D13: S20B of The Landlord & Tenant Act 1985 - 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

• Key Point to Note 
• Overview
• S20B States in Two Sub Sections
• 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