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Challenging service charges. Shabnam Ali-Khan. Statutory authority. Landlord and Tenant Act 1985 Landlord and Tenant Act 1987 Commonhold and Leasehold Reform Act 2002 Housing and Regeneration Act 2008. Crucial questions. Are the costs payable ? Are the costs reasonable ?

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Challenging service charges

Shabnam Ali-Khan


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Statutory authority

  • Landlord and Tenant Act 1985

  • Landlord and Tenant Act 1987

  • Commonhold and Leasehold Reform Act 2002

  • Housing and Regeneration Act 2008


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Crucial questions

  • Are the costs payable ?

  • Are the costs reasonable ?

  • LVT vs. County Court

  • Section 27A LTA 1985


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The Service Charge Demand

  • Sections 47 and 48 Landlord and Tenant Act 1987

  • Must be accompanied by the summary of rights and obligations, since October 2007

  • Administration charges must also be accompanied by similar summary


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Construction of Lease

  • Entitled to recover?

  • Improvements vs. repairs

  • Management costs

  • Legal costs

    • Section 20C LTA 1985

  • Sinking fund

  • Sweeper clause


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Machinery in the lease

  • Advance payments?

    • And when due?

  • Certification?

    • And by whom ?

  • Audited accounts required ?

  • Inspection of documents?

  • Sections 21 and 22 of Landlord and Tenant Act 1985, 2002 Act changes not coming into force. Superceded by Housing and Regeneration Act changes regarding statement of accounts.


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Historic service charges

  • Section 20B of the LTA 1985

    • ("City of Westminster vs. Hammond")

  • Limitation Act 1980: rent- 6 years, service charges- 12 years


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Statutory Consultation

  • Section 20 LTA 1985

    • (as amended by Section 151 of the CLRA 2002)

    • 3 stage process now.

    • Applicable to QLTA

    • LVT can determine


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Right to Buy

  • Section 125 notice

  • Payment options

  • Various Public Sector landlords will have payment options


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"Continental vs. White"

  • Historic neglect

  • Set-off?


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Quantum

  • Reasonably incurred?

  • Reasonable standard?

  • Advance payments reasonable?


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Decent Homes

  • National strategy for renewal of local authority housing designed to deal with disrepair issues

  • Certain requirements to be met by 2010:”All property owned and managed by the council must meet the Decent Homes Standard. To meet the standard, property must have reasonably modern facilities, be warm and weatherproof.” (DirectGov website)


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Decent Homes

  • Huge service charge demands for local authority lessees

  • Huge number of enquiries for LEASE

  • LVT applications

  • Limited if within reference period for RTB leases

  • Has to be recoverable under the lease


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Assistance for Decent Homes

  • Landlord may provide a loan

  • Mandatory and Discretionary Directions

  • Buy-back

  • Exchange sale scheme


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31 Worship Street

Tel: 020 7374 5380

Fax: 020 7374 5373

Email: [email protected]

Website: www.lease-advice.org


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