Leasehold Advisory Service

The Brief - Made on 1st July 2026

• Our estate is of 50 flats at SW15 3HE, Garden Royal, Kersfield Road.
• The freeholder is Kersfield Maintenance Ltd, whose shareholders are all lessees.
• All lessees are shareholders.
• Lessees are elected to the Board.
• However, democracy has died and we have a Board, one of whom [xxxxxxxxxxxx] effectively controls the estate.
• Annual Meetings have been cancelled since the last meeting on 10th June 2025 ended when at the start of the meeting xxxxxxxxxxxx refused to allow notes of the meeting to be made. All further meetings have been cancelled on the grounds of cost.

Our lease contains an explicit clause requiring accounts to be provided as soon as possible after two months after the end of the accounting year which is 31st December.

For several years the accounts have been rendered late.

We suspect "frauds" and have calculated that dome £500,000 has been unlawfully accrued by some members of the Board over the last decade.
We have managed to get some of the scams stopped in particular the letting out of garages for commercial purposes with the help of Wandsworth Council.

We have just received notification that a Section 20B notice has been posted on MyBlockman which the managing agent uses. Many of the older lessees [age about 70] do not use it and thus have not been able to read the notice.

Nevertheless, the question is whether a Section 20B notice is superior to the explicit terms of the lease.

These read:

9. The Lessor shall keep proper books of account of all costs charges and expenses incurred by it in carrying out its obligations and an account shall be taken On the Thirty first day of December next and on the Thirty first day of December in every subsequent year during the continuance of this demise and at the termination of this demise of the amount of the said costs charges and expenses incurred since the date of the commencement of the term hereby demised or of the last preceding account as the case may be.

10. The account taken in pursuance of the last preceding Clause shall be prepared and audited by a competent chartered or incorporated accountant who shall certify the total amount of the said costs charges and expenses (including the audit fee of the said account) for the period to which the account relates and the proportionate amount due from the Lessee to the Lessor pursuant to clause 19 of the Sixth Schedule

11. The Lessor shall within two months of the date to which the account provided for in Clause 9 of this Schedule is taken or so soon thereafter. [Page 13 to 14] as possible serve on the Lessee a notice in writing stating the said total and proportionate amounts certified in accordance with the last preceding clause

The Response - Made on 3rd July 2026

Thank you for your enquiry of 01/07/2026.

To clarify section 20B of the Landlord and Tenant Act 1985 is a separate matter from the clause in your lease requiring accounts to be provided as soon as possible after two months after the end of the accounting year, 31st December.

Under section 20B(1) of the Landlord and Tenant Act 1985 freeholders (managing agents acting on their behalf) have 18 months from when they incurred a service charge cost (e.g., received an invoice or paid it) to demand payment from a leaseholder, otherwise the service charge item is not payable. Case law qualifies the 18-month rule under. OM Property Management v Burr [2013] provides that costs are incurred from one of two trigger dates. The trigger dates are the date your landlord (managing agent) received the invoice or when your landlord (managing agent) made the payment. If any of these trigger dates fall within 18 months of the you receiving your invoice then you will be liable to make the payment in so far as a valid demand has been issued.

The exception is that under 20B(2) if your landlord (managing agent) sent a written within 18 months of the major works costs being incurred stating that a demand for payment will follow in due course, the 18-month rule would be disapplied and you would be liable to pay.

Serving a Section 20B(2) notice only preserves the right to demand money later. It does not grant an extension to the service charge accounting deadline dictated in clauses 9 and 10 of your lease.

I do understand that the problem you may have is that the section 20B(2) notice is treated as an accrual for accounting purposes and accruals can delay the production of service charge accounts. The other problem is that even in cases with lease clauses requiring service charge accounts to be
produced by a certain time, courts have not been helpful as they have found time not to be of the essence. In the case of West Central Investments v Borovik (1977), the lease required the landlord to have accounts prepared and served within two months of the end of each accounting year.
The accounts for the years 1970 to 1973 were not prepared until 1974. The court held that the two-month stipulation did not make time of the essence for the production of the accounts, and the landlord was entitled to recover the service charges shown on those accounts as owing.

So how can you resolve your situation? I would suggest if you have no confidence in the director and the director refuses to call a general meeting, you could compel a general meeting under sections 303 to 306 of the Companies Act 2006 You would need at least 5% of the members of the management company (so at least 3 leaseholders) to sign a requisition notice stating the resolutions you would like to vote on at the general meeting (this can include a vote on whether to re-elect the current director), and then nominate (a) replacement leasehold director(s) and send this to your managing agent.

Statutory rights to service charge information

Even if the service charge accounts have not been finalised, you have certain statutory rights to obtain a summary of your service charge expenditure from your management company under section 21 of the Landlord and Tenant Act 1985 (and regulation 3(9) of The Service Charges (Summary of Rights and Obligations, and Transitional Provision) (England) Regulations 2007)) and further information (invoices and receipts) under section 22 of the Landlord and Tenant Act 1985.

This right is limited to service charge expenditure relating to the last 12-month accounting period ending no later than the date of your request. Here is a link to our template letter for making a section 21 request, which you are welcome to use. Similarly, under section 22 of the Landlord and Tenant Act 1985, within 6 months of receiving a summary of your costs, you can request invoices, receipts and other supporting documents for your service charge. Your management company must provide facilities for you to inspect and take copies or extracts of the accounts, receipts, and other supporting documents related to your service charge, after receiving the summary under section 21 of the Act. Here is a link to our template letter for making a section 22 request, which you are again very welcome to use.

If your managing agent instructed and on behalf of your freeholder fails to comply with sections 21 and 22 they commit a summary offence and are liable on conviction to pay a fine. Section 34 of the 1985 Act expressly enables a local housing authority to initiate criminal prosecutions for offences under the 1985 Act, including failing to comply with section 21/22 obligations without reasonable excuse. Violations can lead to a fine, with current penalties allowing for fines of up to £2,500. If your freeholder/ managing agent is a body corporate, section 33 allows for directors or managers to be prosecuted alongside the company.

However, please note, this is at the discretion of your local housing authority and there is no other body that can bring this prosecution under the current legislation. I understand your council is already involved with your property in bringing various enforcement notices against them but if you approach them and request them to, they have the power to bring a prosecution against your freeholder for non-compliance with sections 21 and 22. However, realistically most local authorities won’t have the resources to bring such a prosecution.

Reforms to statutory service charge information rights

The Leasehold and Freehold Reform Act (LAFRA) 2024 would, when brought into effect (it is largely not yet in force and we cannot advise when it might be brought into force) implement improvements to service charge transparency including:

• Standardised Service Charge Demands: freeholders and managing agents will be required to issue service charge demands in a prescribed, standardized format, making them easier to understand and compare.
• Annual Reports: freeholders and managing agents must provide an annual report in a prescribed form within one month of the end of the accounting period.
• Greater Access to Information: the rights to request a summary of costs and to inspect supporting documents (sections 21-23 of the Landlord and Tenant Act 1985) are extended, allowing leaseholders easier access to information about their building's management.
• Insurance Commission Disclosure: the Act removes the ability of freeholders and managing agents to hide insurance commissions, requiring them to be replaced by an 'insurance handling fee' based on work actually undertaken.
• Administrative Charge Schedules: freeholders and managing agents will have a duty to publish an administration charge schedule and update it whenever it changes.
• Improved Accounting Standards: for buildings containing four or more dwellings, a written statement of account must be provided within six months of the end of the accounting period, and it must include a qualified accountant's certification.

I hope my comments prove helpful. 

The Brief - Made on 3rd July 2026

Use of MyBlockman software for service of documents.

The lessee does NOT use, and has not signed up to use software called MyBlockman used by HES Estate Management Ltd, 2 Chartland House, Old Station Approach Leatherhead, Surrey KT22 7TE.

Noted that HES has created an account for the lessee which account has never been accessed.

HES has sent an email to the lessee which says

Quote

HES ESTATE MANAGEMENT LTD has uploaded new information to your account.

• A new document, "ATTACHMENT TO SECTION 20B LETTER" has been added to Block Documents in Garden Royal
• A new document, "SERVICE CHARGE ACCOUNTS SECTION 20B NOTICE" has been added to Block Documents in Garden Royal

End Quote

The lessee is seventy years old, and keeps immaculate written records. She owns three flats which are let out. One flat in London at SW15 3HE has major management problems which have been ongoing for many years. The lessee has advised HES that all communications and notices etc are to be sent in hard copy by post to her address in Scotland.

The question is whether the above documents been satisfactorily served ?

Note it appears that the provisions given in the court rules have not been followed:
https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part06

The Response is awaited.