First-tier Tribunal Determines Reasonableness of Service Charges

OUTCOME: Allowed in Part

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

LON/00BJ/LSC/2024/0687

Property

:

11 [NAME], 4 [ADDRESS] [POSTCODE]

Applicant: [redacted]

:

In person

Respondent: [redacted]

[COMPANY] (management company)

Representative

:

[COUNSEL] of counsel, instructed by [NAME]

:

Liability to pay service charges under s.27A Landlord and [APPELLANT] 1985

Tribunal Members

:

Judge [NAME] [NAME] and venue of hearing

:

23 September 2025 Havant Justice Centre, CVP

Date of Decision

:

22 October 2025

DETERMINATION

Introduction 1. This is an application under s.27A Landlord and [APPELLANT] 1985 (“LTA 1985”) for determination of liability to pay service charges. Background 2. The matter relates to 11 [NAME], 4 [ADDRESS] [POSTCODE], which comprises a 2-bedroom flat in a [NAME] of 25 similar properties. The [NAME] forms part of the larger [NAME] development of 200 flats.

3. The headlease for the [NAME] is held by [COMPANY], which is not a party of the application.

4. By a [NAME] dated 20 April 2011, the flat was demised for a term of 125 years from 1 January 2007 (“the [NAME]”). The [NAME] is vested in the applicant. The [NAME] was in tripartite form, with the [COMPANY] responsible for the provision of [COMPANY] and the collection of service charges. The respondent retains [RESPONDENT] as managing agents.

5. The [NAME] includes standard service charge provisions, which include provisions for interim and balancing payments. The three basic service charges are described as (1) an [NAME] and Building Service Charge (2) an Apartment Service Charge for [NAME] and (3) a Gym Service Charge. Insofar as they are relevant to the application, the material [NAME] provisions are set out below.

6. [NAME] has adopted a service charge year ending 30 September in each year. The agents account for the various charges annually, describing the [NAME] and Building Service Charge as an “[NAME]” and the Apartment Service Charge as a “[NAME] Service Charge”. The tribunal adopts those labels in its decision. It was explained at the hearing that the agents applied an apportionment of 0.1647% of relevant costs to arrive at the applicant’s [NAME] Service Charge, and an apportionment of 3.8949% of relevant costs to calculate the applicant’s [NAME] Service Charge.

7. The respondent has [NAME] prepared budgets for 2022/23 [p.164], 2023/24 [p.165] and 2024/25 [p.179] and demanded payment of quarterly service charges in advance. At year end it prepared service charge accounts for 2021/22 [p.188], 2022/23 [p.296] and 2023/24 [p.61]. During the relevant period the respondent made end of year adjustments. On 19 July 2023, the applicant was credited with £178.25 for the 2021/22 service charge year. On 28 March 2024, the respondent demanded payment of an additional £624.77 for the 2022/23 service charge year [p.306].

8. On 16 October 2024, the applicant applied to determine liability to pay service charges under s.27A LTA 1985. The application suggested he challenged elements of the 2022 and 2023 service charges, although by the time of the hearing it was clear this meant the 2021/22, 2022/23 and 2023/24 service charge years. The ap- plication also referred to interim charges for 2024 and 2025, although again by the time of the hearing, this meant the 2024/25 interim service charge years. Direc- tions were given on 18 March, 16 May and 2 July 2025.

9. Both the applicant and respondent filed statements of case [p.28] and the appli- cant has replied to the respondent’s case [p.32]. The applicant further filed wit- ness statements from [APPELLANT] [NAME] (15 [NAME]) and [NAME] (10 [NAME]) [p.40].

10. The matter was listed before a different regional panel because of a potential con- flict involving one of the parties. A remote hearing took place on 23 September 2025. The applicant appeared in person. The respondent was represented by Mr [COUNSEL] of counsel. In addition to the documents included in the bundle pre- pared by the applicant, counsel referred to its statement of case and enclosures which had been omitted form the bundle. Although there were initial difficulties ensuring the applicant had copies of these documents, the tribunal was eventually able to proceed with the hearing. It is grateful to both the applicant and Mr [APPELLANT] for their helpful and economical submissions.

Witness Evidence 11. A brief mention should be made of the witness evidence. Mr [NAME] attended the hearing and gave evidence. His witness statement dated 26 March 2025 [p.39] suggested that the service charges are unreasonably high relative to similar build- ings in the area (£1800-£2000). The service charges for Mr [NAME] own flat far exceeded this average, totalling approximately £4,900 a year, with no correspond- ing improvements or additional [COMPANY] that would warrant such a premium.

12. In cross-examination, Mr [NAME] accepted he had not produced any service charge accounts for similar buildings. He had reached his opinion by looking through real [NAME] websites such as Zoopla. He as currently looking for a flat for his daughter, and flats in the area (Putney, Roehampton and Barnes) had service charges ranging from £1,800-£2,000 pa.

13. The Tribunal thanks Mr [NAME] for attending the hearing and answering questions openly and honestly. But it cannot place any real weight on his evidence, which lacks specific detail about the costs incurred by landlords and management com- panies for similar [NAME] of flats. Service charge accounting 2022/23 14. The applicant’s first point was that the 2022/23 service charge accounts [p.188] were only signed on 27 July 2023, nearly a year after the end of the financial year. Whilst a notice under s.20B LTA 1985 had been issued [p.228], the consistent pattern of delayed budgeting followed by short payment deadlines was unreason- able. The applicant asked the tribunal to direct the respondent to issue budgets in a timely manner to ensure transparency and fairness for leaseholders. However, the tribunal has no power to make such any such direction. [NAME]. The applicant referred to costs of £108,693 for “[COMPANY]” which appeared in the 2021/22 [NAME] Service Charge accounts [p.247]. He originally

argued there were no operational CCTV systems on the [NAME], merely dummy se- curity cameras. The costs were therefore not justified. However, the respondent explained that “Security systems and CCTV” largely related to security patrols on the [NAME]. The respondent’s statement of case exhibited receipts for expenditure security staff, which gave details of hours worked and hourly charge rates.

16. At the hearing, the applicant submitted that the cost of security patrols was never- theless excessive. He explained there were 2 security staff on the [NAME] who worked in shifts (7pm to 7am weekdays and 24hrs at weekends). He provided no alterna- tive estimates for the cost of providing full-time security patrols.

17. The respondent made general submissions about the applicant’s failure to produce evidence in relation to s.19(1)(a) LTA 1985 challenges. In particular, counsel quoted from the Deputy President in [COMPANY] v [NAME] [2020] UKUT 0151 (LC) §28: “28. Much has changed since the Court of Appeal’s decision in Yorkbrook v [NAME] but one important principle remains applicable, namely that it is for the party disputing the reasonableness of sums claimed to establish a prima facie case. Where, as in this case, the sums claimed do not appear unreason- able and there is only very limited evidence that the same [COMPANY] could have been provided more cheaply, the FTT is not required to adopt a sceptical ap- proach. In this case it might quite reasonably have taken the view that Mr [NAME] had failed to establish any ground for thinking the sums claimed had not been incurred or were not reasonable, which would have left only the question whether any item of expenditure was outside the charging provi- sions.” Mr [APPELLANT] submitted the applicant had not met this threshold test.

18. Decision. The applicant does not dispute the hours worked by the security staff are reasonable. And he has not provided alternative estimates to show the hourly rates charged for their [COMPANY] are excessive. The tribunal agrees the applicant has not raised a prima facie case that security staff costs were not reasonable. It therefore

finds the costs of CCTV and security staff incurred during the 2021/22 service charge were reasonable incurred for the purposes of s.19(1)(a) LTA 1985. Pest control 19. The applicant referred to costs of £1,610 for “Pest Control”, which appeared in the 2021/22 [NAME] Service Charge accounts [p.247]. He argued that despite living at [NAME] for five years, he had never seen any pest control being carried out. At the hearing he said he walked around the [NAME] regularly and had seen mice. This charge should be removed and refunded.

20. The respondent argued that pest control was a standard part of [NAME] management and that it was provided for in the [NAME]. As to the applicant’s submissions, the applicant may not have observed pest management first hand, but that was not to say it was not carried out elsewhere on the [NAME].

21. Decision. The documents attached to the respondent’s statement of case included an invoice for £396 from [NAME] dated 20 January 2022 for “the next quarter of pest control service agreement”. The invoice refers to 12 visits to the [NAME] each year and the provision of “metal boxes” around the perimeter of a lawn area. The tribunal is satisfied from this invoice that during the 2021/22 service charge year the applicant had in place a pest control service agreement. The appli- cant has not raised even a prima facie case that the cost were not reasonably in- curred under s.19(1)(a) LTA 1985. As to the standard of these [COMPANY], it accepts there may not have been any physical evidence on the ground of a pest control ser- vice agreement and any rodent boxes around the perimeter of the lawn areas of the [NAME] may not have been obvious to residents at [NAME]. The tribunal prefers the evidence based on the invoices that (1) contractors did visit the site and (2) that they provided rodent boxes. It finds the pest control [COMPANY] were provided to a reasonable standard under s.19(1)(b) LTA 1985.

Electricity 22. The applicant referred to costs of £2,132 for electricity costs which appeared in the 2021/22 [NAME] Service Charge accounts [p.200].

23. The applicant argued that lights in the common parts remained on continuously despite repeated requests for motion sensors or timers and that this inefficiency should be addressed. In oral argument, he explained there were approximately 12 lights in the common parts of the [NAME]. They were on light activated sensors, which meant that during the day they were not on, but that after 5pm they remained on constantly. The applicant suggested PIR movement sensors at night would produce a 50% saving, although he accepted there was no evidence to support this.

24. The respondent argued that electricity charges were subject to service provider rates. The applicant was raising a point of potential improvement works that would likely be subject to a s.20 LTA 1985 notice consultation. In closing, counsel sub- mitted that the light activated units were one of a range of cost-effective responses to energy saving.

25. Decision. There is no quarrel with the standard of service provided, or indeed the level of the charges made by the electricity suppliers. The argument is simply that there was a cheaper option for lighting the common parts than a system which used simple light-activated sensors. There is no evidence, let alone expert evidence, to support the submission that an alternative system would deliver any appreciable savings. But in any event, the light-activated system adopted by the respondent was one of a range of reasonable responses available to a manager. In [NAME] v [NAME], [2017] EWCA Civ 45; [2017] H.L.R. 16, the Court of Appeal explained said at [37]: “That said it must always be borne in mind that where the landlord is faced with a choice between different methods of dealing with a problem in the physical fabric of a building (whether the problem arises out of a design defect or not) there may be many outcomes each of which is reasonable. I agree with

Mr [NAME] that the tribunal should not simply impose its own decision. If the landlord has chosen a course of action which leads to a reasonable outcome the costs of pursuing that course of action will have been reasonably incurred, even if there was another cheaper outcome which was also reasonable.” In this case, the tribunal finds that the use of light-operated sensors was a course of action which led to a reasonable outcome. The applicant has not therefore es- tablished the energy costs were not reasonably incurred for the purposes of s.19(1)(a) LTA 1985.

Communal areas cleaning 26. The applicant challenged cleaning costs £4,086 which appeared in the 2021/22 [NAME] service charge accounts [p.200]. The 2022/23 [NAME] [NAME] service charge accounts included costs of £6,563.90 for cleaning [p.238]. The 2023/24 [NAME] [NAME] service charge budget included estimated costs of £8,414 for [NAME] cleaning [p.168]. But this reduced to £5,250 for the 2024/25 service charge year.

27. The applicant’s case was that the costs were excessive because cleaning of the com- mon parts was minimal. At [NAME], the cleaning was limited to vacuuming and occasional mopping. He referred to photographs in the bundle taken in mid- 2025 showing the ground floor lobby [p.65-66]. The applicant explained that the common areas comprised two staircase “cores”, each with a tiled ground floor lobby, carpeted stairs to the two upper floors and carpeted landings on each floor. Cleaning would involve mopping the lobby and vacuuming 4 flights of stairs and 4 landings. The applicant submitted this ought to take 10 mins of mopping of each hallway, plus 45mins to vacuum the carpets on each staircase and landing = say 2hrs. If cleaned each working day, this would be 10hrs a week in total. The appli- cant apologised for not providing any alternative cleaning cost comparables.

28. The respondent argued that the cleaning was not limited to carpets and floors. There were also skirting boards, glass panels, cleaning of the car park area, etc. It was sheer speculation that the costs were excessive.

29. Decision. The tribunal finds the applicant has again failed to establish a prima fa- cie case that the cleaning costs were not reasonably incurred in 2021/22 and 2022/23 or that the budgeted cleaning costs were more than reasonable in 2023/24. There were no alternative comparable quotations for cleaning the [NAME]. But even on the applicant’s figures, cleaning the [NAME] would take 523 hours a year. If one assumes there were no costs incurred for cleaning materials, and applying the applicant’s figures, a rough calculation suggests cleaning was provided at hourly rates of £7.81 (2021/22) and £12,55 (2022/23). Even though the costs rose sharply over this period, these hourly rates are not manifestly excessive for clean- ing in London.

30. For 2023/24, the budgeted cleaning costs for [NAME] costs rose sharply. A similar rough calculation suggests the budgeted amount was equivalent to an hourly rate of £16.09 in 2023/24, which again does not seem excessive in London. The budgeted cleaning costs fell significantly to £5,250 in 2024-25 [p.322], which is below the cleaning costs actually incurred in 2022-23.

31. The tribunal finds the 2021/22 and 2022/23 cleaning costs were reasonably in- curred for the purposes of s.19(1)(a) LTA 1985. As to the budgeted costs, the 2023/24 and 2024/25 [NAME] cleaning costs were not unreasonable for the purposes of s.19(2) LTA 1985. Fire door inspections 32. The applicant challenged a line item for £730 “Door & emergency system” which appears in the 2021/22 [NAME] [NAME] service charge accounts [p.200]. He referred to two sales invoices from [COMPANY] described as for “Fire Door inspection”. The first is dated 25 April 2023 for £4,578.60 [p.414] and the second dated 18 July 2023 for £3,467.10 [p.415]. Both were addressed to “Queen Mary’s [NAME]”. In his Reply, the applicant argued that the respondent had not provided any clear justification. All doors in the building were relatively new and seem to be compliant with fire safety standards. At the hearing,

he also argued it was not reasonable to incur the cost of 3-monthly fire safety in- spections.

33. The respondent argued it must ensure all laws and regulations were complied with. This included having health and safety inspections and fire door inspections un- dertaken. Counsel also suggested at the hearing that quarterly fire door inspections were not unreasonable.

34. Decision. This point was not conspicuously well argued on either side. Quite apart from anything else, the two invoices both sides referred to were costs incurred in the 2022/23 service charge year. They cannot possibly therefore relate to the £730 line item in the 2021/22 accounts. But in any event, the argument is that inspec- tions are unnecessary because the doors are too new to require regular inspection. That is simply wrong. Regular inspections for continued fire safety compliance is a routine and regular feature property management. Balcony glass 35. The only challenge to recoverability under the terms of the [NAME] concerns the cost of balcony glass replacement. The applicant’s Reply explained that the challenge related to three invoices rendered by contractors to the respondent for work to the glass balconies in the flats, namely invoices from [COMPANY] dated 6 January 2023 (£312) and 31 March 2023 (£420) [p.44 and 399] and from [COMPANY] dated 4 January 2023 (£1,014) [p.49]. It is clear they were included in the 2022/23 [NAME] [NAME] Service Charge, although it was not explained where they fell within the specific cost headings in the annual accounts.

36. The applicant’s case was that under the [NAME] (Schedules 2 and 3), balcony glass is the responsibility of the leaseholder. By Part 1 of Sch.3 to the [NAME] [p.143], “Each Apartment shall comprise the tiling and floor coverings on the floors the windows window frames glass in the windows all doors doorframes plas- ter on the ceilings and walls and all Transmission Media or other conducting media and any installations of whatsoever kind solely serving the Property

but excepting the airspace and strata above and below the Property and those parts of the Main Structures which surround lie within and/or support the Apartment and the structural element of any balcony and in respect of those Apartments on the top floor of the Building the roof space directly above those Apartments” The term “Main Structures” was in turn defined by Sch.2 as [p.144]: “1. The exterior walls and the foundations roofs (and roof spaces above Apart- ments) and meter cupboards of the Building the internal load bearing walls and the floor and ceiling joists beams or slabs of all the Apartments including the surfacing structural element and ironwork of any balconies 2. The Common Parts and the windows window frames glass in the windows doors doorframes plaster on the ceilings and walls of the Common Parts and 3. The Transmission Media of every kind or other conducting media which is common to more than one Apartment and/or the Common Parts or exclusive to the Common Parts and 4. Any external lighting to any balcony but not the light bulbs therein (which shall be the responsibility of the [APPELLANT] to replace) where such balcony is for the exclusive use of an Apartment” In essence, the applicant’s case was that the glass panels were not a “structural element” or “ironwork of [the] balconies” in para 1 of Sch.2. Repairs to the panels were the responsibility of the individual leaseholders and the cost could not be in- cluded in the 2022/23 [NAME] service charges.

37. The respondents’ counsel argued that the balcony glass forms part of the structure and the landlord/manager repairing covenant. The structural element of any bal- cony is excluded from “the Property” and the definition of an apartment in Pt.1 of Sch.3 to the [NAME]. The structural element of any balcony is included in “the Main Structures” under Sch.2 to the [NAME]. It was well established that external windows and glass are part of the structure and exterior for the purposes of landlord repair- ing covenants: Ball v Plummer (1879) 23 SJ 656, CA. The glass served a purpose because it provided safety and kept out wind and rain.

38. The arguments on this point at the hearing were not particularly lengthy. But given the possible implications for management of the [NAME] (and possibly the [NAME]), the tribunal sets out its reasoning in greater detail.

39. Facts. As to the facts, the tribunal was not invited to inspect, but there were photo- graphs with sufficient detail to enable it to reach a decision. One photograph [p.64] shows balconies at second and third floor levels. The lower balcony is sup- ported by two square brick pillars which continue as far as the underside of the third-floor balcony above. Between the two pillars and between the pillars and the flank walls are concrete lintels at each level, which in turn support brickwork just below the surface of the balconies. However, the more significant features in this instance are the balcony railings. At second-floor level, the railings for each balcony are formed by three black metal units, which are bolted to the brickwork. Each composite unit incorporates a horizontal handrail welded to the top of a square or rectangular frame. The frames incorporate “X” shaped metal cross bracing with a circular decorative feature in the centre, and four brackets to receive glass panels. The upper balcony differs only in that instead of the brick pillars, the frames incor- porate metal upstands. But in both cases, rectangular or square glass panels are mounted on the brackets of the metal frames.

40. Decision. This issue is essentially one of interpretation of the covenants in the flat leases, and in reaching its decision, the tribunal applies the well-known principles of interpretation of leases helpfully summarised by Lord [NAME] in Arnold v Britton [2015] UKSC 36, [2015] AC 1619 §15-23. For the purposes of this exercise, the tribunal notes that the [NAME] plans show the balconies for each flat. The tribunal is therefore satisfied the parties to the [NAME] would have been aware of the balcony construction features at the date the [NAME] was executed.

41. The critical words of para 1 of Sch.2 to the [NAME] are the reference to the “structural element … of any balconies”. As to the meaning of “structure”, counsel only cited one authority, namely Ball v [COUNSEL]. This is of little assistance, since it is a Vic- torian case about windows. More helpfully, in Irvine v Moran (1992) 24 H.L.R. 1,

Mr Recorder Thayne Forbes QC (sitting as a deputy judge of the Queen’s Bench Division) made the following comment about the word “structure”: “… the structure of the dwellinghouse consists of those elements of the overall dwelling house which give it its essential appearance, stability and shape. The expression does not extend to the many and various ways in which the dwellinghouse will be fitted out, equipped, decorated and generally made to be habitable. I am not persuaded by [counsel for the landlord] that one should limit the expression ‘the structure of the dwellinghouse’ to those aspects of the dwellinghouse which are load bearing in the sense that that sort of ex- pression is used by professional consulting engineers and the like; but what I do feel is, as regards the words ‘structure of the dwellinghouse’, that in order to be part of the structure of the dwellinghouse a particular element must be a material or significant element in the overall construction.”1 [NAME] related to the term “structure and exterior” s.11 LTA 1985, Lord [NAME] described this passage as a “good working definition [of the word “structure”] to bear in mind, albeit not one to apply slavishly”: [COMPANY] v Rowe [2006] 2 E.G.L.R. 27 at [17].

42. The tribunal is an expert tribunal and applies that expertise to the nature of the balconies. It considers the glass panels are not essential to the appearance, stability or shape of the balconies: (1) The black metal handrails and frames alone are sufficient to form railings for the balconies. In particular, the “X” shaped braces provide the most im- portant function of a balcony railing, namely preventing adults from falling outwards (although it is possible a small child might be able to fall between the metal bars). (2) The frames also provide the distinctive appearance and shape of the balco- nies.

1 This passage was approved of as a “good working definition” by Neuberger LJ in [ADDRESS]- vices v Rowe [2006] 2 E.G.L.R. 27.

(3) It is also relevant that the frames incorporate supports for the glass panels, rather than the glass panels being integral to the units. (4) The glass panels do affect the appearance of the balconies. But they are not “essential” to that appearance.

43. The tribunal considers the primary function of the balcony glass is to give limited protection against the elements, whilst allowing more light into the flats and giving a slightly better view from inside. The tribunal ultimately concludes the primary function of the glass is decorative and not “structural” in the ordinary sense of the word. The panels are not therefore a “structural element … of any the balconies” within the meaning of para 1 of Sch.2 to the [NAME].

44. This interpretation is supported by other words in para 1 of Sch.2. The words which immediately precede and follow the term “structural element” in para 1 of Sch.2 refer to the “surfacing” and “ironwork” of the balconies. These show that the drafts- man was well aware of the main construction elements of the balconies and con- sciously chose not to refer to the glass panels. The interpretation is also supported by paras 2 and 4 of Sch.2 to the [NAME]. Para 2 of Sch.2 shows that where the parties intended to refer to “glass” elements of the building, they expressly did so. Para 4 reinforces the point that the parties were aware of detailed elements of the balco- nies such as lighting and light bulbs. But they again chose not to mention the rather more significant glass panels on the balconies.

45. The tribunal’s interpretation also fits with the overall purpose of Sch.2 and 3, which is to allocate parts of the building to each party. In particular, the [NAME] allocates the Common Parts including the “glass in the windows” to the landlord by para 2 of Sch.2. By contrast, Sch.3 allocates the flat and the balconies together with the glass in the windows to the flat to the lessee. Since the balconies form part of the demise (save as expressly excepted), it seems consistent with this that the glass in the balconies is also allocated to the [APPELLANT].

46. The tribunal recognises commercial common sense might point to an intention that the glass panels should be managed and replaced by the respondent. This

might be more convenient to preserve the external appearance of the [NAME], and to enable the metal frames and glass mounted on them as a single unit for mainte- nance purposes. Commercial common sense cannot of course re-write the bargain between the parties: [NAME] v [NAME] §20. But in any event, the tribunal considers these possible problems are properly managed by the [APPELLANT]’s repairing covenant at para 20 of Sch.1 to the [NAME], by the ‘[NAME] v Harris clause’ at para 23 of Sch.1 and by the express covenant against alterations to balconies at para 32 of Sch.1. The respondent retains control over any work and can force the leaseholders to repair the glass as and when necessary. The tribunal’s interpretation cannot there- fore be said to make no commercial sense or to lead to absurdities.

47. In short, the tribunal agrees with the applicant’s interpretation of para 1 of Sch.1, albeit that the above reasons are rather more detailed than the submissions made at the hearing. The three items of cost of work to the glass panels referred to above (£312, £420 and £1,014) should not form part of the 2022/23 [NAME] Service Charge. Applying the apportionment of 3.8949% set out above, the applicant’s 2022/23 [NAME] service charges should be reduced by £68.

“PHD Invoices” 48. This issue involved the following invoices for work carried out by PHD Mechanical during the 2023/24 service charge year: • 23.09.22 INV-14229 £425.38 [p.397] • 16.01.23 INV-16873 £288 [p.45] • 17.01. 23 INV-16879 £1.200 [p.403] • 27.02.23 INV-18216 £587.21 [p.405] • 17.05.23 INV/20189 £803.15 [p.413] • 31.05.23 INV/20457 £1,202.10 [p.406] • 29.06.23 INV/21040 £978 [p.408]

49. The applicant’s case was that these charges were essentially for the same issue with a faulty pump. The previous manager had confirmed the pump should be

replaced and paid for from reserve funds, yet this was not done. The work ex- tended over a 9-month period, even when the work was classified as ‘emergency repairs.’ The excessive costs accumulated over that time is unreasonable and should not be covered by the applicant or other leaseholders in the building. At the hearing, the applicant explained that the costs were unreasonably incurred because rather than spending regular amounts of money meeting breakdowns as they occurred, the respondent should have carried out capital work to replace the pump and met that cost from reserve funds.

50. The respondent submitted that the wording of the invoices showed they related to a variety of work to an underground water tank, pumps and valves. For ex- ample, the May 2023 invoices related to cleaning the tank, and the January 2023 issue related to a call-out following a report that [NAME] had no water. The pump was replaced and the invoice on 29 June 2023 was for this work. Any previous work to the pump was a “patch repair” which was a reasonable re- sponse to problems to mechanical breakdowns.

51. Decision. These invoices relate to work which properly fell with the respondent’s repairing obligations and the costs of which could be passed onto the leasehold- ers through their service charges. There is nothing on the face of the invoices to suggest the work was not undertaken. There is no comparable evidence to show the work could have been procured at lower cost - although the applicant sug- gested, without providing evidence, that a pump could be bought for £90-£200 and fitted for £60-£180.

52. A landlord or management company acts reasonably for the purposes of s.19 LTA 1985 if it acts on the advice of specialist contractors, even if that advice is incorrect: [COMPANY] v [NAME] and others [2022] UKUT 282 (LC); [2023] H.L.R.

8. In this case, the contractors advised the repairs set out in the invoices, and it is hard to see why the respondent should overrule them. But in any event, it is sheer speculation that a ‘stitch in time [might have] saved nine’. Although the applicant says (with the benefit of hindsight) the pump should

have been replaced earlier, there is no evidence to suggest this was apparent at the time the bulk of the repair costs were incurred. Section 19(1)(a) LTA 1985 is tested at the date the costs were incurred, not with the benefit of hindsight.

53. The PHD engineering costs were therefore reasonably incurred for the purposes of s.19(1) LTA 1985.

Reserve Funds 26. Since at least 2021/22 the [NAME] service charges had included a contribution of £7,407 to as a “renewals sinking fund” of a “contribution to reserve” [p.200] [p.238]. However, in 2023/24, this was increased to £24,919 [p.323]. The increase first took effect as part of the budget for that service charge year. But since the increased figure of £24,919 also appears in the end of year service charge accounts, the reserve fund contributions fall to be considered as part of the 2023/24 ‘end of year’ service charges.

54. The applicant suggested a threefold increase in contributions to [NAME] reserves was unjustified. A detailed maintenance plan and justification was required. In his Reply §26/28 [p.37], the applicant accepted a reserve fund was necessary, but the correct procedure had not been followed. The respondent should iden- tify the particular works involved, and if necessary, consult under s.20 LTA 1985. In oral argument, the applicant suggested that since the [NAME] was only 14 years old, it did not need such high contributions. Mr [NAME] witness state- ment also raised specific issues with the threefold increase to the [NAME] reserve fund, which was based on “unjustified projects”.

55. The respondent submitted that under para 11 of Pt.1 of Sch.4 to the [NAME] the respondent had an obligation to create “such reserves as [it] may deem prudent from time to time”. Its statement of case suggested the reserve policy was set by the respondent as part of the CAPEX plan for the site. The 2025 budget cov- ering letter [p.177] explained the reason for increasing the reserve for 2023/24: “While reserve allocations for most schedules have been reduced, two

blocks—[NAME] 1/25 and [ADDRESS] 11/29—have seen necessary increases due to planned remedial works over the next five years. These works will cover essential balcony repairs, external mainte- nance, etc. This proactive approach ensures we are financially prepared to maintain the [NAME] at the high standards you expect. This information was repeated to the applicant in an email from a Development Manager at [NAME] dated 24 October 2024 [p.392]: “We are anticipating approximately £100,000 to £130,000 worth of works over the next five years as an estimate, These projected costs in- clude repairs and maintenance for areas such as the balconies, externals, internals, potential pump replacements, and roof repairs, among others. The increase in reserves is to ensure we have the necessary funds to cover these future requirements. As for the increase in reserves for [NAME], as we discussed in our Teams call, this is part of our long-term maintenance plan. I was hoping to explain this in person to you and any other residents who may have concerns. I've put in extensive work to develop this long-term plan, and I'm happy to discuss it further if you'd Like. Some of these details were also provided to you in the covering letter for the budget when it was is- sued.” 56. Decision. Although for smaller developments, it might be reasonable to estimate contributions to reserves without any kind of long-term maintenance plan, this is certainly considered best practice by the management profession. Para 7.5 of the RICS Residential Service Charge Management Code (3rd Ed) states: “You should also recommend your clients to have a costed, long-term mainte- nance plan that reflects stock condition information and projected income streams. This should be made available to all leaseholders on request and any potential purchasers upon resale. The level of contributions for simple schemes should be assessed with refer- ence to the age and condition of the building and likely future cost estimates. On more complicated developments, the assessment should reference a

comprehensive stock condition survey and a life-cycle costing exercise, both undertaken by appropriate professionals. The usual method of working out how much money is to go into the fund each year, assuming the [NAME]/tenancy agreement does not make any other provi- sion, is to take the expected cost of future works, including an allowance for VAT and fees, and divide it by the number of years which may be expected to pass before it is incurred. The level of contributions should be reviewed annu- ally, as part of the budget process, and the underlying survey information should be reviewed at appropriate intervals. This will vary for each scheme depending on complexity, age, condition and the relative size of funds held.”

57. In this case, the respondent has not provided a copy of any costed, long-term maintenance plan. But the tribunal finds, on the evidence of the email of 24 October 2024, that the managing agents did prepare a five-year plan before they advised an increase in the 2023 reserve fund contributions. Once again, the applicant has not provided any evidence of his own that the costs over the five-year period would have been significantly less than the agents provided for. Indeed, it is not all that sur- prising that the reserve fund contributions had to be increased significantly. It is common ground there had been a long-term freeze on reserve fund contributions in place before 2023/24 – and the accounts showed significant calls on the reserve fund for [NAME] in both 2021/22 and 2022/23 [p.241] and [221].

58. In the circumstances, the reserve fund element of the 2023/24 [NAME] service charges was reasonably incurred under LTA 1985 s.19(1)(a).

Costs: s.20C LTA 1985 and para 5A Sch.11 CALRA 2002 59. The applicant ticked both boxes on the application form indicating that he wished to seek orders under s.20C LTA 1985 and para 5A of Sch.11 to the Commonhold and Leasehold Reform Act 2002.

60. The case law and principles are summarised in [NAME] v Jam Factory [2013] UKUT 0592 (LC) at [51] to [58] In Schilling v [COMPANY]/26, HHJ Rich stated at [14] that: “In service charge cases, the “outcome” cannot be measured merely by whether the applicant has succeeded in obtaining a reduction. That would be to make an Order “follow the event”. Weight should be given rather to the de- gree of success, that is the proportionality between the complaints and the Determination, and to the proportionality of the complaint, that is between any reduction achieved and the total of service charges on the one hand and the costs of the dispute on the other hand.”

61. In this instance, the applicant has succeeded on one issue out of nine. The balcony glass relates to one year out of several years challenged. The applicant has achieved a reduction of £68, which is relatively minor when compared to the totality of the charges. Then proportionality consideration in [NAME] points to no order being made under s.20C or para 5A. The tribunal also notes the difficulties with the hear- ing bundle, which were ultimately the responsibility of the applicant. The tribunal declines to make orders limiting the recovery of costs under s.20C LTA 1985 or para 5A of Sch.11 to the 2002 Act.

Conclusion 62. The tribunal determines that the applicant is not liable to pay the sum of £68 in- cluded in the 2022/23 [NAME] service charges for balcony glass works. Save for that item, the application is dismissed. The tribunal also declines to make any orders under s.20C LTA 1985 or para 5A of Sch.11 to the 2002 Act.

Judge Mark Loveday 22 October 2025

Appeals

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to rpsouth- [EMAIL] to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party mak- ing the application is seeking.