PART XVIII MISCELLANEOUS AND GENERAL PROVISIONS

General provisions

F1621A Meaning of “service charge” and related expressions.

(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.

F2(5)

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