Service charges: An important lesson for landlords

08 Feb 2013

With the complex statutory overlay that governs service charges in respect of residential properties, it can be easy to overlook a fundamental point: are the costs of the services provided recoverable under the terms of the lease? If not, the tenant will not be contractually liable for expenditure by the landlord.

This salutary lesson was learnt by the landlord in LVT case LON/00AH/LSC/2012/0344. Here the tenants successfully challenged whether the invoice for major works was payable under s27A of the LTA 1985 on the basis that the lease provided for an interim payment on account to be made in each year but did not make for provision for a balancing charge.

The Tribunal agreed that the leases were defective and, as such, the costs of the major works were not contractually due from the tenants as they had already received (and paid) an interim demand for the relevant year. Had the landlord wished to recover the cost of the major works, it should have included the anticipated costs (which were known at the time) in the interim demand.

The Tribunal also held that the s20 consultation procedure had not been followed and that, even if the demands had been legally valid, the tenants would have only been required to pay the statutory maximum of £250 each in respect of the major works.

Of course, the terms of any lease should be reviewed before grant or the purchase of the freehold reversion, but this case shows that it is equally important for a landlord to review the service charge provisions before embarking on a programme of major works.


This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.


Please note that we do not give legal advice on individual cases which may relate to this content other than by way of formal instruction of a member of Gatehouse Chambers. However, if you have any other queries about this content please contact: