It is common for service charges to be paid ‘on account’ of the annual cost, based on estimates, and a final account to be made up some time after the year end, based on the actual costs incurred. However, not all landlords are diligent about preparing the final service charge accounts.
In a recent case, a tenant became frustrated with the landlord’s delay after the 2007 and 2008 service charge accounts had not been prepared as of June 2009. The tenant went to the Upper Tribunal to ascertain what action it could take to rectify the position. The Tribunal ruled that the landlord did have an implied obligation to calculate the service charges within a reasonable period. However, the rights of the tenant were limited to either obtaining an order for the accounts to be prepared or applying to the Leasehold Valuation Tribunal to set a service charge if the service charge accounts were unreasonably delayed.