Back
Get in Touch Menu

Service charge recovery delay

09 July 2007

Services charges are a common source of contention between landlords and tenants of multi-occupied buildings.

They are usually the subjects of much negotiation when leases are entered into, and tenants often request concessions from landlords, such as a financial cap on their service charge liability.

Landlords need to keep in mind that they have granted such concessions and make sure that they do not inadvertently disadvantage the tenant. This was underlined in a recent case where the landlord knew the roof needed repairing and had arranged to do the work in 2003. This was during the period that the tenant benefited from a service charge cap. The repairs were delayed in order to incorporate some extra work and in the meantime, the tenant’s service charge cap expired.

The appeal court ruled that the delay in carrying out the roof repairs was not necessary or acceptable, particularly since it prevented the tenant from benefiting from his service charge cap. The net effect of the court’s decision was that the landlord was unable to recover the additional costs of carrying out the roof repairs over and above the tenant’s service charge cap.

The case shows that landlords need to actively manage their multi-let buildings and be aware of any financial caps that would affect service charge recovery. Where they know that repairs are required they cannot delay them just to avoid a service charge cap.

Tenants should note that, although general service charge caps are valuable concessions, they are usually limited in time. They need to notify the landlord in good time before their cap expires, of any major repairs which need doing as part of the service charge. It is also worth negotiating a specific cap that is not time limited in respect of any major items that the tenant knows will need to be carried out during the lease.

As always, if you need commercial and pragmatic legal advice, we’re here to help so please get in touch.

Contact us

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Contact
Nigel Whittaker BA (Hons)
Partner
View profile
Related services
Share this article
Resources to help

Related articles

Willans plays role in Winchcombe Arts and Community Hub

Real estate

Our real estate team has advised a local charity on its purchase of Winchcombe Methodist Church as part of their plan to open a brand-new arts, youth and community hub.…

Willans
Solicitors

Charity land: A widening of the pool

Real estate

We previously reported on the new Charities Act 2022. The first wave of provisions in relation to charity land are now in force, with more expected to be in force…

Charlotte Cowdell BA (Hons), LLB
Associate, solicitor

RAAC: How the concrete crumbles

Real estate

The discovery of failing reinforced autoclaved aerated concrete (RAAC) in schools just before the beginning of term certainly caught the attention of the public and the media. The problem of…

Emma Thompson LLB (Hons)
Associate, solicitor
Contact us