Service charges – no rent liability

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  • #23090
    Anonymous
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    Can we pay service charges for owner occupiers if the service charges are ones that would be paid if there was a rent liability?

    I don’t think we can, but I’ve had a query from a housing association on this. It’s a block of flats for disabled people, and all but one resident own their properties. The one that is a tenant gets some of the service charges met by HB. The owner occupiers get CTB only.

    Now a housing association has gone into part ownership of one of the flats but as far as we can ascertain there is no rent liability. The letter from the HA simply states that they part own the property and that the resident has to pay council tax and service charges. Now they want us to look at paying the eligible service charges. Can we?

    #10840
    Anonymous
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    Almost certainly not, because it is extremely likely that the liability to pay service charges (and probably a small amount of rent as well) arises under a long lease.

    They won’t be “owners” in the HB sense because that definition only applies to freeholders. But their service charges and ground rent are still excluded if the lease was originally for 21+ years. Instead, they can get IS/JSA/PC depending on their age and job market status.

    There is an exception to the general long lease exclusion for shared ownetrship leases, where the occupier gradually acquires a percentage stake. If any of your claimants have shared ownership leases, they can claim HB for the service charges and ground rent, unless they have already claimed IS/JSA/PC for the same costs (and vice versa)

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