Residential—statutory limitations on recovery of service charges and administration charges
Residential—statutory limitations on recovery of service charges and administration charges

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Residential—statutory limitations on recovery of service charges and administration charges
  • What is a service charge?
  • Must be reasonable
  • Payments on account
  • Determination
  • Cannot contract out
  • Requirement to consult
  • Demands and accounting
  • Timely demands
  • Excessive service charges
  • more

Statute limits the amount that may be recovered from tenants of dwellings by way either of service or administration charges. In both cases the landlord may recover no more than is ‘reasonable’, notwithstanding any contrary provision in the lease. The landlord’s ability to forfeit the lease for non-payment is also subject to statutory control.

Sections 18–25 of the Landlord and Tenant Act 1985 (LTA 1985) (sections 18–25) cover limitations to and reasonableness of service charges, requests for summary of relevant costs, effects of change of landlord and assignment on request as well as providing for an offence for failure to comply. The provisions apply to all dwellings and cover all residential leases, except where LTA 1985, s 26 (section 26) applies. Section 26 provides for an exception in the case of tenants of certain public authorities.

Sections 18–25 do not apply to a service charge payable by a tenant of:

  1. a local authority

  2. a National park authority, or

  3. a new town corporation

unless the tenancy is a long tenancy, in which case sections 18–24 apply but LTA 1985, s 25 (offence of failure to comply) does not apply.

A tenancy is considered a long tenancy if it is:

  1. a tenancy granted for a term certain exceeding 21 years, whether or not it is (or may become) terminable before the end of that term by