Sections 21 and 22 LTA 1985: Service Charge Transparency

Transparency around service charges remains one of the most common sources of disputes between leaseholders, landlords and managing agents. Sections 21 & 22 of the Landlord and Tenant Act 1985 give residential leaseholders rights to obtain information about service charge expenditure and inspect the supporting documents behind it. 

For property managers, understanding these obligations is essential. Failure to comply can damage trust, increase the risk of tribunal proceedings, and potentially expose landlords to criminal liability. S 21A also allow tenants to withhold service charge payments where a landlord fails to provide documents which exactly or substantially meet the s21 requirements.

S 21 of the Landlord and Tenant Act 1985 gives service charge payers the right to obtain a written statement of account from their landlord. To obtain this information, the resident must submit a written request to a landlord or their managing agent, the request does not need to be in any specific format.

The statements must include information about monies paid into and out of a service charge fund.  Statements will have to be certified by a qualified accountant (unless exempt). The landlord must provide the summary within one month of the written request or six months after the end of the accounting period, whichever is later. 

Once the statement has been provided, Section 22 allows leaseholders to inspect the supporting documents, including accounts, invoices, receipts and contracts. The request must be made in writing within six months of receiving the statement. The landlord must make the documents available to view within one month. A landlord may not charge a leaseholder to view the documents. 

Non-compliance often arises from poor record keeping, missed deadlines or misunderstanding a s21 or s22 request. As a property manager, if you receive a s21 or s22 request and don’t know what to do with it or if you are not sure if you have received a request, we can help. Please do not hesitate to contact Lisa Blythe, Solicitor in the Property Portfolio Management Team here. As part of our guidance service, we offer complimentary 30 minute consultation, find out more here.