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Section 76 (Right to a Management Audit)

Summary

1. This section gives Leaseholders who pay a Service Charge for management of the common parts of a building and/or estate to have an audit carried out on their behalf of the way their Landlord manages those common parts

When can this right be exercised?

1. This right can only be exercised by ‘qualifying tenants’. The term tenants includes Leaseholders.

2. To be a qualifying tenant you must:

i. Have a Lease which requires you to pay a Service Charge towards management of the common parts of the building or estate.

ii. Apply jointly with another qualifying tenant if you own a lease in ‘relevant premises’ which has only two qualifying tenants.

iii. Own a lease in ‘relevant premises’ with only a single qualifying tenant if you are not exercising this right jointly with other qualifying tenants.

iv. Apply jointly with no less than two-thirds of the qualifying tenants if you reside in ‘relevant premises’ with three or more qualifying tenants.

What does the term ‘relevant premises’ mean?

1. Relevant premises means:

i. The building within which the dwellings are located

And

ii. Any other relevant buildings.

2. Other buildings become relevant premises for the purposes of Section 76 when they also pay the same Service Charge. The legislation has been written in this way to cover Service Charges for an estate, as well as Service Charges to maintain an individual building.

3. An ‘estate’ may contain several buildings, both residential and non-residential.

4. It is common for a Landlord to raise a Service Charge for the maintenance of the shared outside areas of an estate, such as roads, communal gardens and facilities such as bike sheds, which are shared used in common by the residents of two more buildings.

5. This type of charge is often referred to as an ‘Estate Charge’, as opposed to a ‘Block Charge’ which only relates to the maintenance of the building where the dwelling is located.

6. In order to have a management audit of an Estate Charge carried out under Section 76 there is a requirement that this is supported by two-thirds of all the qualifying tenants paying that charge in all the buildings in the estate, not simply two-thirds of the qualifying tenants in the building where a qualifying tenant’s property is located.

Click on the link to read more about the Leasehold Reform, Housing and Urban Development Act 1993