16 June 2022 by

Landlords – beware of requests for further information

Tenants have statutory rights to information relating to the service charge for their property.  Failure by a landlord to provide this information can be a criminal offence.

Section 21 of the Landlord and Tenant Act 1985

Tenants have statutory rights to information relating to the service charge:

  1. To seek a summary of the service charge account from the landlord(21 of the Landlord and Tenant Act 1985); and
  2. To inspect accounts, receipts and other documents relating to the service charge summary and to take copies of these(22 of the Landlord and Tenant Act 1985).

A tenant or a secretary of a Right to Manage Company may request the landlord to supply a written summary of the relevant costs incurred in the last accounting period or, if the accounts are not made up for a 12-month period, the 12 months before the tenant’s request.

A s.21 request must be made in writing and can be served on the landlord or any person or organisation who collects the service charge for and on behalf of the landlord.

Once a written request under s.21 is made, the landlord or its agent is under a duty to comply with the request within 1 month after the request or within 6 months of the year-end (whichever is later).

If any of the costs were incurred by a superior landlord, the landlord must make a written request for the relevant information to their own landlord.

The landlord must include the following information in the summary:

  1. The way in which the costs have been or will be reflected in demands for service charge
  2. Whether payment for service charge items has been demanded and, if so, whether payment has been made
  3. The amount recovered by the landlord on account of service charges during that accounting period and the amount which remains to the credit of the tenants at the end of that period
  4. Whether any of the costs relate to works for which an improvement grant has been or is to be paid
  5. Certification by a qualified accountant.

Section 22 of the Landlord and Tenant Act 1985

If the tenant or secretary of a Right to Manage Company has obtained a summary of the service charge costs and requests to inspect the documents supporting the summary, they are entitled to oblige the landlord to provide them with reasonable facilities to inspect the accounts, receipts, and other supporting documents and to take copies or extracts from the documents pursuant to s.22.

A s.22 request must be made in writing within 6 months of the tenant or secretary obtaining the summary and can be served on the landlord or any person or organisation who collects the service charge for and on behalf of the landlord.

The landlord has up to 1 month after the request is made to provide facilities for inspection and copying and then has to keep them available to the tenant or secretary for a period of 2 months.

The costs of providing information or documents fall within the scope of administration charges and may not necessarily be fully recoverable, even where the lease provides for this. However, the costs may be recoverable:

  1. If the landlord is required to provide facilities for the inspection of documents, it may recover the costs if this is included within its management costs
  2. If the landlord is required to provide facilities for the copying of documents, it is entitled to make a reasonable charge

It is a criminal offence if the landlord fails to comply with a s.21 or s.22 request without reasonable excuse.  This offence carries a maximum penalty of six months’ imprisonment and/or a fine up to £2,500.

For further information about requests for information relating to service charge, please contact Hansel Ariburun in our Real Estate Disputes team.

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