Under section 158 of the 2002 Act landlords must also give leaseholders a statement of their rights in relation to administration charges as from 1 October 2007.

If a demand for service charge or administration charges is not accompanied by a summary of the rights and obligations of the leaseholders, a leaseholder has the right to withhold payment. In that case any provisions in the lease relating to non payment or late payment do not have effect so long as the landlord remains in breach of these obligations. All managing agents reading this should have taken the necessary action to ensure compliance. If not, ask your solicitor to advise you on the form that your demands take. As well as including the prescribed information it is sensible to review your demands from time to time to make sure that they comply with all statutory requirements, for example Section 47 of the Landlord and Tenant Act 1987.

Lengthy and detailed

The information that must be contained in the summary accompanying service charge demands has been prescribed by the Service Charges (Summary of Rights and Obligations, and Transitional Provision) (England) Regulations 2007. The summary must be headed ‘Service Charges – Summary of Tenants’ Rights and Obligations’ and must be typewritten or printed. The information to be contained is lengthy and detailed running to more than four A4-sized pages.

The prescribed information for administrative charges is similar and it is advisable to follow one summary with the other to accompany demands.

Parliament’s intention in ensuring that residential leaseholders are made fully aware of their rights in relation to these charges was no doubt admirable. However, the effect of doing so is an increase in requests for additional information and documents and, sadly, disputes. This in turn will mean more work for landlords, managing agents – and of course solicitors – but could backfire on leaseholders in the long run in the form of higher service and administration charges.®Å½