Section 18 — Landlord and Tenant Act 1985: Meaning of “service charge” and “relevant costs”.

Meaning of “service charge” and “relevant costs”. 18 1 In the following provisions of this Act “ service charge ” means an amount payable by a tenant of a dwelling as part of or in addition to the rent—

a which is payable, directly or indirectly, for services, repairs, maintenance , improvements or insurance or the landlord’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 landlord, or 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.