Ask for the Accounts Before the Second Viewing: A Flat-Buyer's Guide to Service Charges

Nobody falls in love with a flat because of its service charge. You fall for the parquet, the bay window, the surprising fact that the second bedroom is a genuinely usable bedroom. The service charge is the figure you nod along to on the doorstep, roughly the cost of a gym membership per month, and therefore filed under "manageable".

Then the budget lands in your inbox, the figure has grown a leg, and you start doing sums on the back of a receipt.

For anyone buying a leasehold flat in 2026, those accounts are the closest thing to a full medical history. They tell you what the building has cost to run, what it's about to cost, and whether the other people who share your roof are keeping up with their share. Read them before you get emotionally attached and you'll make a much clearer-headed decision.

Start with the boring arithmetic

A service charge isn't a bill, it's a budget. Your landlord or managing agent estimates what the building will cost to run for the year, divides it between the flats, usually by floor area, and asks you to pay monthly or quarterly. At the end of the year the actual spend is compared with the estimate. If they under-estimated, you get a balancing charge. If they over-estimated, you get a credit.

So the first thing to ask is not "how much is the service charge?" but "how far off has the budget been for the last three years?" A block that consistently under-budgets by fifteen per cent is a block where you'll get a surprise invoice every spring. Consistency between budget and actuals is a quiet sign of competent management — and it's surprisingly rare.

Get the paperwork early, not after you've fallen

Ask the estate agent at the first viewing for the last three years' service charge accounts, the current year's budget, the reserve fund statement, and any section 20 major works notices. Some agents will have it to hand. Some will promise it and never send it. Both answers are useful.

Formally, once you're a party to the lease you can inspect the accounts under section 22 of the Landlord and Tenant Act 1985, and in practice it's the seller who requests the management pack through their solicitor. But there's nothing stopping you asking questions before you instruct anyone. If a seller or agent is reluctant to hand over three years of accounts for a building you're about to part-fund, that reluctance is data.

The lines worth staring at

1. The reserve (sinking) fund balance

This is the pot saved for big, occasional jobs: roof, lifts, external redecoration, windows, drainage. A healthy block builds it up steadily. Compare the balance per flat against the age and condition of the building. A 1930s mansion block with £4,000 in the pot and a lift from the same era isn't saving — it's waiting.

2. Buildings insurance

Premiums for blocks have moved sharply in recent years, particularly for anything with combustible cladding, complex roofs or a history of claims. Look at the premium line across three years, not one. A jump of forty per cent with no explanation in the accounts is worth a direct question, because whatever caused it hasn't gone away.

3. Anything labelled building safety

Interim fire safety measures, waking watches, alarm upgrades, compartmentation surveys. These are real costs that have landed on leaseholders across the country since 2017, and where they're still running they can be substantial. Ask what's covered by the building's own remediation plan, what protections apply under the Building Safety Act 2022, and what is still being passed through the service charge. Get the answer in writing, from the solicitor, not from the agent's memory.

4. Section 20 notices — issued, pending, or suspiciously absent

Major works over a threshold per leaseholder require formal consultation. Ask whether any notices have been served in the last five years and whether any are expected. A block that has just consulted on a roof and hasn't yet billed for it is a block with a bill in the post.

5. Management fees against what actually happens

Is there a managing agent, or is the block self-managed by a residents' company? Self-management can be excellent and cheap; it can also be three neighbours with a shoebox of receipts. Either way, match the fee to the service: cleaning frequency, gardening visits, a working intercom, a caretaker who actually appears.

6. Arrears and bad debt

Buried in the accounts is usually a line for unpaid service charges. If a meaningful chunk of the block is behind, everyone else quietly absorbs the shortfall. A block with a collections problem is a block with a maintenance problem not far behind.

7. Sundries, legal and professional, and other catch-alls

Small lines aren't automatically suspicious, but a catch-all that grows year on year with no explanation deserves a request for the breakdown. You're entitled to a summary of what your money was spent on, and "various" isn't one.

A shortfall is a future bill with your name on it

The single most useful thing you can do is ask for the building's forward maintenance plan and compare it with the reserve balance. If the plan lists a lift replacement in four years and the fund covers a fifth of it, you now know that your service charge will rise, or a large demand will arrive, or both. That's not necessarily a reason to walk — it's a reason to price it in, and to be honest with yourself about whether you can absorb it.

When to walk, and when to negotiate

Walk away when the accounts are unavailable after repeated requests, when a large section 20 bill is imminent and undisclosed, or when the reserve is empty and the building is visibly tired. Negotiate — on price, not on hope — when the numbers are simply worse than the listing implied.

The 2026 checklist before you offer

• Three years of service charge accounts, plus the current budget
• Reserve fund balance and the last three years of contributions
• Any section 20 notices in the last five years, and any planned
• Building safety documentation, including any remediation plan
• Ground rent terms, reviewed separately from the service charge
• Management agreement length and any commission the agent earns on insurance
• Written confirmation of all of the above from the solicitor

None of this is glamorous. But a flat you can afford to own is a different thing from a flat you can afford to buy, and the gap between those two is almost always sitting in a spreadsheet nobody wanted to open.