First-tier Tribunal Determines Reasonableness of Service Charges

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FIRST-TIER TRIBUNAL

PROPERTY CHAMBER

(RESIDENTIAL PROPERTY)

Case reference : CAM/26UK/LSC/2019/0014

Property : [ADDRESS], 534 – 536 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Mr [COUNSEL] – Counsel instructed by

[COUNSEL] Solicitors and Ms [COUNSEL]

[NAME] Administrator for the

Applicant

Respondent: [redacted]

In person with his father [NAME]

[RESPONDENT] of [NAME] :

For the determination of the

reasonableness of and the liability to

pay a service charge

Tribunal members :

Tribunal Judge Dutton

Mr O N Miller BSc

Venue :

The Employment Tribunal, Watford on

13th January 2020

Date of decision : 2oth January 2020

DECISION

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Decisions of the tribunal

(1) The tribunal determines that the sum of £1,646 is payable by the

Respondent in respect of the service charge for the year 2016.

(2) The tribunal determines that the sum of £2,295 is payable by the

Respondent in respect of the service charge for the year 2017.

(3) The counterclaim made by the respondent was without detail and it

does not appear that any court fee was paid. If the respondent wishes

to pursue this element, he will need to apply to the County Court. Since

the tribunal has no jurisdiction, in this [NAME], over county court

costs and fees and this matter is now be referred back to the County

Court at Watford in claim number E8QZ18X2.

The [NAME]

1. The Applicant seeks a determination pursuant to s.27A of the Landlord

and Tenant Act 1985 (“the 1985 Act”) against the Respondent in respect

of the service charge years 2016 and 2017 .

2. Proceedings were originally issued in the County Court at Watford under

claim no. E8QZ18X2. The claim was transferred to this tribunal, by

order of Deputy District Judge Duncan 4th January 2019.

3. The relevant legal provisions are set out in the Appendix to this decision.

The hearing

4. At the hearing the Applicant was represented by Mr [COUNSEL], Counsel

and Ms [COUNSEL] and the Respondent appeared in person accompanied by

his father

The background

5. The property, which is the subject of this [NAME] is a flat on the top

floor of a 5 storey purpose built property with a covered car park at

basement level. There are two conjoined buildings, [ADDRESS] and

[ADDRESS].

6. The tribunal inspected the property before the hearing in the company

of [NAME], [NAME] and Mr [NAME] and his father. We had the

opportunity of inspecting the car park area, which sits in the basement

level under both buildings. It appeared that each flat in the two buildings

has a designated car parking space. Entrance was controlled by an

electric shutter, with a door to the side. At this level were two lifts, now

working.

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7. Inspection of the common parts showed them to be in good decorative

order and relatively clean, although the cleaning rota did not appear to

be completed. It was drawn to our attention that the lifts had been out of

action for some time but were now working, although according to Mr

[RESPONDENT] senior one lift was noisy and not fluent in its operation. The

entrance mat to the block was in poor condition. There was evidence of

some water ingress at the top floor adjacent to the roof lights.

8. Externally the grounds, which were limited, appeared to be in neat order

and a fence to the rear of the property had recently been replaced.

9. The Respondent holds a long lease of the property which requires the

landlord to provide services and the tenant to contribute towards their

costs by way of a variable service charge. The specific provisions of the

lease are not in dispute.

The issues

10. At the start of the hearing the parties identified the relevant issues for

determination as follows:

(i) The payability and/or reasonableness of service charges for the

years 2016 and 2017. The applicants sought to recover later years

but the claim transferred to us by the Court relates to 2016 and

2017 only. The respondent had accepted that the service charges

demanded for 2019 were due and owing and had paid them and

had settled outstanding ground rent and insurance

contributions.

(ii) The claim in the country court included a counterclaim said to

relate to the lost rental income that the respondent said he could

have achieved had the lifts been working. It seems that the lifts

had been out of action for a number of years and were only

working properly from 2019. The counterclaim had no

particulars other than a reference to the lost rental income and

was not quantified in any way. It was not a matter we could deal

with so will be remitted back to the Court for the respondent to

decide whether he wishes to pursue same.

11. Having heard evidence and submissions from the parties and considered

all of the documents provided, the tribunal has made determinations on

the various issues as follows.

Service charge year 2016 and 2017

12. The difficulty we faced in determining the [NAME] was the failure of

the respondent to comply with the directions issued by the tribunal on

27th June 2019. These required the respondent to complete a schedule of

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items in dispute setting out the reasons for such challenge and providing

alternative costings. He failed to do so for either year in dispute.

13. His evidence was limited to a witness statement, unsigned, purported to

be dated 21st December 2019. This statement told us the respondent had

purchased the flat in 2014 knowing that the lift serving his block was not

working. This had caused him difficulties in furnishing the flat and after

some time in occupation he vacated and attempted to sell/rent the flat.

He made various allegations against the Applicant which we noted. The

statement went on to indicate an attempt to meet with the applicant to

resolve the issues but to no avail. It should be noted however, that

amongst the papers provided to us before the hearing are two emails of

relevance. The first is dated 22nd November 2017 and follows from a

meeting the respondent had with Mr [APPELLANT], the applicant’s accountant,

when it is suggesting that the respondent confirmed he would be [NAME]

payments to clear the outstanding amounts. This was followed by an

email from the respondent dated 4th January 2018 indicating that he

would settle the sums due from the sale proceeds of the flat.

14. In fact that sale did not take place and the respondent explained that the

offer to pay was dependant on the sale proceeding and had been agreed

with the buyer.

15. The statement went on to deal with the medical issues affecting him, with

which we have much sympathy. He told us that he had eventually been

able to rent his flat to the Council, after having been empty for 18 months

or so, but at a much reduced rent. In his summary he says this “In a

nutshell the [NAME] has a complete disregard for the law, rules and

regulation and Health & Safety of the occupants in the building.

Tenants and leaseholders are fearful of the [NAME]’s legal and

financial might and retaliatory action. I have lost nearly 18 months

void period rent and had a profound impact on my health and

wellbeing.”

16. For the applicant we had three witness statements from Ms [APPELLANT], copies

of the accounts for 2016 and 2017 and a skeleton argument prepared by

Mr [NAME]. In the skeleton an [NAME] was floated under rule 8(2(e) of

the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules

2013 as a result of the failure by the respondent to comply with the

directions.

17. The skeleton did go on to respond to the concerns relating to the lifts. It

was said that the management company [COMPANY]

was without funds to attend to the problems with the lifts. When the

company took over management of the building, it seems in June 2016

investigations had to be undertaken into flooding issues which effected

the lift pits. These investigations and repairs having been undertaken the

pits had to be allowed to dry and in 2018 s20 consultation took place

leading to the repair of the lifts in January 2019.

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18. We did undertake a review, as best we could, of the some of the heads of

expenditure for the two years. We had been told by the respondent that

when [RESPONDENT] took over the service charges doubled but that he was now

happy with the state of affairs at the building, hence his payment of the

2019 charges. No contribution had been made to earlier years although

the ground rent and insurance charges had, we were told, been met.

19. We discussed the management charges, water and sewerage costs,

cleaning. The management fee is £259 per unit. The costs associated with

the water were the charges for investigating the flooding issues in the car

park, which seemed to stem from leaking pipes allegedly caused by

misuse of the drains by occupiers. The cleaners may be changed and it

was accepted that the cleaning attendance sheets were not being

completed by the present cleaners. However, [NAME] can review the

cleaning by use of CCTV, which perhaps somewhat surprisingly was

partially installed before the lifts were repaired.

20. [NAME] told us that [ADDRESS] was occupied by tenants of

[NAME], who were the leaseholders and there were now no

arrears of service charge for that block. [ADDRESS], which appears

to house 26 flats we were told that only 3 were in arrears, including the

respondent and that [RESPONDENT] had set up a reserve fund from 2019.

The tribunal’s decision

21. In the absence of any meaningful challenge to the service charges for

these two years we find that they due and owing in the sums claimed. It

appears that the respondent has not lived at the block since 2016, when

the service charges were withheld. We noted his complaint concerning

the lack of lift and the impact this had on his ability to let the flat. He

produced no evidence of this to us and we cannot make any finding on

any set off or counterclaim.

22. As we indicated above, we did undertake a partial review of some of the

heads of service charges in the hope that it might provide some

assistance to the respondent. At first glance questions might be raised

about some of the costs. However, it is not for us to make the

respondent’s case for him. He raised no specific issues, other than the lift

and accordingly the applicant was not in a position to respond to any

matters at the hearing, as it did not know what was disputed.

23. In those circumstances we find that the service charges for 2016 and 2017

are due and owing and should be paid within the next 28 days. No

[NAME] under s20C of the Act was made by the respondent and

indeed had it been in the circumstances it would have been rejected.

24. It will be the court to decide any [NAME] for costs and for the

respondent to decide whether he wishes to proceed with his

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counterclaim. These matters will be remitted back to the County Court

at Watford.

Name: Tribunal Judge Dutton Date: 20th January 2020

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property

Chamber) Rules 2013, the tribunal is required to notify the parties about any

right of appeal they may have.

If a party wishes to appeal this decision to the Upper Tribunal (Lands

Chamber), then a written [NAME] for permission must be made to the Firsttier

Tribunal at the regional office which has been dealing with the case.

The [NAME] for permission to appeal must arrive at the regional office

within 28 days after the tribunal sends written reasons for the decision to the

[NAME].

If the [NAME] is not made within the 28-day time limit, such [NAME]

must include a request for an extension of time and the reason for not

complying with the 28-day time limit; the tribunal will then look at such

reason(s) and decide whether to allow the [NAME] for permission to appeal

to proceed, despite not being within the time limit.

The [NAME] for permission to appeal must identify the decision of the

tribunal to which it relates (i.e. give the date, the property and the case number),

state the grounds of appeal and state the result the party [NAME] the [NAME]

is seeking.

If the tribunal refuses to grant permission to appeal, a further [NAME] for

permission may be made to the Upper Tribunal (Lands Chamber).

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Appendix of relevant legislation

Landlord and Tenant Act 1985 (as amended)

Section 18

(1) In the following provisions of this Act "service charge" means an

amount payable by a tenant of a dwelling as part of or in addition to

the rent -

(a) which is payable, directly or indirectly, for services, repairs,

maintenance, improvements or insurance or the landlord's

costs of management, and

(b) the whole or part of which varies or may vary according to

the relevant costs.

(2) The relevant costs are the costs or estimated costs incurred or to be

incurred by or on behalf of the landlord, or a superior landlord, in

connection with the matters for which the service charge is payable.

(3) For this purpose -

(a) "costs" includes overheads, and

(b) costs are relevant costs in relation to a service charge

whether they are incurred, or to be incurred, in the period

for which the service charge is payable or in an earlier or

later period.

Section 19

(1) Relevant costs shall be taken into account in determining the

amount of a service charge payable for a period -

(a) only to the extent that they are reasonably incurred, and

(b) where they are incurred on the provisions of services or the

carrying out of works, only if the services or works are of a

reasonable standard;

and the amount payable shall be limited accordingly.

(2) Where a service charge is payable before the relevant costs are

incurred, no greater amount than is reasonable is so payable, and

after the relevant costs have been incurred any necessary

adjustment shall be made by repayment, reduction or subsequent

charges or otherwise.

Section 27A

(1) An [NAME] may be made to the appropriate tribunal for a

determination whether a service charge is payable and, if it is, as to

-

(a) the person by whom it is payable,

(b) the person to whom it is payable,

(c) the amount which is payable,

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(d) the date at or by which it is payable, and

(e) the manner in which it is payable.

(2) Subsection (1) applies whether or not any payment has been made.

(3) An [NAME] may also be made to the appropriate tribunal for a

determination whether, if costs were incurred for services, repairs,

maintenance, improvements, insurance or management of any

specified description, a service charge would be payable for the

costs and, if it would, as to -

(a) the person by whom it would be payable,

(b) the person to whom it would be payable,

(c) the amount which would be payable,

(d) the date at or by which it would be payable, and

(e) the manner in which it would be payable.

(4) No [NAME] under subsection (1) or (3) may be made in respect

of a matter which -

(a) has been agreed or admitted by the tenant,

(b) has been, or is to be, referred to arbitration pursuant to a

post-dispute arbitration agreement to which the tenant is a

party,

(c) has been the subject of determination by a court, or

(d) has been the subject of determination by an arbitral tribunal

pursuant to a post-dispute arbitration agreement.

(5) But the tenant is not to be taken to have agreed or admitted any

matter by reason only of having made any payment.