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Looking after service charge money

This content applies to England

Provisions for landlords who hold service charge money.

Where the landlord holds service charge funds collected on account of future costs, the landlord holds these on trust for the tenant who contributed them.[1] They may only be invested in investments that are suitable for trust funds, with the addition of bank deposit accounts.[2]

Provisions under the Commonhold and Leasehold Reform Act 2002 intended to increase the protection given to service charge money by requiring it to be held in a separate, designated account with a right for leaseholders to inspect the statements relating to the account were not brought into force.[3]

The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

[1] s.42 Landlord and Tenant Act 1987.

[2] Service Charge Contributions (Authorised Investments) Order 1988 SI 1988/1284.

[3] ss.42A and 42B Landlord and Tenant Act 1987, inserted by s.156 Commonhold and Leasehold Reform Act 2002.

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