Section 621A — Housing Act 1985: Meaning of “service charge” and related expressions.

Meaning of “service charge” and related expressions. 621A 1 In this Act “ service charge ” means an amount payable by a purchaser or lessee of premises—

a which is payable, directly or indirectly, for services, repairs, maintenance or insurance or the vendor’s or lessor’s costs of management, and b the whole or part of which varies or may vary according to the relevant costs.

2 The relevant costs are the costs or estimated costs incurred or to be incurred by or on behalf of the payee, or (in the case of a lease) a superior landlord, in connection with the matters for which the service charge is payable.

3 For this purpose—

a “ costs ” includes overheads, and b costs are relevant costs in relation to a service charge whether they are incurred, or to be incurred, in the period for which the service charge is payable or in an earlier or later period.

4 In relation to a service charge—

a the “ payee ” means the person entitled to enforce payment of the charge, and b the “ payer ” means the person liable to pay it.

5 But this section does not apply in relation to Part 14.