Residential service charge demands must comply with the terms of the lease and with a number of statutory requirements. If a demand is non-compliant, the service charge may not be payable by the lessee until the landlord fulfils his contractual and statutory obligations. In some cases, it may not be payable at all.
This checklist does not pretend to cover all of the points which will affect the enforceability of a service charge demand, but it is a starting point for ensuring that the landlord is getting the basics right.
Where a requirement is enshrined in statute, I have given the number of the relevant section, the name of the Act and any Regulations which underpin it. For reasonably current versions of legislation in the United Kingdom, try www.legislation.gov.uk.
Does the lease allow the landlord to make the demand? For example, if it is an advance demand, is it being demanded at the time provided for?
If it is a one-off demand for major works, is the landlord entitled to raise it or is he/she restricted to making one advance and one balancing demand per year?
Does it give an address for the landlord in England or Wales where notices can be served?
Section 47, Landlord and Tenant Act 1987.
Does it give the landlord’s address, even if not in England or Wales?
Section 47, Landlord and Tenant Act 1987.
Is it accompanied by a summary of the tenant’s rights and obligations?
Section 21B, Landlord and Tenant Act 1985.
Service Charges (Summary of Rights and Obligations and Transitional Provision) (England) Regulations 2007/1257.
Service Charges (Summary of Rights and Obligations and Transitional Provisions) (Wales) Regulations 2007/3160.
Has it been served within eighteen months of the costs being incurred?
Section 20B(1), Landlord and Tenant Act 1985.
If not, has the landlord, within eighteen months of incurring the costs, notified the tenant that those costs have been incurred and that the tenant will subsequently be required under the terms of the lease to contribute to them by way of service charge?
Section 20B(2), Landlord and Tenant Act 1985.
This article was written by Amanda Gourlay a barrister called to the Bar of England and Wales in 2004. Amanda is a member of Tanfield Chambers, a set of barristers’ chambers located in central London. Find out more about Amanda and follow her blog.
