Service charges- residential tenancies

United Kingdom

Residential tenants will lawfully be entitled to withhold payment of service charges unless a summary of their rights and obligations accompanies the demand.

New rules requiring a summary of tenants’ rights and obligations rights to accompany service charge demands will apply from 1 October 2007. The rules apply to residential long leaseholders only. Unless the summary accompanies a demand a tenant will be lawfully entitled to withhold service charge payments. Further the penalties relating to non-payment of service charges in the lease such as interest/forfeiture will not apply.

The summary can be found in the Service Charges (Summary of Rights and Obligations, and Transitional Provision) (England) Regulations 2007. The summary must be printed in a size 10 font and must be included with all demands.

By way of example the summary covers:

· the tenant’s right to ask the Leasehold Valuation Tribunal to determine the tenant’s liability to pay service charges;

· the tenant’s right to request a written summary of the costs which make up the service charges; and

· the tenant’s right to inspect the service charge accounts and supporting receipts.