charges, and possibly also make a claim for fees previously paid.

How can Ellis Jones help you?

Our specialist Banking and Finance Litigation team has substantial experience in dealing with claims against Banks and other financial institutions, and we have recovered in excess of £55 million for our clients since 2012. We can assist you by advising upon, and subsequently progressing, a claim or complaint to recover your losses and exclude you from any future liability for service charges, etc.

If you believe you may have been victim of sharp practice on the part of a housing developer, please do not hesitate to contact William Dooley or William Fox-Bregman in our Banking and Finance Litigation team for a no-obligation initial review of your agreement by calling 01202 057733 or by email at

How can we help?

When you submit this form an email will be sent to the relevant department who will contact you within 48 hours. If you require urgent advice please call 01202 525333.

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