First-tier Tribunal Determines Uncommitted Service Charges for Residential Buildings

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case reference : LON/00AR/LUS/2025/0004 Properties : 1-[ADDRESS] & 13-[ADDRESS] & 25-33 [ADDRESS] [POSTCODE] Applicants : [redacted] (2) 13-24 [COMPANY] (3)25-33 [COMPANY] : Mr [COUNSEL], [NAME] Respondent : [redacted] : N/A Type of application : s.94(3) Commonhold and Leasehold Reform Act 2002 - uncommitted service charges Tribunal : Judge [NAME] of hearing Date of Decision : 24 March 2026 25 March 2026

DECISION

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The tribunal’s summary decision

(1) The tribunal finds the total estimated sum of uncommitted service

charges (including insurance and reserve fund) in respect of the subject

properties to be £88, 394.62.

(2) The tribunal directs that this sum is to be passed over to the applicants

within 14 days of the date of this decision.

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The application

1. These are 3 consolidated applications seeking the tribunal’s

determination of the global estimated uncommitted service charges

pursuant to s.94(3) Commonhold and Leasehold Reform act 2002 (‘the

2002 Act’) in respect of the three buildings known as 1-[ADDRESS] & 13-[ADDRESS] & 25-33 [ADDRESS]

[POSTCODE] (‘the premises’).

. Background

2. In a decision dated 27 February 2025, the tribunal granted the

applicants the right to manage the subject properties at 1-[ADDRESS] & 13-[ADDRESS] & 25-33 [ADDRESS]

[POSTCODE] (the premises’) with effect from 27 May 2025. Since, that date

the respondent has however, failed to participate in a handover of all

relevant documents and monies held in respect of the management of

the buildings or the service charges.

The hearing

3. An oral hearing was held on 24 March 2026 at which the applicants were

represented by Mr [RESPONDENT], [NAME] Manager. The respondent

did not attend and was not represented. The applicants provided the

tribunal with a hearing bundle which included a joint Statement of Case

and Schedule of Estimated Uncommitted Service Charges. No evidence

was provided by the respondent despite the tribunal’s Directions dated

3 November 2025.

The tribunal’s reasons

4. Section 94 of the 2002 Act provides:

94 Duty to pay accrued uncommitted service charges

(1) Where the right to manage premises is to be acquired by a

RTM company, a person who is—

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(a) landlord under a lease of the whole or any part of the

premises,

(b) party to such a lease otherwise than as landlord or

tenant, or

(c) a manager appointed under Part 2 of the 1987

Act to act in relation to the premises, or any premises

containing or contained in the premises,

must make to the company a payment equal to the

amount of any accrued uncommitted service charges held

by him on the acquisition date.

(2) The amount of any accrued uncommitted service charges is

the aggregate of—

(a) any sums which have been paid to the person by way

of service charges in respect of the premises, and

(b) any investments which represent such sums (and any

income which has accrued on them),

less so much (if any) of that amount as is required to meet

the costs incurred before the acquisition date in

connection with the matters for which the service

charges were payable.

(3) He or the RTM company may make an application

to the appropriate tribunal to determine the amount of

any payment which falls to be made under this section.

(4) The duty imposed by this section must be complied with on

the acquisition date or as soon after that date as is reasonably

practicable.

5. In reaching its decision the tribunal took into consideration the

applicants’ documentary evidence and the oral evidence of Mr [NAME] on

the figures included in the Schedule, that the applicants relied upon to

provide estimated figures of £44,617.54 (service charges including

insurance) and £39,600 (reserve fund). The tribunal accepts the

applicants’ figures, albeit subject to minor adjustments to accurately

reflect the pro-rated percentage attributable to each party in the

service charge year 25/12/2024 to 24/12/2025 for charges incurred on

a monthly basis e.g. cleaning and gardening.

6. The tribunal accepted the applicants’ assertions that the whole of the

insurance premiums collected from the [NAME] were not incurred

by the respondent as these charges were in fact to be paid for buildings

insurance commencing January 2026. The tribunal also finds that with

effect from that date the applicants have insured the buildings in their

names with the [NAME].

7. In the absence of any objection by, or evidence from the respondent, the

tribunal finds from the documents provided, that on the balance of

probabilities the respondent has, since its acquisition of the premises in

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about 2012, demanded payment of a reserve fund in the annual

sum of £100 per [NAME]. The tribunal finds there was no evidence

to establish that this sum had been expended to defray all or some of the

major works costs. Therefore, the tribunal finds the respondent holds the

sum of £39,600 in respect of a reserve fund for the subject properties.

8. In estimating the amount of the uncommitted service charges the

tribunal was assisted by, albeit surprised to learn that despite the

tribunal’s decision, a demand for service charges dated 28 May 2025 was

sent out by the respondent to the [NAME].

9. In conclusion, the tribunal finds the total estimated sum of uncommitted

service charges (including insurance and reserve fund) in respect of the

subject properties to be £88, 394.62 (see Appendix I). The tribunal also

directs that this sum is to be handed over to the applicants within 14 days

of the date of this decision.

Name: Judge Tagliavini

Date: 25 March 2026

5 Appendix I

Ref: LON/00AR/LUS/2025/0004 1-12 [COMPANY] 13-24 [COMPANY] 25-33 [COMPANY] [COMPANY] 01 Jan 25 to 31 Dec 2025 RTM from: Proportion of year: 27-May-25 Days (27/5/2025 - 31/12/2025): 219 60.00% Budget 2025 Pro rata @ 60% Insurance £17,772.14 £17,772.14 Common parts electricity £2,600.00 £1,560.00 Common Parts cleaning £7,400.00 £4,440.00 Common parts gardening £6,250.00 £3,750.00 Window cleaning £2,250.00 £1,350.00 Gutter cleaning £550.00 £550.00 Intercom line rental £1,900.00 £1,140.00 CCTV Line Rental £1,400.00 £840.00 Fire H&S Testing etc £1,650.00 £990.00 Drains services £1,500.00 £1,500.00 CCTV Maintenance and repairs £2,700.00 £1,620.00 Annual bin hire £600.00 £0.00 Annual Spring parking £300.00 £180.00 Carpet cleaning £500.00 £500.00 Fire H&S risk assessment £800.00 £800.00 Fire door inspection £1,500.00 £1,500.00 Accountant £1,710.00 £1,710.00 Management fee Dec 2024/25 £9,820.80 £5,892.48 Repair fund (if needed) £4,500.00 £2,700.00

Total required for year £65,702.94 £48,794.62

Reserve fund £39,600.00

Total £88,394.62

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Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME] 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 application for permission must be made to the First- tier Tribunal at the [NAME] which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber The application for permission to appeal must arrive at the [NAME] within 28 days after the Tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the [NAME] and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).