Section 47 of the Landlord & Tenant Act 1987 requires a landlord to give his name and address in any written demand to his residential tenants.  This requirement covers the payment of all sums due from the tenant such as rent, service charge and insurance.  Where the landlord employs managing agents, it is common practice for the address to be given care of the managing agents.  This makes perfect sense as it will be the managing agent that prepares the demands, collects the monies and deals with all queries relating to the demands. 

In mid-May the case of Beitov Properties v Elliston Bentley Martin [2012] UKUT 133 (LC) came before the Upper Tribunal.  It had started life in the Leasehold Valuation Tribunal (LVT) as a claim for arrears of service charge against Mr Martin for his flat in an unassuming development in London N9. Indeed the tenant thought so little of the prospects of defending the claim; he did not bother to appear at the hearing at all.  The LVT, undeterred by the straightforward nature of the case, took it upon itself to raise a technical point, not argued before it, namely that the landlord having given its address care of its managing agents had not complied with the statutory requirements of section 47 of the Landlord and Tenant Act 1987.  The Upper Tribunal, although not happy that the LVT had raised an un-argued technical point, had to agree.  As a result, the landlord had not served a valid service charge demand and so nothing was due from the tenant.

In order to comply with the requirements of section 47 a landlord, if he is an individual, has to provide his residential address.  If it is a company it has to provide its registered office.  If either have a separate place of business, they can elect to use this address.  Using a managing agent’s address does not suffice as it is not the landlord’s address.

On the face of it, the implications of this decision seem pretty unremarkable.  If the wrong address is given, it is rectified because as soon as a demand complying with section 47 is made the service charge becomes payable.  The more I think about this decision, however, the more I fear that the consequences may be much more far-reaching than they first appear.

If the landlord is looking to recover service charge that is more than 18 months old this cannot be recovered as it will be time barred, even if a valid demand is subsequently served.  Looking further, if a tenant has paid pursuant to a defective demand he may well be able to claw the last six years payments back on the basis that they were paid under a mistake, namely that a valid demand had been made.  Monies for service charges incurred more than 18 months ago would then be lost as a fresh demand cannot be served and the monies might then have to be repaid.  The landlord has a defence based on change of position – for instance, that it has spent the money or that it has fixed a budget based on a forecast income stream; however the parties are having an argument that has been artificially created by the LVT’s intervention.

What also of the confidentiality issues resulting from the case?  This will particularly affect private landlords who may well not want their residential address publicised in this way.  In that regard, non-England and Wales resident landlords are at an advantage because they are simply required to give an address in England and Wales.

I see from my own rent demand that not all managing agents have yet picked up this point. 

Managing agents check your rent and service charge demands and make sure that the correct information is on them.  An astute tenant can defer payment successfully, which at best may impact on cash-flow for building management purposes and at worst may result in the monies not being recoverable at all.