Service charge and 18 month rule
When it comes to issuing service charge demands, landlords must stick to the letter of leases or risk recovering nothing at all – even if that results in tenants receiving an unwarranted windfall.
In the case of Skelton v DBS Homes (Kings Hill) Limited [2017], the Court of Appeal made that point in relieving a residential tenant of liability to pay service charges over a four-year period.
Under the terms of the relevant lease, service charge demands were required to be accompanied by estimates of projected expenditure over the next year. No such estimates were included for four years. That oversight was later corrected, but the tenant argued that was not liable to pay the charges due to the landlord’s failure to comply with the terms of the lease.
The tenant’s arguments did not persuade the First-tier or Upper Tribunals. However, in allowing his appeal, the Court cited Section 20B of the Landlord and Tenant Act 1985. That provision, often called the 18-month rule, requires that costs incurred by landlords more than 18 months prior to the service of demands for payment are not recoverable from tenants.
The Court found that the 18-month rule applies equally to demands for payment on account as to demands in respect of costs that have already been incurred. The purpose of the rule was to ensure that tenants receive proper demands for service charges within 18 months of the relevant costs being incurred.
That had not happened in the current case because the demands had not become valid until the estimates were also served on the tenant. If the outcome of the case resulted in the tenant receiving a windfall, that was a consequence of the landlord’s default.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
British Architectural Sculpture 1851-1951
A rich heritage of decorative and figurative sculpture. Book review.
A programme to tackle the lack of diversity.
Independent Building Control review panel
Five members of the newly established, Grenfell Tower Inquiry recommended, panel appointed.
ECA progress on Welsh Recharging Electrical Skills Charter
Working hard to make progress on the ‘asks’ of the Recharging Electrical Skills Charter at the Senedd in Wales.
A brief history from 1890s to 2020s.
CIOB and CORBON combine forces
To elevate professional standards in Nigeria’s construction industry.
Amendment to the GB Energy Bill welcomed by ECA
Move prevents nationally-owned energy company from investing in solar panels produced by modern slavery.
Gregor Harvie argues that AI is state-sanctioned theft of IP.
Heat pumps, vehicle chargers and heating appliances must be sold with smart functionality.
Experimental AI housing target help for councils
Experimental AI could help councils meet housing targets by digitising records.
New-style degrees set for reformed ARB accreditation
Following the ARB Tomorrow's Architects competency outcomes for Architects.
BSRIA Occupant Wellbeing survey BOW
Occupant satisfaction and wellbeing tool inc. physical environment, indoor facilities, functionality and accessibility.
Preserving, waterproofing and decorating buildings.