The Upper Tribunal has again reiterated the importance of getting your service charge demands right every time. In the recent decision of Beitov Properties Ltd v Elliston Martin [2012] UKUT 133 (LC), the Upper Tribunal rendered a number of service charge demands invalid on a purely technical construction of Section 47 of the Landlord and Tenant Act 1987.
Section 47(1) provides that "Where any written demand is given to a tenant of premises to which this part applies, the demand must contain the following information, namely (a) the name and address of the landlord, and (b) if that address is not in England and Wales, an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant".
Section 47(2) further provides that "Where any demand for a service charge does not contain the information required by s 47(1), the amount demanded is to be treated as not being due from the tenant at any time before the information is furnished to him".
In Beitov, the address shown on the demands for the purposes of section 47(1) was that of the landlord's managing agents, which is common in many of the demands that we see. From a practical perspective, many landlords leave their managing agents to deal with all aspects of property management, from day to day management to dealing with Court or LVT proceedings. It is also understandable that an individual landlord may be hesitant to disclose a private, residential address to their tenants.
The Upper Tribunal disagreed with this approach and, on a strict construction, held that the demands did not comply with section 47(1).
The Upper Tribunal reiterated that the address for the purposes of section 47(1) is "the place where the landlord is to be found". In the case of an individual, this would be his place of residence or the place from which he carries on business. In the case of a company it would be the company's registered office or the place from which it carries on business. If there is more than one place of residence or place from which business is carried on, then, depending on the facts, it may be that any one of such addresses will do.
The Beitov decision has significant implications, and reiterates the LVT's approach and the general theme of openness and transparency in the residential landlord and tenant arena.
If your demands do not correctly set out the landlord's name and address (in the UK), you should consider re-serving your demands now. In doing so, you will need to beware of any old charges which could fall foul of the 18-month rule and consider serving section 20b notices if necessary. Perhaps the most significant impact is where there is ongoing litigation, either in the Court or LVT, for service charge arrears, as it is uncertain whether the costs of such proceedings could be recovered from the defaulting lessee where the demands are invalid under section 47(1).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
