First-tier Tribunal Invalidates Service Charge Demand for Non-Compliance

OUTCOME: Allowed

FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case reference : LON/00BK/LSC/2019/0304 [NAME] : [ADDRESS] [POSTCODE] Applicant : [redacted] Mrs [COUNSEL] : [NAME] [COUNSEL] – as a litigant in person Respondent : [redacted] : [NAME] [COUNSEL] Associate Director- on behalf of [COMPANY] ( [NAME]) [NAME] [NAME] of [NAME] :

For the determination of the reasonableness of and the liability to pay a service charge Tribunal members : Judge [NAME] [NAME] and Venue : On 18 December 2019, 10 am at 10 [ADDRESS] [POSTCODE] Date of decision : 31 January 2020

DECISION

Decisions of the tribunal (1) The tribunal makes the determinations as set out under the various headings in this Decision (2) The tribunal makes an order under section 20C of the Landlord and Tenant Act 1985 [so that none of the landlord’s costs of the tribunal proceedings may be passed to the lessees through any service charge]. (3) The tribunal determines that the Respondent shall pay the Applicant’s [NAME] and hearing fees of £300.00 within 28 days of this Decision, in respect of the reimbursement of the tribunal fees paid by the Applicant The [NAME]

1. The Applicant seeks a determination pursuant to s.27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) as to the amount of service charges payable by the Applicant in respect of the service charge year 2019/20.

2. An oral case management hearing took place on 10 September 2019 in which directions were given and the matter was set down for a hearing.

3. The relevant legal provisions are set out in the Appendix to this decision. The hearing 4. The First Applicant appeared in person at the hearing and the Respondent was represented by [NAME] [RESPONDENT] who is an Associate Director of the [COMPANY]. She also had a witness [NAME] [APPELLANT], a building surveyor.

5. The Applicant [NAME] [COUNSEL], who is a commercial [NAME], had prepared written submissions which he gave to the Tribunal at the beginning of the hearing. The Respondent’s representative made no objection to this document.

6. Although the hearing had been listed for 2 days all of the parties agreed that the matter could be concluded on the first of the two days listed for the hearing. The background 7. The [NAME] which is the subject of this [NAME] is a converted office building which had previously been occupied by an insurance company. It was converted into self-contained flats in the 1990’s, including the creation of additional floors at roof level. The Applicants had a [NAME] of a three bedroom flat situated on the second floor. At some point after the [NAME] had been converted the landlord had changed the basement into a service flat.

8. The Applicants hold a long [NAME] of the [NAME] 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 [NAME] will be referred to below, where appropriate. The issues 9. At the start of the hearing the parties identified the relevant issues for determination as follows: (i) The identity/name of the [NAME]/landlord (ii) Whether the service charges were payable or alternatively whether they were invalid on the grounds that the Landlord had failed to comply with Section 48 of The Landlord and Tenant Act 1987. (iii) Whether the service charge had been demanded in compliance with the requirements of the [NAME]. (iv) Whether the sums demanded for the reserve funds were payable under the terms of the [NAME]. (v) Whether on a construction of the [NAME] the Applicant was obliged to contribute to the costs of repairs to the roof (vi) Whether the Tribunal should make an order under section 20 C of the Landlord and Tenant Act 1985 for the reimbursement of the [NAME] and hearing fees. (vii) The reasonableness and payability of the service charges for 2019/20. [NAME] [NAME] also raised an issue concerning the contents, of the section 20 notices, in that he stated that the subject matter of the notices related to improvements.

10. 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. The Identity of the Landlord 11. In his submissions [NAME] [RESPONDENT] stated that the Respondents have confirmed the identity of the [NAME] is [COMPANY]. [NAME] [NAME] referred the Tribunal to a number of documents, in particular the survey report prepared by [NAME] dated 24 January 2019, which referred to [NAME] ([ADDRESS]) [COMPANY] as the party who had commissioned the report, and the fact that the accounts referred to the service charge money being held in trust under titles which included [COMPANY]. The Tribunal

was also referred to the section 20 notice dated 1 November 2010 which referred the [NAME] to [NAME] for the purpose of consultation.

12. The Land Registry title and the [NAME] were in the name of [COMPANY].

13. In his submissions [NAME] [NAME] noted that-: “This is a matter which is of some importance in the light of the propensity of the Landlord to send Service Charge notices in a variety of different names and now to be demanding very significant sums to be allocated to the [NAME]. In email correspondence the Landlord has been invited to explain the position and the relationship between the [NAME] and the [NAME]. No explanation has been provided to the Tribunal.” 14. [NAME] [NAME] stated that although the service charge demands were served on behalf of [NAME], this was a subsidiary company which was owned by [NAME] who was the actual client who instructed the [NAME] to act on their behalf. The tribunal’s decision and reasons for the decision 15. The tribunal determined that the service charge demands on the information before us, did not comply with section 48 of the Landlord and Tenant Act 1987. In accordance with the terms of the Act the demand was not payable. The Tribunal also noted that section 1 of the Landlord and Tenant Act 1985 also made it a summary offence not to provide the details of the landlord.

16. However, given that the landlord could reissue the demands, the Tribunal decided that it was appropriate and proportionate to deal with the other issues so that the parties would have the benefit of the Tribunal’s decision on these issues in the event that the demands were reissued in compliance with Section 48 of the Landlord and Tenant Act 1987. Service charge/ the additional rent 17. The Service Charge in the [NAME] was provided for as “Additional Rent” In his submissions [NAME] [RESPONDENT] stated that-: “The landlord has covenanted to “keep the Retained Premises in good and tenantable repair”: Paragraph 1(b) of the Fifth Schedule of the [NAME]... By virtue of the Seventh Schedule the landlord is entitled to recover by way of additional and further rent the costs of complying with the obligations in the Fifth Schedule and also, inter alia, the cost of maintaining repairing or renewing the lift: paragraphs 1 and 10 Seventh Schedule: … Paragraph 2 of the Fourth Schedule of the [NAME] … makes provision for the payment of the “additional rent” i.e. the service charge. This is to be paid by

one instalment in advance on the 29th September in each year free of deductions in advance and is to be paid on account of the additional rent.

18. Clause 2 of the Fourth Schedule of the [NAME] provided that “… on account of such additional rent herein mentioned such sum as shall be certified by an [NAME] as reasonably required by the landlord or its agent and notified to the tenant… and as soon as possible following the end of each such financial year the Landlord shall provide the Tenant with a summary of such expenses certified by an [NAME] or Surveyor…” 19. [NAME] [NAME] noted the wording of the [NAME]. However, she stated that she had not come across this position before. It was accepted that the service charges demand was payable in advance and as such it was an estimate. The lack of certification had not been seen as an issue. She accepted that the demand had not been certified in advance.

20. In the Respondent’s Statement of Case it was stated in paragraph 1-: “However, we believe that the necessity to have the demand certified by a Chartered Accountant relates to any balancing demand which is levied following the production of any end of year accounts…” The tribunal’s decision and reasons for the tribunal’s decision 21. The Tribunal has noted the very clear and unambiguous wording of the [NAME]. We find that on the admission of [NAME] [NAME] the service charge demand was not certified in advance. The Tribunal therefore accepts [NAME] [NAME] submission that -: “The demand is accordingly invalid not being made in accordance with the terms of the [NAME].” 22. We find that the service charge is not payable in accordance with the terms of the [NAME].

23. In accordance with our earlier decision, the Tribunal decided that it was proportionate and appropriate to consider the issue of the reasonableness of the service charges, so that the parties would have the Tribunal’s determination on all of the issues in dispute.

Service charge/ Management fees 24. The total management fees for the period in issue were £4,574.00 of which the Applicant’s share of the charges was 15%. 25. [NAME] [APPELLANT] in his submissions asserted that -: “The [NAME] requires [under the Fourth Schedule paragraph 2] that the expenditure should be

reasonable/reasonably and properly incurred. No evidence of the reasonableness of the demand has been produced.” 26. [NAME] [NAME] referred to the lack of market testing of the reasonableness of the management fees.

27. In their reply the Respondent stated that the management fee was calculated of £749.00 per flat per annum inclusive of VAT. This included a [NAME] [NAME] manager as well as the work undertaken by teams such as the accounts and credit control and maintenance team. She stated that although there was a separate charge for work in connection with the section 20 consultation procedure, where this work was abortive fees had not been charged. 28. [NAME] [NAME] was asked about whether he had any issues with the work undertaken by the [NAME] agent. He stressed that he was not unhappy with the work undertaken.

29. In relation to the work undertaken for section 20 consultation, the Tribunal asked whether this was charged separately, and if so was there a menu of charges that was given to the [NAME]/landlord under the management agreement? 30. [NAME] [RESPONDENT] referred the Tribunal to the service charge accounts where professional fees had been charged. She stated that there was a menu of charges. The normal charge was 2% of the cost of the work, she stated that whilst [NAME]? fees would be included she did not think the [NAME] agent would make a charge in respect of the section 20ZA major work (2017). [NAME] [NAME] was asked by the Tribunal to provide a copy of the management agreement together with the schedule of charges to [NAME] [NAME] within 21 days of the decision. The tribunal’s decision and reasons for the tribunal’s decision 31. The Tribunal in reaching its decision noted that there was no complaint concerning the work undertaken by the [NAME] agent. We also had no comparable evidence from [NAME] [NAME] upon which we could reference in comparison to the management charges at the building. As one of the Applicants, [NAME] [NAME] bears the evidence burden in relation to this issue.

32. As a Tribunal our experience was that the charge itself was somewhat higher than those that we might have seen for other properties, however we had no evidence that any alternative [NAME] agent working in this area would be prepared to undertake management for less.

33. There is in general no obligation on the landlord that it has to procure services from the cheapest contractor this is not what is required for the cost to be considered “reasonably and properly incurred”. Accordingly we find that the sum of £749.00 per flat per annum inclusive of VAT is reasonable and payable.

34. The Tribunal finds that the cost of management fees associated with section 20 notices upon which no work is undertaken is not reasonable or payable. Service charge/ Professional fees 35. The professional fees for the 2019/20 period were £5,000.00, [NAME] [NAME] referred to the demand. He stated that this was an entirely new item in the budget and that it was included in the service charge demand with no additional explanation.

36. However in his submissions he now accepted that -: “The explanation now given is in paragraph 4 of the Respondent’s Statement of Case …. The explanation is that the lift equipment has reached the end of its serviceable life, “the system is obsolete”. The fees relate to a “specialist engineer to oversee the lift refurbishment”. He did not accept that the lift was obsolete. He cited the fact that the director of the [COMPANY] had been attempting to upgrade the lift for many years as it provided access to the director of the company’s penthouse. 37. [NAME] [NAME] referred the Tribunal to correspondence between the [NAME] and the [NAME] concerning this issue, some of which had been included in the bundle. He further placed reliance upon paragraph 2 of the Fourth Schedule of the [NAME] which stated that service charge expenses should be reasonably and properly incurred.

38. There had been a section 20 notice served in respect of a lift replacement (on 3 July 2012) by the previous [NAME] [NAME]. One of the [NAME] had asked to see “the last Report of thorough Examination of Lifting Equipment”. The report from Bureau Veritas issued on 24/02/2012 had recommended some work be undertaken which had not amounted to a full replacement of the lift. No information had been provided at that time that lift replacement was less costly than the recommended repairs.

39. The Veritas report had indicated that Ambassador Lifts had not been inspecting and maintaining the lift in accordance with the maintenance contract. The cost of the lift maintenance contract was £1,500.00.

40. In reply [NAME] [NAME] accepted that it had proved very difficult to establish the extent of the condition of the lift. She referred to her discussions with [NAME] which was set out in her letter dated 9 July 2018. In the letter she stated-: “Please note that following discussions with [NAME] who service the lift on a regular basis, we have been advised that the current lift installation has reached an age where it is now obsolete.” [NAME] [NAME] had written an email objecting to this proposal and had suggested refurbishment. 41. [NAME] [NAME] had then commissioned a safety evaluation which was carried out by [NAME] of Independent Safety Evaluation on 11 November 2018; his report

had included a 12 point refurbishment plan which could be undertaken which was short of Ambassador’s suggested replacement.

42. There was an invoice for £1,500 plus VAT incurred for his report. 43. [NAME] [NAME] stated that provision had been made for an asbestos report which was why the charge was £5,000.00. The tribunal’s decision and reasons for the tribunal’s decision 44. The Tribunal was provided with no evidence upon which it could be satisfied that £5,000.00 costs were to be incurred. The Tribunal noted that there was a considerable dispute concerning the need for replacement of the lift. In respect of the professional fees the Tribunal was satisfied that the sum of £1,500 plus VAT had been incurred for the professional fees of [NAME] [NAME]. Accordingly the Tribunal finds the sum of £1,800.00 inclusive of VAT is reasonable and payable. Service charge/ General Maintenance 45. The Tribunal was informed by [NAME] [NAME] that the sum of £2,000.00 was included in the budget as an estimate of the likely charges for maintenance during the course of the year. She referred to 2018 when the Respondent had undertaken work on the coping stones. [NAME] [RESPONDENT] stated that he would prefer this matter to be dealt with as a balancing charge given the circumstances of this case. The tribunal’s decision and Reasons for the tribunal’s decision 46. The Tribunal in reaching its decision has borne in mind that the actual charges for General Repairs and Maintenance in 2018 was £3,019.00 accordingly the budgeted sum is in line with previous expenses at the premises.

47. Accordingly the Tribunal finds the sum of£2,000.00 which was the budge estimate for the repairs was reasonable and payable. Service charge/ Communal Electricity 48. The communal electricity was £1,450.00. The Respondents in their statement of case set out that an inspection report by an electrician prepared in 2019 revealed that for some time there had been an abstraction of electricity from the communal supply for the benefit of [NAME] [RESPONDENT] the director of the [COMPANY]. His flat was on the sixth, seventh and eighth floors and the basement. This was accepted by [NAME] [RESPONDENT], and a repayment is due to the landlord, which will then be credited to the [NAME]. However the issue in dispute was the sum to be reimbursed.

49. In his submissions, [NAME] [NAME] stated-: “…the response is not credible and the proposals for reimbursement rely on the Respondent reaching a view as to what should be reimbursed. The Respondents now offer a different approach …. The problem is that it needs to be independently verified and at the Respondent’s expense. In the circumstances here it is not satisfactory to have the Respondent decide how much electricity has been used by the basement apartment and what sum will then be transmitted to the service charge fund in order to recompense for the years of abstraction of electricity.” The tribunal’s decision and reasons for the tribunal’s decision 50. The Tribunal noted that the Respondent’s position was that as the abstraction of electricity had now been remedied the bills which were not produced could be used to calculate the rebate by establishing the difference. However although this would produce some information, the Tribunal considers that given the history of this matter, and the relationship that [NAME] [NAME] has with the freehold company, the correct way of establishing the charge would be to commission an independent electrician to undertake an assessment, the cost of this should be payable by the landlord.

51. As this exercise is yet to be undertaken, the Tribunal cannot be satisfied that the cost of £1,450.00 is reasonable. Accordingly the Tribunal is not satisfied that the total sum of £1450.00 is a reasonable estimate of the budgeted sum for communal electricity. Service charge/ Roof and Gutter clearance 52. [NAME] [NAME] pointed the Tribunal to the deed of variation which made [NAME] [NAME] responsible for repairs and maintenance of the roof.

53. In his submission, [NAME] [NAME] set out that-: “The Applicants are only liable for services charges in respect of the “retained premises”: see the Second Schedule of the [NAME] …and the Seventh Schedule paragraph 1 …(Bp.42) and the Fifth Schedule paragraph 1(c) ...” 54. [NAME] [NAME] set out that the planned work was undertaken on the landlord’s retained [NAME]. The work involved the clearance of the gutters which were blocked. It was considered by the [NAME] that this work was largely preventive in that the carrying out of the work stopped the blocked gutters causing leaking and causing damage to the flat below. The tribunal’s decision and reasons for the tribunal’s decision 55. The sum claimed for this item is £2,200. The Tribunal understands this to be the budgeted sum for this work which means that if the sums are not committed they will be reimbursed. The Tribunal is satisfied in the absence of any contrary estimates that the sum of £2,200 is reasonable and payable in respect of work of repair and clearing the gutters, should it be necessary to undertake work then

the [NAME] agent will provide details of the expenditure in the accounts, supported if necessary by invoices. Service charge/ The [NAME]

56. In his submissions [NAME] [NAME] stated in paragraphs 18- 21 that -: “…The [NAME] makes provision for a [NAME] in Clause 4(ii)… and in paragraph 3 of the Fifth Schedule … The purpose of the [NAME] is to ensure that the additional rent (the Service Charge) does not “fluctuate unduly from year to year”. The Fifth Schedule paragraph 3 is the covenant by the Landlord to provide a “reasonable” [NAME] in accordance with Clause 4(ii) if “reasonably” required in accordance with advice tendered by the Landlord’s [NAME] or surveyors. No such advice has been disclosed and no evidence of the reasonableness of the sum claimed has been provided. The approach being taken by the Landlord produces exactly the opposite outcome to that intended by Clause 4(ii) of the [NAME]. The claim for £60,000 produces an undue fluctuation in the Service Charge as described above. “ 57. [NAME] [NAME] submitted that although the [NAME] provided discretion for the landlord to levy a service charge for future works by use of a [NAME]; this was not an unfettered discretion. He noted in his written submissions that the Respondent had not addressed the requirement for the sums of money claimed as a reserve in their statement of case. 58. [NAME] [NAME] [NAME] relied upon the evidence of [NAME] [NAME] in support of the provision for the [NAME]. She referred to the fire escape at the premises. She stated the [NAME] used [NAME] as part of a group of surveyors who undertook work. She was asked about the relationship between the landlord and [NAME]. She stated that they were amongst a group of surveyors used on the landlord’s [NAME], and that they provided continuity in respect of the landlord. 59. [NAME] [RESPONDENT] stated that a specification was to be produced as the building was in poor condition. [NAME] had commissioned Hallas to carry out a survey. [NAME] [NAME] stated that he had carried out a survey and he referred to the photographs that were in the bundle. He stated that based on his inspection the exterior of the premises was in need of repair, the fire escape was considered to be in a dangerous condition. He also referred to the windows of the [NAME] which were in poor decorative condition, with wet rot and bare timber, some of the window frames would need to be replaced.

60. He stated that there had been four tenders for the work. He referred to a specification which was prepared by [NAME]. There was provision for scaffolding for access, repairs and redecoration to the windows and the asphalt to the flat roof, repointing, the renewal and repair of masonry and iron work and work to the fire escape and the emergency lighting.

61. [NAME] [NAME] referred to email correspondence from [NAME] who queried the need for work to the fire escape. He asserted that based on the inspection of the fire escape, the [NAME] contended that the fire escape did not need to be replaced as it could be painted. The tender report contained three quotations one from [COMPANY] of £73,267.00, and CLC in the sum of £123,474.00 and MNM in the sum of £143,876.00.

62. The previous [NAME] [NAME] had in 2017 stated the landlord’s intention to commission [RESPONDENT] to carry out internal decoration.

63. In his submissions [NAME] [NAME] did not dispute that some work was necessary. He stated-: “ …The Applicants do not dispute that works of maintenance and repair are required to the building. However, they object to:

(1) the misuse of the [NAME] contributions provisions which produces an enormous hike in the Service Charge for one year;

(2) the process for producing the tenders/quotations for works which is not transparent and lacks specificity.”

The tribunal’s decision and reasons for the tribunal’s decision 64. The Tribunal in its decision noted that the [NAME] does not oblige the landlord to have a [NAME]; the purpose of the fund is to anticipate the planned maintenance needed for the building.

65. This means that even though the [NAME] provides for a reserve (set out) in paragraphs 2 of the fourth schedule and paragraph 3 of schedule five, irrespective of the clauses which provide for the reserve the landlord is obliged under the terms of the [NAME] to carry out the work of planned maintenance and renewal of the fabric of the building.

66. The issue is whether the fluctuation in demand means that the landlord is not entitled to collect the sums for the reserve.

67. The Tribunal noted that in previous years there had been an under collection of the sums needed for future work to the building. Given this the Tribunal places no reliance on the previous sums contributed to the reserve as they were wholly insufficient to meet the cost of the work to the building.

68. The Tribunal cannot accept [NAME] [NAME] interpretation that in attempting to build up the [NAME] this would cause a greater level of undue fluctuation of the service charges (which could be collected in advance and as a balancing payment) than if the Respondent abandoned the [NAME] and decided to recover the charges by [NAME] direct demands for the whole of the sums payable for the major work.

69. The Tribunal has heard that very little work has been carried out by way of maintenance on the building and that the specification for major works was prepared in 2017, this means that in the interim the condition of the building is likely to have deteriorated. The Tribunal accepts that major work will be needed and that any sums collected by way of reserve will be off set against the final demand. Accordingly the Tribunal finds the sums demanded reasonable and payable. [NAME] under s.20C and refund of fees 70. At the end of the hearing, the Applicant made an [NAME] for a refund of the fees that he had paid in respect of the [NAME]/ hearing1. Having heard the submissions from the parties and taking into account the determinations above, the tribunal orders the Respondent to refund any fees paid by the Applicant [within 28 days of the date of this decision].

71. In the [NAME] form and at the hearing, the Applicant applied for an order under section 20C of the 1985 Act. Having heard the submissions from the parties and taking into account the determinations above, the tribunal determines that it is just and equitable in the circumstances for an order to be made under section 20C of the 1985 Act, so that the Respondent may not pass any of its costs incurred in connection with the proceedings before the tribunal through the service charge.

72. Although the Tribunal has made determinations of the reasonable sums which are payable for 2019/20 we are mindful that the sums claimed are reasonable but only payable at such time as the respondent complies with statutory requirements and the terms of the [NAME]. The Tribunal also notes that the sums claimed may alter when the accounts have been prepared for this year.

Name: Judge Daley

Date: 31.01.2020

1 The Tribunal Procedure (First-tier Tribunal) ([NAME] Chamber) Rules 2013 SI 2013 No 1169

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 [NAME] for permission must be made to the First-tier 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 [NAME] 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).

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, (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. Section 20 (1) Where this section applies to any qualifying works or qualifying long term agreement, the relevant contributions of tenants are limited in accordance with subsection (6) or (7) (or both) unless the consultation requirements have been either— (a) complied with in relation to the works or agreement, or (b) dispensed with in relation to the works or agreement by (or on appeal from) the appropriate tribunal . (2) In this section “relevant contribution”, in relation to a tenant and any works or agreement, is the amount which he may be required under the terms of his [NAME] to contribute (by the payment of service charges) to relevant costs incurred on carrying out the works or under the agreement. (3) This section applies to qualifying works if relevant costs incurred on carrying out the works exceed an appropriate amount. (4) The Secretary of State may by regulations provide that this section applies to a qualifying long term agreement— (a) if relevant costs incurred under the agreement exceed an appropriate amount, or (b) if relevant costs incurred under the agreement during a period prescribed by the regulations exceed an appropriate amount.

(5) An appropriate amount is an amount set by regulations made by the Secretary of State; and the regulations may make provision for either or both of the following to be an appropriate amount— (a) an amount prescribed by, or determined in accordance with, the regulations, and (b) an amount which results in the relevant contribution of any one or more tenants being an amount prescribed by, or determined in accordance with, the regulations. (6) Where an appropriate amount is set by virtue of paragraph (a) of subsection (5), the amount of the relevant costs incurred on carrying out the works or under the agreement which may be taken into account in determining the relevant contributions of tenants is limited to the appropriate amount. (7) Where an appropriate amount is set by virtue of paragraph (b) of that subsection, the amount of the relevant contribution of the tenant, or each of the tenants, whose relevant contribution would otherwise exceed the amount prescribed by, or determined in accordance with, the regulations is limited to the amount so prescribed or determined.] Section 20B (1) If any of the relevant costs taken into account in determining the amount of any service charge were incurred more than 18 months before a demand for payment of the service charge is served on the tenant, then (subject to subsection (2)), the tenant shall not be liable to pay so much of the service charge as reflects the costs so incurred. (2) Subsection (1) shall not apply if, within the period of 18 months beginning with the date when the relevant costs in question were incurred, the tenant was notified in writing that those costs had been incurred and that he would subsequently be required under the terms of his [NAME] to contribute to them by the payment of a service charge. Section 20C (1) A tenant may make an [NAME] for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before a court, residential [NAME] tribunal or the Upper Tribunal, or in connection with arbitration proceedings, are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant or any other person or persons specified in the [NAME]. (2) The [NAME] shall be made— (a) in the case of court proceedings, to the court before which the proceedings are taking place or, if the [NAME] is made after the proceedings are concluded, to a county court;

(aa) in the case of proceedings before a residential [NAME] tribunal, to that tribunal; (b) in the case of proceedings before a residential [NAME] tribunal, to the tribunal before which the proceedings are taking place or, if the [NAME] is made after the proceedings are concluded, to any residential [NAME] tribunal; (c) in the case of proceedings before the Upper Tribunal, to the tribunal; (d) in the case of arbitration proceedings, to the arbitral tribunal or, if the [NAME] is made after the proceedings are concluded, to a county court. (3) The court or tribunal to which the [NAME] is made may make such order on the [NAME] as it considers just and equitable in the circumstances.