Schedule 8: Remediation costs under qualifying leases Paragraph 5: Limit on service charge in other cases Effect
Paragraph 5 makes provision for limits on service charges under qualifying leases.
	Sub-paragraph (1) sets out that a service charge in respect of a relevant measure (to which see paragraph 1) relating to a relevant defect (to which see section 120) cannot exceed the permitted maximum, meaning that landlords cannot charge leaseholders more than that amount. Sub-paragraph (4) provides that "the permitted maximum" is defined in paragraph 6.
	Sub-paragraphs (1)(a) and (1)(b) define the service charges that are to be counted towards the permitted maximum for the purposes of the Schedule. If the landlord is seeking to levy a new service charge, the amount of that service charge, plus the total amount of "relevant service charge" which have been levied before the new service charge, cannot exceed the permitted maximum.
	Sub-paragraph (2) defines "relevant service charge". Any service charge which falls due after commencement (which is two months after Royal Assent of this Act, or 28 June 2022) is to be counted as a relevant service charge; in other words, any service charge levied after commencement in respect of a relevant measure relating to a relevant defect is counted as a relevant service charge.
	In addition, any service charge that was levied in the pre-commencement period is also counted as a "relevant service charge". Sub-paragraph (3) defines the "the pre-commencement period".
	In most cases, the pre-commencement period will be the period of five years leading up to commencement, which is the period from 28 June 2017 to 28 June 2022. This means that any service charges paid in that period in respect of relevant measures are to be counted towards the permitted maximum. This applies if the person who is the tenant under the lease ("the relevant person") has been the leaseholder since 28 June 2017.
	If relevant person did not become the tenant under the lease until after 28 June 2017, then sub-paragraph (3)(a) provides that the pre-commencement period for that person began when they became the tenant under the qualifying lease. This means that any service charges in respect of relevant measures paid since the person became the leaseholder, if that time was after 28 June 2017, are to be counted towards the permitted maximum.