The 18 Month Rule

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The 18 Month Rule

It is vital to remember that demands for service charge payments must be made within 18 months of those costs having been incurred (Section 20B(1) of the Landlord and Tenant Act 1985).

Alternatively, the landlord must notify the tenant in writing within 18 months that the cost had been incurred and that the tenant will subsequently be required under the terms of the lease to contribute to the cost by the payment of a service charge (Section 20 B (2) of the Landlord and Tenant Act 1985).

Failure by the landlord to demand or serve notice under section 20 B (2) within 18 months of the expenditure being incurred, does not necessarily mean that the landlord is not entitled to recover all of the expenditure via the service charge where:

  1. Payment of service charge was made on account by interim payments
  2. The actual expenditure did not exceed the service charge payments made on account
  3. No request by the landlord to the tenant was made for any further payment

[Gilje v Charlegrove Securities Ltd. [No 2][2003]]

 

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