Summaries of rights and obligations – Service Charges – England

A note on the information that must accompany a service charge demand.

The provisions of the Commonhold and Leasehold Reform Act 2002, in Section 153, require that

“A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenant s of dwellings in relation to service charges”.

Right to withhold

• “A tenant may withhold payment of a service charge which has been demanded from him if (the requirement to provide the summary) is not complied with in relation to the demand.” “Where a tenant withholds a service charge under this section, any provisions of the lease in relation to non-payment or late payment of service charges do not have effect to the period for which he withholds it”

The content of the summary reflects the introduction of the First-tier Tribunal (Property Chamber) in substitution for the Leasehold Valuation Tribunal .

Service Charges – Summary of tenants’ rights and obligations

1. This summary, which briefly sets out your rights and obligations in relation to variable service charges, must by law accompany a demand for service charges. Unless a summary is sent to you with a demand, you may withhold the service charge. The summary does not give a full interpretation of the law and if you are in any doubt about your rights and obligations you should seek independent advice.
2. Your lease sets out your obligations to pay service charges to your landlord in addition to your rent. Service charge s are amounts payable for services, repairs, maintenance, improvements, insurance or the landlord’s costs of management, to the extent that the costs have been reasonably incurred.
3. You have the right to ask the First-tier Tribunal to determine whether you are liable to pay service charges for services, repairs, maintenance, improvements, insurance or management. You may make a request before or after you have paid the service charge. If the tribunal determines that the service charge is payable, the tribunal may also determine-
   • who should pay the service charge and who it should be paid to;
   • the amount;
   • the date it should be paid by; and
   • how it should be paid.

However, you do not have these rights where-

• a matter has been agreed or admitted by you;
• a matter has already been, or is to be, referred to arbitration or has been determined by arbitration and you agreed to go to arbitration after the disagreement about the service charge or costs arose; or
• a matter has been decided by a court.

• proposes works on a building or any other premises that will cost you or any other tenant more than £250, or
• proposes to enter into an agreement for works or services which will last for more than 12 months and will cost you or any other tenant more than £100 in any 12 month accounting period.
• Your contribution will be limited to these amounts unless your landlord has properly consulted on the proposed works or agreement or the First-tier Tribunal has agreed that consultation is not required.

• cover the last 12 month period used for making up the accounts relating to the service charge ending no later than the date of your request, where the accounts are made up for 12 month periods; or
• cover the 12 month period ending with the date of your request, where the accounts are not made up for 12 month periods.

The summary must be given to you within 1 month of your request or 6 months of the end of the period to which the summary relates whichever is the later.