The Landlord and Tenant Act 1987 gives tenants the right to know who their landlords are and where to serve notices or proceedings on them. Therefore, demands for payment must contain the name and address of the landlord and, if that address is not in England and Wales, an address in England and Wales at which tenants can contact their landlord. Failure to comply with these requirement means that rent and service charges are not lawfully due: sections 47 and 48 Landlord and Tenant Act 1987.
In Pendra Loweth Management Ltd v North [2015] UKUT 91 (LC); [2015] PLSCS 105, the Upper Tribunal had to consider whether a tenant of a holiday cottage in Cornwall was liable to pay estimated service charges and, if so, whether the estimated service charge demands that were issued to him were invalid because they did not include the name of the landlord. The tribunal rejected the tenant’s claim that the charges had not been demanded in accordance with requirements of lease and overturned the First-tier Tribunal’s decision to disallow the entirety of the sums demanded on the ground that they included items that could not form part of the service charge expenditure.
There was no allegation of deliberate overcharging or bad faith. However, where service charges are payable before the relevant costs are incurred, section 19 of the Landlord and Tenant Act 1985 provides that no greater amount than is reasonable is payable. As a result, the First-tier Tribunal could have reduced the estimated charges to reflect this, as opposed to disallowing them in their entirety.
Consequently, the judge had to consider whether the service charge demands were valid. Primary responsibility for estimating and collecting the service charge, and for service charge accounting, rested with the management company – and the tenant had covenanted with the management company, the landlord, and the owners of the other cottages in the holiday village to pay the service charge to the company. However, the tenant was liable to pay the service charge to the landlord if the management company failed to perform its obligations under the lease and the landlord had to step in to do so instead. There had been no such default in this case
For the purposes of section 47, the Landlord and Tenant Act 1987 defines a “demand” as “a demand for rent or other sums payable to the landlord under the terms of the tenancy” and defines a “landlord” as meaning “the immediate landlord” of the tenant: sections 47(4) and 60(1). Importantly, the statute does not extend the meaning of the expression “landlord” to include any one else with a right to collect service charges.
The judge reminded the tenant that he was liable to pay the service charge to the management company and, because the sums in dispute were payable to the management company, and not the landlord, the demands for payment were not “demands” for the purposes of section 47. Therefore, section 47 was not applicable and the service charge demands were valid, even though they did not include the landlord’s name. Alternatively, if the section was applicable, its only effect would be to cause the charges not to be “due from the tenant to the landlord”: section 47(2). Consequently, the tenant’s obligation to pay the service charges to the management company would have been unaffected.
Allyson Colby is a property law consultant
