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Service charge demands

This content applies to England

The requirements that apply in order for a service charge demand to be lawfully made.

Name and address

A landlord must provide the tenant with a name and address for the landlord and, in addition if that address is not in England or Wales, an address in England or Wales where the tenant can serve any notices (for example of repairs problems).[1] If the name and address is not on the demand for payment, that money does not have to be paid until it has been provided. Although the tenant will eventually have to pay, reminding the landlord of this duty can be a useful delaying tactic in some cases.

Where the demand notice contains one name and address only, it may not be necessary to specify that the details are those of the landlord.[2] However, where the demand contains details of multiple parties (e.g. more than one company), it should specify which of them is the landlord.[3]

Notice of tenant's rights

The landlord must provide a notice (in statutory form) of the tenant's rights with the demand, failing which the money does not have to be paid until a demand with the notice has been given.[4] Similar provisions, but with a different notice, apply to demands for administration charges.[5]

Estimates

Where qualifying works are to be completed and will be paid for through the service charge, the landlord should provide the tenant with copies of all estimates obtained for the works. A landlord providing his own summary of the estimates is not sufficient.[6]

Other requirements

A demand can be valid even if it lacks absolute clarity or contains minor errors, as long as the tenant suffers no prejudice as a result of the errors.[7]

Compliance with the lease

In order to be valid and render the tenant liable for the payment of the service charges, the landlord's demand must satisfy both the requirements of the Landlord and Tenant Act 1985 and of the lease.[8]

For example, where a lease provides that the amount of service charges payable by the tenant is to be certified by a surveyor or accountant, the production of such a certificate is usually (but not always) a precondition to the recovery of the service charges. In one case, the Upper Tribunal held service charge demands to be invalid because the charges were not certified by a surveyor as required by the lease and, accordingly, the tenant had not been rendered liable to pay the service charges.[9] However, in another case, the Tribunal held that because the tenant had separate remedies of damages and specific performance in respect of the breaches of the lease, the fact that the landlord did not fulfil all the requirements of the lease did not invalidate the demand of servic c:harges so they were payable.[10]

Service of the demand

A service charge demand must be served in accordance with the lease. Most leases incorporate the terms of section 196 of the Law of Property Act 1925, which governs the service of notices. Under this Act, a notice is lawfully served when it is:

  • left at the last known address of the leaseholder, or affixed to that property
  • sent by registered post addressed to the leaseholder at their last known address and that letter is not returned as undelivered.

Where service is disputed, the question for the court is not whether the leaseholder has received the demand, but whether the landlord can show that on the balance of probabilities the demand was delivered in accordance with the lease.[11]

Wales

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

[1] s.47 Landlord and Tenant Act 1987; Beitov Properties Ltd v Martin subnom Flat 22 Cornish Court, Bridlington Road, London  N97RS [2012] UKUT 133 (LC).

[2] Westlake Estates Ltd v Yinusa (Service Charges) [2019] UKUT 241 (LC).

[3] Terhas Tedla v Camaret Court Residents Association Ltd [2015] UKUT 221 (LC).

[4] s.21B Landlord and Tenant Act 1985, as inserted by s.153 Commonhold and Leasehold Reform Act 2002.

[5] para 4(2), Sch. 11 Commonhold and Leasehold Reform Act 2002; Administration Charges (Summary of Rights and Obligations) (England) Regulations 2007 SI 2007/1258.

[6] Islington LBC v Abdel-Malek [2007] EWLands LRX 90 2006.

[7] Mannai Investment Co Ltd v Eagle Star Assurance [1997] UKHL 19; Newham LBC v Hannan and others [2011] UKUT 406 (LC).

[8] Brent LBC v Shulem B Association Ltd [2011] EWHC 1663 (Ch).

[9] Akorita v Marina Heights (St Leonards) Ltd [2011] UKUT 255 (LC).

[10] Elysian Fields Management Company Ltd v Nixon & Anor [2015] UKUT 427 (LC).

[11] 38/41 CHG Residents Company Limited v Hyslop (LANDLORD AND TENANT – SERVICE CHARGES) (2020) UKUT 21 (LC).

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