February 9, 2018 | less than a minute read

So When Are Costs Incurred?

Maples Teesdale

The Upper Tribunal case of Westmark (Lettings) Ltd v Peddle has provided some welcome guidance on when service charge costs are "incurred" by a landlord for the purpose of complying with section 20B of the Landlord and Tenant Act 1985 ("the Act"). Section 20B of the Act provides that a claim for costs incurred must be made against relevant leaseholders within 18 months of such cost being incurred. Where there is a chain of landlords it is now clear that the costs are not incurred by each individual landlord until that particular landlord becomes liable to pay them.

Legal notes: Timing and the service charge chain Key points: ■ Service charges must be demanded within 18 months of the landlord incurring costs, under section 20B of the Landlord and Tenant Act 1985 ■ A landlord “incurs” costs when it receives a demand for payment ■ Where there is a chain of landlords a fresh time limit arises each time a payment is demanded