There are a number of contractual and statutory restrictions on the recovery of service charges. The statutory restrictions include section 20B of the Landlord and Tenant Act 1985. S20B of the Landlord and Tenant Act 1985 sets an important time limit on the recovery of service charges; it is often referred to as the 18 month rule.
Synopsis
A decision of the Lands Tribunal in late 2010 has clarified when the need for a S20B (2) notice arises when there is a deficit at the year end. Holding & Management (Solitaire) Limited and Miss Stephanie Sherwin. UT Neutral citation number: [2010] UKUT 412 (LC) LT Case Number: LRX/67/2009.
The outcome of this Lands Tribunal case is that where payments on account (sometimes called interim payments) of service charge are received, then costs are incurred that might require a S20B notice from the time in the financial year when the total of advance payments have been committed. For example a block of 10 flats each paying £1000 pa in advance payments, then the countdown for the 18 month rule would start when the total committed expenditure for the financial year exceeded £10,000.
Covering Topics
- Overview
- S20B States in Two Sub Sections
- When are costs incurred
- Examples When S20B (2) Notices May Be Required
- Interpretation of S20B and Deficits
- Summary of Timing for S20B Notice
- The Content of A S20B Notice
- After The S20B Notice
