Mark Skelton and Others v. DBS Homes (Kings Hill) Limited  EWCA (Civ) 1139: Interim Demands and s20B
The Tenants appealed to the Court of Appeal after the Upper Tribunal had found them liable to pay service charges.
Under the particular lease the landlord could serve a demand for on account estimated costs but this required him to also serve a summary of estimated costs. There was also provision allowing the recovery of a balancing charge if required. The Landlord was seeking on account payments for 2011-2012, 2012-2013 and 2013-2014. The estimate required to be given was not served until 2014.
An effective demand was not issued until more than 18 months after the landlord incurred the costs. The landlord stated that as the payment was an “on account” payment Section 20B did not apply.
The Court of Appeal determined that Section 20B applied to service charges in respect of costs to be incurred as well as costs actually incurred. As a result on account payments could be covered and given the delay in the landlord issuing a valid demand in this case the sums were caught by Section 20B and not recoverable.