First-tier Tribunal Extends Manager's Contract and Approves Heat Meter Installation

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : MAN/00CG/LVM/2018/0001 MAN/00CG/LVM/2019/0001 MAN/00CG/LVM/2019/0002 MAN/00CG/LSC/2019/0014 MAN/00CG/LVM/2020/0002 MAN/00CG/LDC/2020/0016 MAN/00CG/LSC/2020/0036 MAN/00CG/LVM/2024/0600 Property : [NAME], 69 [ADDRESS] [POSTCODE] Applicant : [redacted] : [COMPANY]- [NAME] [NAME] Respondents : [redacted] (2) P.[COMPANY]

(2) [NAME] of Application : Appointment of a Manager -Landlord and Tenant Act 1987– Section 24(9)

Tribunal Members : Tribunal Judge [NAME] Tribunal Member [NAME] of Determination : 18th June 2025 Date of Decision : 8th July 2025

DECISION

© 2025 CROWN COPYRIGHT

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Decision

1. The Management Order appointing [NAME] as the manager of [NAME] is extended until 31st March 2028.

2. The Management Fees for this period are: Y/E 31.3.2026 £20376 + VAT Y/E 31.3.2027 £21395 + VAT Y/E 311.3.2028 £22465 + VAT

3. The flats numbered 10A, 10B and 10C, being formerly a retail unit within [NAME], are now included in and subject to the Management Order.

4. The duties of the Manager are extended to effect the installation of a bulk heat meter to each of the boilers installed at [NAME] as set out in the report of [COMPANY], dated 31st July 2024.

Application

5. This is an application, dated 29th October 2024, by the Tribunal appointed manager of [NAME] (“[NAME]”), Mr [NAME]: (1) For his appointment as manager to be extended for a further 3 years, to 31st March 2028, (2) for his remuneration for those 3 years to be approved, (3) for Flats 10A, 10B and 10C to be included within the Management Order, and (4) for the Tribunal to approve works relating to the Common Heating System (CHS).

6. The Respondents to the application are the long leaseholders of [NAME] (“the Leaseholders”) and the landlord, [RESPONDENT] (“the Landlord”).

7. The Tribunal issued directions on 17th March 2024, providing for the filing of statements, bundles and the provision for an inspection and hearing.

8. The Tribunal inspected [NAME] in the presence of the Applicant, [APPELLANT], the Applicant’s brother and who assists in the management of [NAME] and Mr [COUNSEL] representative, [COUNSEL]. The leaseholders and Landlord did not attend the inspection or hearing. The Landlord’s representative sent in a letter to the Tribunal setting out its position in relation to the various issues.

3 Background

9. There is a complex history and there have been several applications relating to [NAME], both in respect of its management and service charges arising from works required to satisfy an enforcement notice issued by South Yorkshire Fire Service.

10. A Management Order was made in respect of [NAME] on 8th December 2014. Mr [NAME] was appointed as manager for [NAME] in 2019 following the illness of a previous manager and, during his tenure, has overseen significant works at [NAME]. He seeks a further extension to his appointment, that expired on 31st March 2025, for a further 3 years to enable him to resolve the issues with the CHS and to continue to deal with the day- today management of [NAME]. In addition, Mr [NAME] seeks approval of his remuneration for those 3 years.

11. [NAME] comprises two buildings, one being a conversion and the second a new build, the latter having 47 apartments of which 43 are on the CHS.

12. An issue that has been considered by the Tribunal over several applications is the CHS and how the heating provided to the Common Parts can be monitored and recorded such that the cost can then be included within the service charge. The Tribunal has previously determined that such cost will be payable by all those liable for the service charge and not just the leaseholders in the new build section of [NAME]. At present there is no method of recording this usage. It is a matter considered on appeal by HHJ Robinson in the Upper Tribunal (LRX/166/2012).

13. Mr [NAME] has commissioned a report from [COMPANY] which proposes meters are installed that will accurately record the heat consumed in the common parts thus allowing the cost to be calculated and charged to the leaseholders.

14. The Tribunal is also asked to include flats 10A, 10B and 10C within the Management Order. At the time when the original Management Order was made the flats were then a retail unit. At some point it was converted to the 3 flats, but no amendment was made to include them within the Management Order. Mr [NAME] has requested they now be included.

15. The application has been served upon all the leaseholders and no objections have been received; there have been some e-mails supporting Mr [RESPONDENT] continued appointment.

4 16. The Landlord, via its solicitors, has agreed the application regarding the extension of Mr [NAME] appointment for a further 3 years, the inclusion of flats 10A, 10B and 10C within the Management Order and the approval of his remuneration. There is also approval of the proposed metering system for CHS but the Landlord “remains of the opinion that it is entitled to charge retrospectively for heat supplied to the new building, as it is possible to determine the total amount of heat used in the flats by way of the installed meters. Any other heat lost from the common heating system is chargeable as a service charge pursuant to the definition of Part II Services in Schedule 8 Clause 1.1.3 of the Lease”.

Hearing and Submissions

17. In his written statement to the Tribunal Mr [NAME] outlined the work he had undertaken in the management of [NAME] since his appointment in 2019 and the works completed. He confirmed that in addition to the works required to the CHS, there are also issues with the flat roof on the new building along with the general day to day management of [NAME].

18. Mr [NAME] confirmed his remuneration for the next 3 years, in the event his appointment was confirmed would represent a 5% uplift each year on his existing charges resulting in fees as follows:

Y/E 31.3.2026 £20376 + VAT Y/E 31.3.2027 £21395 + VAT Y/E 311.3.2028 £22465 + VAT

19. Mr [NAME] confirmed he sought the inclusion of Flats 10A, 10b and 10C for the reasons already stated and to enable him to manage [NAME] as one unit.

20. The report from [COMPANY] confirmed the complexities of the CHS serving 43 of the flats in the new build section of [NAME]. The flats 10aA 10B and 10C are not on the CHS. However, of those that are, flats 18, 18B and 18C receive only hot water. Flats 19-45 receive both heating and hot water.

21. On the current system there is no means of measuring the heat used in the common parts such that it cannot be included within the service charge. The consequence of this is the Landlord bears responsibility for this cost.

22. The proposal is that the heat emanating from the boiler is measured by heat meters, the software then being able to measure the heat consumed in the common parts. This would be achieved by the meters computing the cost of

5 the heat delivered to the Buildings Heat Distribution System and then deducting the summation of the heat consumed in all the flats. The flats are all individually metered to enable this to be done and were replaced in 2023.

23. The estimate for this work was £10,000 + VAT but Mr [NAME] confirmed up- dated estimates would be required.

Determination

24. The Tribunal determines the application for the extension of Mr [NAME] appointment for a further 3 years is granted. There have been no objections to the continued appointment. At the inspection, the Tribunal noted [NAME] appeared well maintained. The Tribunal finds that pursuant to section 24(9) of the Landlord & Tenant Act 1987 (“the 1987 Act”) the continued appointment is just and convenient when considering the circumstances and history of [NAME]. This not only includes the work necessary to resolve the outstanding issues with CHS, but also the continued maintenance of [NAME].

25. The proposed remuneration for the appointment for the next 3 years, until 31st March 2028, is also approved. The increase is considered reasonable and the fees specified will also include the additional 3 flats referred to.

26. The Tribunal also determines the 3 flats numbered 10A, 10B and 10C are now included within the Management Order. This is to enable Mr [NAME] to manage [NAME] as a whole. The Tribunal considers it is only by reason of the retail unit having been converted after the Management Order was made in 2014, that these flats have been omitted. It is therefore pursuant to section 24(3) of the 1987 Act that such as order is made.

27. The Tribunal noted that in his decision of 24th July 2024 Tribunal Judge Rimmer extended the duties of the Manager under the Management Order as follows:

1. To maintain repair and replace as and when reasonably required the metering devices in place in those apartments in the new build section of [NAME] monitoring, or intending to monitor, and recording heat usage in those apartments relating to the common heating system.

2. To install, repair and maintain, as and when he is able to do so, an adequate metering system to record the heat passing into and leaving from the common parts of the building through which the common heating passes.

3. To collect the service charge for the supply of heat to the common parts of [NAME] by the common heating system if and when an adequate metering system has been installed.

6 4. The manager shall be responsible for and entitled to recover his reasonable costs for effecting the appropriate administration of the common heating system to include updating details of leaseholders responsible under the terms of the lease for the charges, the reading of meters, the correct application of charging rates and the recovery of arrears.

28. The Tribunal considers that the Management Order having been amended in 2022 further amendments are not required, other than to provide for Mr [NAME] to be permitted to install the metering system as recommended by [COMPANY] in accordance with his report dated 31st July 2024.

29. The Tribunal notes the report provides a solution to the long-standing issue of calculating the cost of heating to the common parts. The report is supported by Mr [NAME] and no objections to it have been received from either the leaseholders nor the Landlord. The Tribunal therefore finds the solution proposed within the report is an “adequate metering system”, as required by the Tribunal’s decision of 24th July 2022, that will enable the Applicant to recover the heating costs via the service charge.

30. The Tribunal considered the submissions made by the Landlord of its ability to charge retrospectively for the heat supplied to the new building. This matter has been considered on earlier occasions. HHJ Robinson referred to it in her decision as referred to above. This was then referred to by Tribunal Judge Rimmer in his review dated 3rd October 2022 where he stated as follows:

4.This Tribunal is not satisfied that there is anything within that Upper Tribunal decision, nor in what it heard at the hearing of this application, to suggest that if and when sufficient recording apparatus is installed there is any entitlement to charge retrospectively for the heat supplied prior to the installation.”

31. There is nothing which has been said to the Tribunal within this application to support any view different from that expressed by Tribunal Judge Rimmer.

7 Annex 1: Leaseholders

Mr G P & Mrs [NAME] M Davy

1 [NAME] Mr [NAME]

2 [NAME] Mr [NAME] P [NAME]

3 [NAME] [NAME]

4 [NAME] Mr [NAME]

5 [NAME] Ms J M & [NAME]

6 [NAME] [NAME]

7 [NAME] Mrs [NAME] and Mr [NAME]

8 [NAME] Mr & Mrs [NAME]

9 [NAME] Mr [NAME] & Ms [NAME] [NAME]

10 [NAME] Mr [NAME] [NAME]

11 [NAME] [NAME] & [NAME]

12 [NAME] [NAME] & Mr T F Brewer

14 [NAME] Mr [NAME]

15 [NAME] Mrs [NAME] J [NAME]

16 [NAME] Dr & Mrs [NAME]

17 [NAME] [NAME]

18 [NAME] Mrs [NAME]

19 [NAME] J P & C J Theodorson

20 [NAME] [NAME]

21 [NAME] [NAME]

22 [NAME] Mr [NAME]

23 [NAME] [NAME]

24 [NAME] [NAME]

25 [NAME] [NAME]

26 [NAME] [NAME]

27 [NAME] [NAME] [NAME]

28 [NAME] Ms [NAME] [NAME]

29 [NAME] [NAME]

30 [NAME] [NAME]

31 [NAME] [NAME]

32 [NAME] Mr [NAME] [NAME]

33 [NAME] [NAME]

34 [NAME] [NAME]

35 [NAME] [NAME]

36 [NAME] [NAME] [NAME]

37 [NAME] Mr [NAME]

38 [NAME] [NAME]

39 [NAME] [NAME] & [NAME]

40 [NAME] [NAME]

41 [NAME] [NAME]

42 [NAME] Mr [NAME]

43 [NAME]

8 [NAME]

44 [NAME] [COMPANY]

45 [NAME] [NAME]

46 [NAME] [NAME]

47 [NAME] [NAME]

48 [NAME] Mr [NAME] [NAME]

49 [NAME] [NAME]

50 [NAME] [NAME]

51 [NAME] Mr [NAME]

52 [NAME] [NAME]

53 [NAME] Ms [NAME] [NAME]

54 [NAME] [NAME] & Mrs A [NAME]

55 [NAME] Mr [NAME] J [NAME]

56 [NAME] Mr [NAME]

57 [NAME] Mr [NAME] H Dickinson

58 [NAME] Mr [NAME] A [NAME]

59 [NAME] [COMPANY]

60 [NAME] [NAME]

61 [NAME] [NAME]

62 [COMPANY]

63 [NAME] [NAME] & [NAME] EM

64 [NAME] [NAME] & [NAME]

65 [NAME] Mrs [NAME]

66 [NAME] Mr [NAME]

67 [COMPANY]

68 [NAME] [NAME]

69 [NAME] Mrs [NAME] [NAME]

70 [NAME] [NAME]

10A [NAME] [NAME]

10B [NAME] [NAME] and [NAME]

10C [NAME] [NAME]

18A [NAME] [NAME]

18B [NAME] [NAME]

18C [NAME] [NAME]

18D [NAME]