RTM: Unallocated Service Charges (s94)
If the landlord has collected service charges in advance, with the unspent sums being held in an investment trust account, under s94 he is under an obligation to hand over these monies as well as any interest paid to the company after he has deducted proper expenses he has accrued up to the acquisition date. Unspent sums will also include any reserve account or sinking fund. The RTM doesn’t have to serve a notice for these monies because legislation requires the landlord to act and to make to payment to the RTM company on the acquisition date ‘or as soon after that date as is reasonably practical. It is important that these unspent funds are obtained as soon as possible because the RTM company is not required to have any capital.
Whilst some landlords are happy to rely on the LVT to fix the sum, others only pay what they consider appropriate which is often disputed and taken to the Lands Tribunal for them to resolve. This is where an independent audit could prove valuable both in the pursuit of fairness as well as being time saving.
Note: Monies due to the landlord before acquisition date but not yet paid, remain payable to and collectible by the landlord, not the RTM company.