Service charge invoices issued by landlord nearly 3 years late.

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  • Service charge invoices issued by landlord nearly 3 years late.

    We have a 20 year LTA 1954 commercial lease for a basement in a mixed use building comprising retail units, basement storage unit and multiple residential units which are rented by the landlord.
    The lease requires an service charge to be paid quarterly based on our fair proportion of the service charge costs of the common area.
    • At the end of the service charge year the lease states that the
      Landlord shall prepare and send to the Tenant a certificate showing the Service Costs and the Service Charge for that Service Charge Year. The certificate shall be in accordance with the service charge accounts prepared by the independent accountants of the Landlord. If any cost is omitted from the calculation of the Service Charge in any Service Charge Year, the Landlord shall be entitled to include it in the estimate and certificate of the Service Charge in any following Service Charge Year. Otherwise, and except in the case of manifest error, the Service Charge certificate shall be conclusive as to all matters of fact to which it refers
    • The lease commenced in late 2015 and up until April 2019 we have not received any certificate, statement, invoice or letter regarding the service charge. But this week we have received invoices for the service charge dating back to 2016, 2017 and 2018.​​​​​​​
    • The invoices:
      • include items not stated in the lease under the Services to be charged.
      • do not show how the charges are apportioned
    Where do we stand with these service charge invoices?

  • Macromia
    Originally posted by leaseholder64 View Post
    Even residential leaseholders can be billed late, as long as they were made aware of the expenditure within 18 months.
    They do need to be made aware of the amount that the freeholder intends to recover as service charges before 18 months have passed though.
    Commercial leaseholders don't automatically have this protection and can potentially be billed for charges from several years earlier and be expected to find the money to pay straight away.

    Leave a comment:

  • leaseholder64
    Even residential leaseholders can be billed late, as long as they were made aware of the expenditure within 18 months.

    Leave a comment:

  • Macromia
    Unfortunately, commercial tenants don't have the same protections as residential tenants and I don't think that the protection afforded by L&T Act 1985, section 20B applies.

    For commercial tenants it will likely come down to the precise wording of the lease, and this may allow for late demands (the lease for the convenience store under my flat does).
    The text that you quote does not say that the service charge demand has to be provided within any particular time limit.

    As for the method of proportionment used, have you asked how this was determined?
    The freeholder/landlord will be able to decide how to split the service charges if your lease only states "a reasonable proportion", but they will need to be able to justify how the method they choose, and there is no good reason for them not to tell you how they apportioned the charges.

    Leave a comment:

  • desamax
    The below applies on residential properties, I would seek advise and see if this could apply to you. Someone more clued up on here might know? best of luck to you.

    ‘Under Section 20B of the Landlord and Tenant Act 1985, a landlord has 18 months within which to notify you of service charge costs being incurred or demand payment from you. If they fail to either notify you or demand payment within 18 months they will not be able to recover the charges from you.’

    Leave a comment:

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