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Housing Act 1974

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This is the original version (as it was originally enacted).

124Service charges

(1)After section 91 of the Housing Finance Act 1972 there shall be inserted the following section:— Right to challenge service charges.

91A(1)A service charge shall only be recoverable from the tenant of a flat—

(a)in respect of the provision of chargeable items to a reasonable standard ; and

(b)to the extent that the liability incurred or amount defrayed by the landlord in respect of the provision of such items is reasonable; and if any works in respect of which a service charge is claimed are estimated to cost more than £250, at least two estimates of the cost of such works shall be obtained by the landlord or agent and one of the said estimates shall be from a firm wholly unconnected with them, in the manner described in Schedule 12 to this Act;

and if any work in respect of which a service charge is claimed is estimated to cost more than £2,000, there shall be a duty upon the landlord or agent first to discuss it with the tenants' association or if no such body exists or is not wholly independent, then with individual tenants before it is proceeded with (except in cases of emergency) and only after such consultation shall estimates be obtained in accordance with the provisions of this section; and the consultation and expressed views of tenants or their association or both shall be produced to the Court in case of any dispute arising out of the operation of this section.

(2)Any agreement made by a tenant of a flat other than an arbitration agreement within the meaning of section 32 of the Arbitration Act 1950 (whether the agreement is contained in an instrument letting the flat or not and whether it is made before the flat is let or not) shall be void in so far as it purports to provide for determination in a particular manner or on particular evidence (including, without prejudice to the generality of this subsection, determination on the basis of a certificate given by any person) of any question—

(a)whether chargeable items have been provided to a reasonable standard; or

(b)whether the liability incurred or amount defrayed by the landlord in respect of them was reasonable.

(3)The High Court or the county court, on the application of the landlord or tenant of a flat, may by order, in relation to any chargeable items specified in the order, declare—

(a)that they have or have not been provided to a reasonable standard ; and

(b)that the amount alleged to be payable in respect of them is or is not reasonable,

and may direct the amount to be paid by the tenant in consequence of the declaration.

(4)Where in proceedings brought under the foregoing subsection (3) it is proved to the satisfaction of the Court that an association has been formed to represent the tenants one or more of whom are parties to the application and that the membership of such association comprises not less than 60 per cent. of the tenants eligible to belong thereto the Court may in making any order on the application further declare that the said association shall until further order of the Court be recognised for the purposes of this Act as the tenants' association entitled to exercise the rights conferred by this Act and the term " tenants' association" shall refer to such association so long as it is so recognised.

(5)Regulations relating to the formation of such tenants' association may be made by the Secretary of State.

(6)The county court may make a declaration under this section notwithstanding that the declaration is the only relief sought.

(7)In this section " chargeable items " means any items for which a service charge may be payable, and other expressions used in this section have the meanings assigned to them by section 90(12) above.

(8)This section does not apply—

(a)where the landlord is—

(i)a local authority or a county council, or

(ii)a new town corporation, or

(iii)the Housing Corporation, or

(iv)a housing association falling within paragraph (d) of subsection (1) of section 91 above, or

(v)an association or company the membership of which is wholly or mainly restricted to persons who are tenants in the same block or blocks of flats, or

(b)where the tenant is a protected tenant or a statutory tenant within the meaning of the Rent Act 1968 or a lessee within the meaning of Part VI of that Act (furnished lettings).

(9)This section does not apply in relation to an accounting year ending before 1st August 1974.

(2)The amendments of the Housing Finance Act 1972 specified in Schedule 12 to this Act shall have effect, subject to paragraph 5 of that Schedule.

(3)This section shall come into operation at the expiry of the period of one month beginning with the date on which this Act is passed.

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