In addition, s19 LTA 1985 provides for ‘reasonableness’ in respect of service charges. Costs can only be taken into account ‘to the extent that they are reasonably incurred’ and ‘only if the services or works are of a reasonable standard’. If service charges are payable in advance then no greater amount than is ‘reasonable’ has to be paid at that stage. 



Section 20ZA LTA 1985 sets out important consultation requirements. In essence, L must consult with Ts before service charges may be recovered (and this requirement is in addition to any similar procedures in the lease). If L fails to comply then he can only recover a limited contribution from T. But this only applies to ‘qualifying works’ and ‘qualifying long-term agreements’ which are defined as ‘works on a building or any other premises’. In practice this is likely to include virtually any works - but not services. If the consultation procedures are not followed, then L cannot recover more than £250 per T. Moreover, under s20B if any of the costs were incurred more than 18 months before service of the demand, then T will not be liable to pay that part of the service (unless T was notified in writing that those costs had been incurred and that he would subsequently be required to contribute to them). 



For an introduction see [2008] NLJ 1552.© Practical Lawyer