The 18 month rule.
In short
Under section 20B of the Landlord and Tenant Act 1985, a service charge cost incurred more than 18 months before it is demanded generally cannot be recovered from the leaseholder. The exception is where, within those 18 months, the leaseholder was told in writing that the cost had been incurred and that they would later be required to contribute to it.
When does the 18 months start?
When the cost was incurred, which is generally when it was paid or invoiced rather than when the work was done or the budget was set. A demand served more than 18 months after that is too late for that cost.
Do on account demands count?
Where the lease allows payments on account and the actual costs do not exceed what was collected on account, the rule is less likely to bite. It matters most where actual costs run over the budget and a balancing charge is demanded late.
How can a board protect itself?
By demanding balancing charges promptly after year end, and where a cost cannot be demanded in time, by writing to every leaseholder within the 18 months to say the cost has been incurred and that they will be asked to contribute. A general statement that costs may come is not enough; it needs to identify the cost.
Where Servanda comes in
Servanda asks when the oldest cost in a balancing or one-off demand was incurred and warns before issue if it is outside 18 months, so a late bill is caught while there is still time to write to the leaseholders.
Everything Servanda doesThe law
The legislation is the authority; this page is a plain summary for England, checked on 2026-10-23. Wales and Scotland have their own rules. Take advice on any particular building.