Service charge accounts - does the lease override the law re timescale?

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    #16
    Also the requirements are on the landlord, not the agent. The agent is only involved because the landlord typically delegates the responsibility to the agent.

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      #17
      Some people seem to be confusing the service charge accounts with the s21 notice for a summary of relevant costs.

      The RICS code of practice is 7.12 states that “service charge accounts should be prepared … within six months of the end of the financial period, or any shorter timescales required by the lease”.

      It also states that a ”leaseholder can request that you provide a summary of relevant costs incurred during the last accounting year … You must comply with the request within one month of the request or within six months after the end of the accounting period, whichever is later”. It goes on to set out the information which should be contained within the summary, which is not normally contained within the service charge accounts.

      Section 7.13 of the code of practice states that “service charge accounts should be subject to an annual examination by an independent accountant unless the costs cannot be recovered”

      As leaseholder64 states the difference between “should” and “must” are significant.

      Tech 03/11 para 3.3.1 states that s21 reports must be made by a registered auditor. So the s21 report may need to be completed by a different accountant to the one who certified the service charge accounts.

      In this case, we are told that the lease states that the accounts should be provided “as soon as practicable” and the leaseholder should request them on that basis. Unfortunately, the term is imprecise and whilst I think that the accounts could be supplied much earlier, I agree that a Tribunal is likely to take the view that six months is a reasonable period.

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