Q&As

Where a long residential lease provides that at the end of the accounting year a certificate of any deficit or surplus must be served on the lessee confirming the figure, is this a separate document from the end of year accounts?

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Produced in partnership with Desmond Kilcoyne
Published on LexisPSL on 22/06/2020

The following Property Q&A produced in partnership with Desmond Kilcoyne provides comprehensive and up to date legal information covering:

  • Where a long residential lease provides that at the end of the accounting year a certificate of any deficit or surplus must be served on the lessee confirming the figure, is this a separate document from the end of year accounts?

Where a long residential lease provides that at the end of the accounting year a certificate of any deficit or surplus must be served on the lessee confirming the figure, is this a separate document from the end of year accounts?

Service charge clauses of residential leases commonly contain a provision requiring an accountant, surveyor or managing agent to provide a certificate relating to the costs which have been incurred by the landlord or management company during the service charge year. However, despite significant case law about various aspects of ‘certification’, there is not a lot of material about the basics of what a certificate is.

The requirement for a certificate usually arises in one of two contexts. The lease may (less usually) require some form of certification in relation to the estimated expenditure in the forthcoming service charge year; which will then form the basis of an in advance demand. Further or alternatively, and more commonly, a certificate may be required in relation to the end of year service charge accounts.

In the latter context (which is relevant to this Q&A), the process of certification appears to have two aspects. First, the certifier is performing a function, ie identifying and/or calculating the costs which were actually incurred during the relevant year. For this purpose, a certain amount of care, skill and expertise may need to be

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