Service charge and 18 month rule
When it comes to issuing service charge demands, landlords must stick to the letter of leases or risk recovering nothing at all – even if that results in tenants receiving an unwarranted windfall.
In the case of Skelton v DBS Homes (Kings Hill) Limited [2017], the Court of Appeal made that point in relieving a residential tenant of liability to pay service charges over a four-year period.
Under the terms of the relevant lease, service charge demands were required to be accompanied by estimates of projected expenditure over the next year. No such estimates were included for four years. That oversight was later corrected, but the tenant argued that was not liable to pay the charges due to the landlord’s failure to comply with the terms of the lease.
The tenant’s arguments did not persuade the First-tier or Upper Tribunals. However, in allowing his appeal, the Court cited Section 20B of the Landlord and Tenant Act 1985. That provision, often called the 18-month rule, requires that costs incurred by landlords more than 18 months prior to the service of demands for payment are not recoverable from tenants.
The Court found that the 18-month rule applies equally to demands for payment on account as to demands in respect of costs that have already been incurred. The purpose of the rule was to ensure that tenants receive proper demands for service charges within 18 months of the relevant costs being incurred.
That had not happened in the current case because the demands had not become valid until the estimates were also served on the tenant. If the outcome of the case resulted in the tenant receiving a windfall, that was a consequence of the landlord’s default.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Plumbing and heating for sustainability in new properties
Technical Engineer runs through changes in regulations, innovations in materials, and product systems.
Awareness of the Carbon Border Adjustment Mechanism
What CBAM is and what to do about it.
The new towns and strategic environmental assessments
12 locations of the New Towns Taskforce reduced to 7 within the new towns draft programme and open consultation.
Buildings that changed the future of architecture. Book review.
The Sustainability Pathfinder© Handbook
Built environment agency launches free Pathfinder© tool to help businesses progress sustainability strategies.
Government outcome to the late payment consultation, ECA reacts.
IHBC 2025 Gus Astley Student Award winners
Work on the role of hewing in UK historic conservation a win for Jack Parker of Oxford Brookes University.
Future Homes Building Standards and plug-in solar
Parts F and L amendments, the availability of solar panels and industry responses.
How later living housing can help solve the housing crisis
Unlocking homes, unlocking lives.
Preparing safety case reports for HRBs under the BSA
A new practical guide to preparing structural inputs for safety cases and safety case reports published by IStructE.
Male construction workers and prostate cancer
CIOB and Prostate Cancer UK encourage awareness of prostate cancer risks, and what to do about it.
The changed R&D tax landscape for Architects
Specialist gives a recap on tax changes for Research and Development, via the ACA newsletter.
Structured product data as a competitive advantage
NBS explain why accessible product data that works across digital systems is key.
Welsh retrofit workforce assessment
Welsh Government report confirms Wales faces major electrical skills shortage, warns ECA.
A now architectural practice looks back at its concept project for a sustainable oceanic settlement 25 years on.
Copyright and Artificial Intelligence
Government report and back track on copyright opt out for AI training but no clear preferred alternative as yet.