Last month the Leasehold Valuation Tribunal instructed one of the UK's most significant
home management companies, Peverel Property Management Company ("Peverel"), to repay lessees in excess of 100,000 in service costs.
Section 20B of the Landlord and Tenant Act 1985 ("the Act") introduced an essential time frame for land lords. It requires in which needs for payment of service fees can't consist of costs sustained more than 18 months prior to service of the demands. Any expenses demanded after 18 months can't be recovered through lessees unless lessees had been advised in writing inside the 18 months from the expenditures which have been received.
It had been found that Peverel failed to request service charges within 18 months of them becoming expected.
It is necessary for home landlords or their property managers to obtain service charge demands properly otherwise they might be unable to retrieve charges or may need to return all or part of fees currently paid for.
Another essential provision within the Act is the necessity that every service cost demand include a summary of lessees' rights and responsibilities with regards to service fees. Any demand not including such a overview is not valid and lessees could in that case rightly withhold payment of fees.
One provision which is usually overlooked is a service of a section 48 notice. Leases usually have a notice of your landlord's address for service pursuant to section forty eight of the Landlord and Tenant Act 1987. In case the lease doesn't include an address for service with no section forty eight notice may be served on the lessee no rent or service costs will be due. Nevertheless, when a notice is served any rent or service charges previously demanded will be due retrospectively.
As well as the above statutory conditions, landlords should also have regard for procedures in individual leases that might recommend how and when service charge demands should be served on lessees. This applies equally to service costs in respect of business premises.
Landlords get away by their failing to adhere to the appropriate legal provisions simply because lessees tend not to possess the knowledge and time to challlenge these failures. However, as the above case shows, ignorance may well show to be very expensive.
Walter Kramer is a member of IBB's Real Estate Dispute Resolution Team that constantly advises landlords, tenants and managing agents on the recovery of service costs in respect of business, residential as well as mixed use premises.