Notices and dates

[page404]

According to my lease, the freeholder is entitled to make a demand for service charges and ground rent once a year on a specified date.


In 2007 and 2008 I received Notices in which the date on the Notice was 1 day before the date specified in the lease and gave the due date as being the date specified in the lease. ie. one day's notice. The accompanying notes said that the date "must not be either less than 30 days or more than 60 days after the day on which the notice is given or before than on which the leaseholder would have been liable to make the payment in accordance with the lease.". Does this mean the Notices are invalid? If so, what does this mean for the payments I have made? Can I claim the money back or can the freeholder just reissue the Notice.

I also received a Notice in 2006 which was issued more than 3 months after the date in the lease. Is this valid?

Does this apply to ground rent only or service charges included in the Notice?

[jeffrey]

Stop. You seem to be confusing two different items.
The wording quoted relates to s.166 of the Commonhold and Leasehold Reform Act 2002. This applies only to ground rent, not service charge!
A. L must comply strictly with s.166 so far as concerns rent.
B. This cannot be demanded before (according to the lease) it falls due, but of course can be demanded at any later date.
C. The date which the Notice fixes for payment cannot be less than 30 (nor more than 60) days from the Notice date.

[Poppy]

Something’s wrong. A lease permits that your freeholder to demand service charge and ground rent once a year on a specific date? You’ve surely misunderstood. Please quote the clause you are referring to.

[jeffrey]

Something’s wrong. A lease permits that your freeholder to demand service charge and ground rent once a year on a specific date? You’ve surely misunderstood. Please quote the clause you are referring to.
What's the problem with that? It's entirely possible (although uncommon) for ground rent and service charge to be payable annually.

[Poppy]

I am surprised to hear that the freeholder can only issue service charge and ground rent demands once a year on a specific date. That’s all.

[jeffrey]

True, but perhaps there's confusion between:
a. the annual setting of a service charge figure; as opposed to
b. the monthly or quarterly obligation for lessees to pay it.

[andydd]

My ground rent is only payable once annually and although there is no specific provision relating to service charges, I am only billed once annually and I didnt think this situation was uncommon.

[Gordon999]

The wording in many leases is written to say "ground rent is due whether demanded or NOT."

Consequently some unscrupulous managing agents would deliberately omit to issue a demand for a 5 pound or 10 pound annual ground rent and later try to collect a 250 pds recovery charge for ground rent arrears by threatening forfeiture to tenant and sometimes to mortgage lender.

So now the law has been changed to require a formal demand to collect ground rent.

[page404]

"paying therefor during the said term in advance the yearly rent reserved by the First Schedule hereto the first of such payments (or a proportionate part thereof) being made on the execution hereof and subsequent payments on the [day] of [month] in each year and in manner aforesaid by way of additional rent such a sum as equals xxx per cent of the total service cost hereinafter defined (such additional rent being hereinafter called "the service charge").

So am I right in thinking that the 2007 and 2008 Notices were invalid because the due date (which is the date specified in the Lease) was just one day after the date of the Notice?

The invoice in 2006 which was issued several months after the date specified in the Lease did not mention a specific due date but just stated a service charge was payable "as per lease". Was this sufficient to comply?

Again, what does this mean for the payments I have made?

Can I claim it back or can the freeholder simply reissue the correct Notices?

[Gordon999]

When you bought your flat, you entered into a lease agreeing to pay the annual ground rent, so you cannot escape paying. If it is correctly demanded, then you just pay it in the required time period.

If the leaseholders have any problems with the freeholder or its agent , then set set up a RTM to take over the administration of the service charge account.

[jeffrey]

"paying therefor during the said term in advance the yearly rent reserved by the First Schedule hereto the first of such payments (or a proportionate part thereof) being made on the execution hereof and subsequent payments on the [day] of [month] in each year and in manner aforesaid by way of additional rent such a sum as equals xxx per cent of the total service cost hereinafter defined (such additional rent being hereinafter called "the service charge").

So am I right in thinking that the 2007 and 2008 Notices were invalid because the due date (which is the date specified in the Lease) was just one day after the date of the Notice?

The invoice in 2006 which was issued several months after the date specified in the Lease did not mention a specific due date but just stated a service charge was payable "as per lease". Was this sufficient to comply?

Again, what does this mean for the payments I have made?

Can I claim it back or can the freeholder simply reissue the correct Notices?
Unless and until F serves a s.166-compliant Notice, he cannot treat any rent as being due. The 2002 Act says so.
Once F does serve, all rent (inc. the rent for the period of non-service) is resurrected and due.
Take legal advice re your particular circumstances; do not rely merely on LZ members' posts..

[page404]

Thank you for your replies.

Am I right in thinking that the dates in these Notices make them non-compliant?

The 2006 one did not say it was a Notice of Rent, it merely stated 'INVOICE' at the top and it was a demand for 'service charges' not ground rent.

[jeffrey]

Again: s.166 is mandatory (but relates only to ground rent, not service charge). A non-compliant demand is not a valid demand at all.

[andydd]

What date did s166 come into effect ?. (I know the equivalent law regarding service charges was Oct 2007).

Andy

[page404]

Can the freeholder still recover the service charges from the 'Invoice' in 2006 as it has only just been brought up as (allegedly) still owing. No reference has been made to it in over 2.5 years. Isn't there an 18 month limit on recovering service charges?

[jeffrey]

What date did s166 come into effect ?. (I know the equivalent law regarding service charges was Oct 2007).
In England: 28 Feb. 2005.
In Wales: 31 May 2005.

[page404]

the equivalent law regarding service charges was Oct 2007.

Andy

Which law is this?

[andydd]

Which law is this?

Commonhold & Reform Act 2002 (Which made changes to L & T Act 1985). A very useful bit of legislation.

Notice to accompany demands for service charges .After section 21A of the 1985 Act (inserted by section 152) insert—
“21B
Notice to accompany demands for service charges .(1)
A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges. .
(2)
The Secretary of State may make regulations prescribing requirements as to the form and content of such summaries of rights and obligations. .
(3)
A tenant may withhold payment of a service charge which has been demanded from him if subsection (1) is not complied with in relation to the demand. .
(4)
Where a tenant withholds a service charge under this section, any provisions of the lease relating to non-payment or late payment of service charges do not have effect in relation to the period for which he so withholds it. .
(5)
Regulations under subsection (2) may make different provision for different purposes. .
(6)
Regulations under subsection (2) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”

..and yes..By virtue of s.20B Landlord and Tenant Act 1985, a landlord must demand service charges within 18 months of incurring them or they are never recoverable. (Need to check when this came into effect though!)

Andy

[jeffrey]

Section 20B was inserted into LTA 1985 by LTA 1987. I think that its commencement date was 1 February 1991.
See http://www.statutelaw.gov.uk/content.aspx?LegType=Act+(UK+Public+General)&title=landlord&Year=1985&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&TYPE=QS&PageNumber=1&NavFrom=0&activeTextDocId=2177246&parentActiveTextDocId=2177215&hideCommentary=0&showProsp=0&suppressWarning=0&showAllAttributes=1#attrib.