Grant deductions from service charges LTA 1985 s. 20A
Landlords receiving government housing or repair grants must deduct those grant amounts from total work costs before calculating tenant service charges.
Where relevant costs are incurred or to be incurred on the carrying out of works in respect of which a grant has been or is to be paid under section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or any provision of Part I of the Housing Grants, Construction and Regeneration Act 1996 (grants, &c. for renewal of private sector housing) or any corresponding earlier enactment or article 3 of the Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 (power of local housing authorieses to provide assistance) , the amount of the grant shall be deducted from the costs and the amount of the service charge payable shall be reduced accordingly. In any case where— relevant costs are incurred or to be incurred on the carrying out of works which are included in the external works specified in a group repair scheme, within the meaning of Part I of the Housing Grants, Construction and Regeneration Act 1996 , and the landlord participated or is participating in that scheme as an assisted participant, the amount which, in relation to the landlord, is the balance of the cost determined in accordance with section 69(3) of the Housing Grants, Construction and Regeneration Act 1996 shall be deducted from the costs, and the amount of the service charge payable shall be reduced accordingly.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
When a landlord receives or expects to receive public funding or local authority grants for works on a building, those grant sums cannot be passed on to leaseholders through service charges. Section 20A requires the landlord to subtract the total grant amount from the relevant costs before calculating individual service charge obligations.
This requirement covers grants for housing renewal, separate water service pipes, and local housing assistance programs. In group repair schemes where the landlord participates as an assisted participant, the balance of the cost determined under the relevant scheme must likewise be deducted from the overall costs before service charges are billed.
When it applies
- A landlord receives a local authority grant toward building repairs and charges leaseholders for the full invoice total without deducting the grant.
- A freeholder receives public assistance to install a separate water supply pipe and fails to subtract the grant from the service charge demand.
- A landlord joins a council group repair scheme for external works but passes on the gross cost to leaseholders rather than the reduced balance.
What this section does not say
- Disputes over whether work costs or quality of repairs are reasonable, which are governed by section 19.
- Failure by a landlord to consult leaseholders before starting major building works, which is governed by section 20.
- Time limits for demanding payment of service charge costs, which are governed by section 20B.
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This page reproduces the text of LTA 1985 s. 20A in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.