A landlord cannot recover service charges incurred more than 18 months before they are demanded, unless a section 20B notice is served.
The case of Brent London Borough Council v Shulem B Association Ltd decided that the section 20B notice must refer to costs already incurred and not costs to be incurred. However this left the question open as to when costs were incurred; when the liability arose, or when the invoice was rendered, or when payment was made.
The recent case of OM Property Management Limited v Burr allowed the Court of Appeal to decide when is a cost "incurred" in order to determine whether the landlord may recover it against the tenant.
This case concerned the supply of gas to heat a communal swimming pool. The tenant was billed for the gas after it had been supplied although before the gas supplier had rendered the bill. The Court of Appeal decided that the landlord’s costs were incurred when it was invoiced and not before. Therefore, although the landlord may be liable for the costs, they cannot seek to recover these from the tenant until the costs have been demanded from the supplier.
At Benchmark Solicitors LLP we can assist in all landlord and tenant matters including matters concerning the recovery of service charges and major works charges.
Paul Rogers – Solicitor, 3rd September 2013