Question 1

Charging in Advance

Accepted Answer

Q: We are going to make some changes to our Memorandum and Articles of Association. We wish to put in place monthly payments and setting Service Charges to be paid in advance, is this something that you can help with. We would like some help with the wording and where we need to make the changes within the Articles. FPRA Vice Chairman Richard Williams replies I do not think that there is any need for the members to alter their Articles of Association, unless they are minded to do a wholesale modernisation. The Memorandum of Association confirms that the company’s job is to manage the property, and the banking or other arrangements for payment of service charges under the lease is part of the management. However, what does need looking at is the lease. The lease should say how service charges should be calculated and when they are payable, and this can only be changed by agreement with each lessee. My impression is that our copy of the lease is defective, in particular in clause 1, I think there should be two or three lines spelling out when and how the ground rent, and perhaps the service charge are paid. I think it is worth asking for a copy of a signed lease, and then passing it over to one of our landlord and tenant lawyers. I have to say that while there is s schedule saying what the service charge covers I can’t see anything that actually says when it has to be paid, or authorising payment in advance. As I say, our copy seems to be defective, but if the signed leases are defective it may be necessary to get them corrected by the Lands Tribunal, who might be sympathetic to inserting a clause allowing service charges to be paid in advance. [Submitted June 2016]

Question 2

Charging in Advance

Accepted Answer

Q: We are going to make some changes to our Memorandum and Articles of Association. We wish to put in place monthly payments and setting Service Charges to be paid in advance, is this something that you can help with. We would like some help with the wording and where we need to make the changes within the Articles. FPRA Vice Chairman Richard Williams replies I do not think that there is any need for the members to alter their Articles of Association, unless they are minded to do a wholesale modernisation. The Memorandum of Association confirms that the company’s job is to manage the property, and the banking or other arrangements for payment of service charges under the lease is part of the management. However, what does need looking at is the lease. The lease should say how service charges should be calculated and when they are payable, and this can only be changed by agreement with each lessee. My impression is that our copy of the lease is defective, in particular in clause 1, I think there should be two or three lines spelling out when and how the ground rent, and perhaps the service charge are paid. I think it is worth asking for a copy of a signed lease, and then passing it over to one of our landlord and tenant lawyers. I have to say that while there is s schedule saying what the service charge covers I can’t see anything that actually says when it has to be paid, or authorising payment in advance. As I say, our copy seems to be defective, but if the signed leases are defective it may be necessary to get them corrected by the Lands Tribunal, who might be sympathetic to inserting a clause allowing service charges to be paid in advance. [Submitted June 2016]

Charging in Advance

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