Under Section 20b of the Landlord and Tenant Act 1985 the leaseholder is protected from being asked to pay towards costs incurred more than 18 months ago.
Normally the lease will provide for the service charge to be demanded in advance, but occasions will arise when the demands are issued after completion of the works or provision of the service. In these cases a statutory time limit applies: the landlord must issue the demand within 18 months of his incurring the cost.
If the demand is provided later than this, the landlord cannot recover the costs at all, unless a notice is served during the 18 months stating that costs have been incurred and that the tenant will be required to contribute to them by payment of a service charge.
The idea behind this policy was stated by Mr. Justice Etherton in the High Court case in 2003 of Gilje v. Charlgrove Securities Limited, “...so far as discernible, the policy behind Section 20B of the Act is that the tenant should not be faced with a bill for expenditure, of which he or she was not sufficiently warned to set aside provision. It is not directed at preventing the lessor from recovering any expenditure on matters, and to the extent, of which there was adequate prior notice”.
