First-tier Tribunal Reduces Unreasonable Service Charges for Tenants

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case references : LON/00AS/LSC/2024/0144 LON/00AS/LSC/2024/0215 LON/00AS/LSC/2024/0216 LON/00AS/LSC/2024/0259 LON/00AS/LSC/2024/0260 LON/00AS/LSC/2025/0606

Properties : Flats 1, 2, 3 & 6 [NAME], Flat 3 [NAME], Flat 4 [NAME], [ADDRESS], [POSTCODE] Applicants :

[redacted] (2) [NAME] (Flat 2 [NAME]) (3) [NAME] (Flat 3 [NAME]) (4) [NAME] [NAME] (Flat 6 [NAME]) (5) [NAME] (Flat 3 [NAME]) (6) [NAME] (Flat 4 [NAME]) (7) [COUNSEL] (Flat 5 [NAME]) Representative : In person Respondent : [redacted] : [COUNSEL] (Counsel) instructed by [COUNSEL], Solicitors Type of [NAME] : Service Charges (section 27A Landlord and Tenant Act 1985) Tribunal members :

Judge Robert Latham John Naylor FRICS

Date and Venue of Hearing : 26 and 27 June 2025 at 10 [ADDRESS] [POSTCODE]

2 Date of decision : 29 July 2025

DECISION

Decisions of the Tribunal (1) The Tribunal makes the following deductions to the service charges which have been demanded: Applicant Issue 1 Issue 2 Issue 3 [APPELLANT] [NAME] £117.60 £194.51 £162.03 £474.14 [NAME] £117.60 £194.51 £162.03 £474.14 [NAME] [NAME] £117.60 £194.51 £162.03 £474.14 [NAME] [NAME] £117.60 £194.51 £162.03 £474.14 [NAME] £304.17 £194.51 £162.03 £660.71 [NAME] £304.17 £194.51 £162.03 £660.71 [NAME] [NAME] £77.35 £194.51 £162.03 £433.89

(2) The Tribunal determines that the Respondent shall pay the Applicants £200 within 28 days of this Decision, in respect of the reimbursement of 25% of the tribunal fees which they have paid. (3) The Tribunal makes an order under section 20C of the Landlord and Tenant Act 1985 so that only 75% of the landlord’s costs of the tribunal proceedings may be passed to the tenants through any service charge. (4) The Tribunal also makes an order pursuant to paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 restricting the ability of the Respondent from charging an administration charge in respect of its litigation costs. Bundles In this decision, the Tribunal refers to the two bundles of documents which have been produced by the parties. The Respondent were directed to provide a Hearing Bundle. References to this bundle (1,275 pages) will the prefixed by "HB.__". The Applicants have produced an additional bundle which extends to 950 pages. Reference to this will be prefixed by "A.__"). This includes a number of photographs. The Applicants have also provided a number of videos. and videos.

3 Introduction

1. The Tribunal is required to determine six applications brought by seven tenants who hold leases at four blocks at [ADDRESS], [POSTCODE] who seek a determination of the payability and reasonableness of the service charges pursuant to section 27A of the Landlord and Tenant Act 1985 ("the Act"). The [NAME] relates to the sums charged for cyclical works (Issue 1); the service charges for 2023/24 (Issue 2) and the interim service charges payable for 2024/25 (Issue 3). The service charge accounts for 2024/25 are not yet available. 2. [ADDRESS] is a development of 24 residential one bedroom flats across five blocks. [NAME] and [NAME] have six flats on three floors. [NAME] and [NAME] have 4 flats on two floors. The fifth block, with which the Tribunal is not concerned, is Sovereign House which has four flats. All the tenants pay a service charge of 4.167%.

3. The development was completed in 1994. The flats originally had wooden sash windows. Northcote Housing Association Limited granted shared ownership leases to the tenants. There have been a number of changes in the identity of the landlord. On some unspecified date, [RESPONDENT] ("[NAME]") acquired the freehold interest. On 1 April 2022, [NAME] became a subsidiary of the Respondent. Four of the tenants have "staircased up" and now own 100% of the beneficial interest in their flats. [NAME] [NAME] is one of these tenants.

4. The following are parties to this [NAME]: (i) [NAME] [NAME] (Flat 1 [NAME]). He acquired his lease in September 2013.

(ii) [NAME] [NAME] (Flat 2 [NAME]).

(iii) [NAME] [NAME] (Flat 3 [NAME]).

(iv) [NAME] [NAME] [NAME] (Flat 6 [NAME]). He acquired the lease in October 2003. He is a sales engineer. He occupies his flat on his own.

(v) [NAME] [NAME] (Flat 3 [NAME]). He is a special needs teacher. He occupies his one bedroom flat with his wife and two children. He acquired his flat in August 2014.

(vi) [NAME] [NAME] (Flat 4 [NAME]).

(vii) [NAME] [NAME] [NAME] (Flat 5 [NAME]). He acquired his lease in July 2007. He is a sales engineer. He occupies his flat on his own.

5. The parties have provided a Scott Schedule (HB.92-114). This raises a total of 46 service charge items which are challenged. Ms [NAME] comments that this

4 is a "wholly unhelpful document" in trying to identify the substance of the Applicants' complaints. She has provided a summary of the items challenged for the service charge year 2023/24 and the interim service charge for 2024/25. However, there are 31 challenges to cyclical works which were carried out between July and October 2022. Confusion has arisen because the Respondent initially apportioned the costs attributable to the five individual blocks. The Respondent then recognised that this was not in accordance with the terms of the leases. The charges were then reissued apportioning the cost of the works equally between the 24 flats. However, because of the delays that had occurred, the Respondent recognised that no tenant could be required to pay more; rather a refund was made to those tenants who had been overcharged.

6. The three lead tenants, [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME], have jointly made a witness statement (at HB.337-344). [NAME] [NAME] has taken the initiative preparing the case for the Applicants. Unfortunately, due to the untimely death of his wife, [NAME] [NAME] was unable to attend the hearing. Her funeral was held on the first day of the hearing. The tenants were anxious for their [NAME] to proceed in his absence. [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME] attended the hearing and gave evidence on behalf of the Applicants. [NAME] [NAME] attended on the second day of the hearing. [NAME] [NAME] provided a Skeleton Argument. 7. [NAME] [NAME] complained that it was wrong that tenants who only had a 30% share in the equity of their flat, should be required to pay 100% of the service charge. The Tribunal explained that this was the contractual position as provided in the lease. Further, it was the standard model for shared ownership leases in England. If this is considered to be unfair, this is a matter for the Regulator of Social Housing and/or [NAME]. It is not a matter for this Tribunal.

8. Ms [COUNSEL] (Counsel) appeared on behalf of the Respondent. She was accompanied by both Ms [COUNSEL] and [NAME] [COUNSEL] from her instructing solicitor, [COUNSEL]. She adduced evidence from Ms [RESPONDENT], the Respondent's Service Charge Specialist (statement at HB.293-303); Ms [RESPONDENT], the Respondent's Regional Home Ownership Manager for North West London (statement at HB.304-311) and Ms [RESPONDENT] [NAME], the Respondent's Project Manager (statements at HB.688-690 and HB.312-316). Ms [NAME] provided a Skeleton Argument and a Bundle of 15 authorities.

9. The Applicants have come together because they are concerned about the level of the service charges that they have been required to pay. This has been instigated by the cost of a programme of cyclical repairs. They also complain of the quality of the works. Their attack is unfocussed. Their witness statement extends to just 8 pages. Their witness statement does not address the numerous photographs in their bundle of 1,275 pages and the videos which they have provided.

10. The Applicants are litigants in person. However, they must recognise that they must identify the issues that they require the tribunal to determine and prove their case as to why the service charges are not payable or are unreasonable.

5 11. Ms [RESPONDENT] states that the Respondent's approach has at all times been to engage constructively by responding to the Applicants’ queries, providing documentation, and addressing, within these proceedings, as many of the points made as can practically be achieved. The Respondent approached the hearing in the same vein in the hope of a more constructive relationship moving forward. The Leases 12. The Tribunal has been provided with the leases for Flats 1 and Flats 6 [NAME]; Flat 3 [NAME]; and Flat 4 [NAME]. Although the Tribunal has stated that all tenants are required to pay a service charge of 4.167%, this is not strictly correct. The lease for Flat 6 [NAME] specifies a percentage of 0.04167% and that for 4 [NAME] a percentage of 0.4167%. The parties accepted that these are manifest errors and 4.167% is the correct percentage for all leases.

13. The "Buildings" are defined as including the five blocks. Thus the 4.167% service charge extends to the costs of repairing, decorating and repairing any of the five blocks.

14. By Clause 3 (2)(c), the Leaseholder covenants to pay the Service Charge in accordance with Clause 7. Clause 7 (2) contains a covenant on the part of the Leaseholder to pay the Service Charge during the Term by monthly equal payments in advance on the first day of each month. The "Service Charge" is defined in Clause 7 (1)(d) as the "Specified Proportion of the Service Provision". The "Specified Proportion" is defined as ‘the proportion specified in the Particulars”, namely 4.167%.

15. Clause 5 sets out the Landlord's covenants. Clause 5(2) is a covenant to insure the Buildings. By Clause 5 (3), the Landlord covenants to maintain, repair and decorate the roof, foundations, main structure of the Buildings, and all external parts including the windows and doors (but excluding the glass).

16. The "Service Provision" (by Clause 7 (4)) is calculated by an estimate of the expenditure likely to be incurred in a relevant year together with an amount towards a reserve. Clause 7 (5) provides as follows; "The relevant expenditure to be included in the Service Provision shall comprise all expenditure reasonably incurred by the Landlord in connection with the repair, management, maintenance and provision of services for the Building…" and includes specifically the cost of the Landlord’s performance of covenants contained in Clauses 5 (2), 5 (3) and 5 (4). As soon as practicable after the end of each Account Year the Landlord determines whether the estimate has exceeded or fallen short of the actual expenditure in the Account year (clause 7 (6)). The Law

6 17. Section 18 of the Landlord and Tenant Act 1985 (“the Act”) defines the concepts of “service charge” and “relevant costs”: “(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 [NAME] 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 estimate costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with matters for which the service charge is payable.” 18. Section 19 gives this Tribunal the jurisdiction to determine the reasonableness of any service charge: “(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 provision 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.” 19. The Supreme Court has recently reviewed the approach that should be adopted by tribunals in considering the reasonableness of service charges in [NAME] v [NAME] GP [COMPANY] [2023] UKSC 6; [2023] 2 WLR 484. Lord Briggs JSC (at [14]) recognised that the [NAME] of a demand for payment of a service charge will have required the landlord (or manager in this case) first to have made a number of discretionary management decisions. These will include what works to carry out or services to perform, with whom to contract for their provision and at what price, and how to apportion the aggregate costs among the tenants benefited by the works or services. To some extent the answers to those questions may be prescribed in the lease, for example by way of a covenant by the landlord to provide a list of specified services, or by a fixed apportionment regime. But even the most rigid and detailed contractual regime is likely to leave important decisions to the discretion of the landlord. A landlord is contractually obliged to act reasonably. This is subject to this Tribunal’s

7 jurisdiction under the 1985 Act to determine whether the landlord acted reasonably (see [33]).

20. The Tribunal highlights the following passage from the judgment of Martin Rodger KC, the Deputy President, in Enterprise Home Developments LLP v Adam [2020] UKUT 151 (LC) at [28]: "Much has changed since the Court of Appeal’s decision in [NAME] 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."

21. Section 20 of the Act requires a landlord to consult in respect of and “qualifying works” where the relevant contribution of any tenant will exceed £250. The consultation requirements applicable in the present case are contained in Part 2 of Schedule 4 to the Service Charge (Consultation Requirements) (England) Regulations 2003. A summary of these is set out in the speech of Lord [NAME] in [COMPANY] v Benson [2013] UKSC 14; [2013] 1 WLR 854 at [12]: Stage 1: Notice of Intention to do the Works: Notice must be given to each tenant and any tenants’ association, describing the works, or saying where and when a description may be inspected, stating the reasons for the works, specifying where and when observations and nominations for possible contractors should be sent, allowing at least 30 days. The landlord must have regard to those observations. Stage 2: Estimates: The landlord must seek estimates for the works, including from any nominee identified by any tenants or the association. Stage 3: Notice about Estimates: The landlord must issue a statement to tenants and the association, with two or more estimates, a summary of the observations, and its responses. Any nominee’s estimate must be included. The statement must say where and when estimates may be inspected, and where and by when observations can be sent, allowing at least 30 days. The landlord must have regard to such observations. 4: Notification of reasons: Unless the chosen contractor is a nominee or submitted the lowest estimate, the landlord must, within 21 days of contracting, give a statement to each tenant and the association of its reasons, or specifying where and when such a statement may be inspected. The Background 22. In 2019, the development was being managed by [NAME]. The time had come for a programme of external repairs and decorations ("cyclical repairs"). The landlord arranged for the development to be inspected by [RESPONDENT] from [COMPANY] ("[NAME]"). His inspection report, dated 11 January 2019, is at HB.691-722. He noted that the windows were timber framed double glazed sash units. They

8 were in a poor condition with chipped and flaking decoration. Numerous glazing units had failed. There were isolated areas of wet rot. He recommended that the windows be replaced with new UPVC double glazed units.

23. On 5 April 2019, [NAME] served a Stage 1 "Notice of Intention" on the tenants (at HB.595-596). The tenants were notified of the proposal to replace the windows with double glazed UPVC units. [NAME] balloted the tenants on the preferred colour on the inside of the new windows. The external face was to be brown as existing. Eleven of the 24 tenants responded to the ballot. On 12 December 2019, [NAME] served a "Notice of Estimates". However, this was later withdrawn. Apparently, the tenants were told that the cost of the works would be some £105k (exc VAT).

24. On 24 February 2020, [NAME] held a meeting with the tenants to discuss a number of concerns that had been raised. Ms [NAME] attended the meeting. The minutes of the meeting are at HB.725-727. Tenants were concerned about the cost of the works and the payment plan that was being offered. Tenants queried whether it would be possible to install casement, rather than sash, windows. The cost would be lower. [NAME] responded that planning consent had been sought for a "like-for-like" replacement of sash windows.

25. On 23 March 2020, the first lockdown was imposed and the works were put on hold. On 18 March 2021, [NAME] held a further meeting with tenants by zoom. The minutes are at HB.728-730. Some tenants against repeated their preference for casement windows. They again complained about the cost of the works. [NAME] responded that this should have been raised in response to the Notice of Intention. The Respondent had proceeded on the basis of like-for-like casement windows. The tenants queried why the works had not been included in the annual budget and why they could not be funded from reserves. It was agreed to omit the door entry replacement to save money.

26. In April 2021, there was a second ballot as to whether the windows should be standard top hung UPVC casement windows or UPVC sash windows. On 6 April (HB.1239), Ms [NAME] wrote to [NAME] [NAME] with estimates of the relative cost of installing top hung casement windows (£124,137) and sash windows (£153,117). The ballot closed on 14 April. Twelve tenants voted, six for each option.

27. In June 2021, [NAME] prepared a specification of works (at HB.786-791). This provided for sash windows. On 23 June 2021, [NAME] invited three contractors to quote for the replacement of the windows. Three tenders were returned (at.HB.755-7). [NAME] prepared a tender report and recommended that the Principal Contractor appoint Symphony, who had provided the lowest quote.

28. In August 2021, [NAME] prepared a further tender report for the other cyclical works (HB.758-774). Five tenders were invited and four were returned (at HB.775- 778). [NAME] recommended that [NAME]) [COMPANY] ([COMPANY]) who had provided the lowest quote be appointed as the Principal Contractor.

9 29. On 27 August 2021 (at HB.597-601), [NAME] sent out the Notice of Estimates. [NAME] informed the tenants that they had decided to proceed with sash windows. The outcome of the ballot had been a draw. [NAME] had therefore decided to proceed under the existing planning [NAME] to install "like-for- like" sash windows. Details of the estimates were provided. [NAME] proposed to appoint [COMPANY] as the Principal Contractor who had quoted £135,549 (exc VAT) and [NAME], who had quoted £144,648 to replace the windows. To this would be added VAT of 20% and professional fees of £15,000. For the six tenants at [NAME], the cost of the works would be £93,370, less a reserve fund contribution of £14,688. The estimated cost per tenant was £13,113.79.The Respondent offered a 12 month payment agreement.

30. On 23 September 2021 (at HB.602), [NAME] [NAME] responded to the consultation. He inquired why the costs had gone up by 50%.

31. On 28 February 2022, [NAME] held a further meeting with tenants. The minutes are at HB.778-785. Fifteen tenants attended. [NAME] MP also attended. The tenants queried the cost of the works. It was again suggested that casement windows would have been cheaper. A tenant suggested that the replacement of the windows was only required because of historic neglect. Tenants asked how they could afford the works. [NAME] offered a repayment plan dependent upon the financial circumstances of the individual tenants. [NAME] [NAME] states that he asked the meeting to confirm whether they preferred casement windows to the sash windows that were proposed. 14 voted for casement windows (58% of the total of 24 leaseholders). This vote did not appear in the minutes.

32. On 1 April 2022, [NAME] became a subsidiary of [NAME]. On 23 June (HB.952- 955), Ms [NAME] wrote to the tenants about the proposed works. She was the Project Manager. She has provided a detailed witness statement and gave evidence. The works started on 18 July and were completed on 21 October 2022. The communal windows were installed in the week commencing 28 November 2022. There is a substantial dispute between the parties as to the quality of the works, which the Tribunal needs to determine.

33. Ms [NAME] sates that the programme of works consisted of the following: erect scaffolding; R & D survey; clean roofs; rainwater goods overhaul; Clean soffits and fascia; replace windows and doors; mastic, masonry works and cleaning; external decorations; and strike scaffolding.

34. The final cost of the cyclical repairs was £364,777.43, namely (i) cost of works: £264,331.47; (ii) VAT: £52,866.29; + (iii) Professional fees (15%): £47,579.66. £131,000 was funded from the reserve fund. Thus the cost to be charged to tenants was £233,777.43. This should have been charged equally to the 24 flats, namely £9,740.73 per tenant.

35. On 29 January 2024, [NAME] issued the initial demands for the works (at HB.634-672). The cost of the works were incorrectly apportioned based on an equal apportionment of the works carried out to the individual blocks. This was

10 incorrect. The leases define "the buildings" as the five blocks. The cost should therefore have been apportioned equally between the 24 tenants. On 15 March 2024 (at p.650-660), [NAME] issued revised demands. This resulted in some tenants receiving a refund. However, the Respondent recognised that it was now too late to issue a supplementary demand to those who had been charged too little.

Tenant Initial Demand [APPELLANT] (1 [NAME]) £9,554.16 - £186.57 [NAME] (2 [NAME]) £9,554.16 - £186.57 [NAME] (3 [NAME]) £9,554.16 - £186.57 [NAME] [NAME] (6 [NAME]) £9,554.16 - £186.57 [NAME] (3 [NAME]) £10,484.98 £9,740.73

[NAME] (4 [NAME]) £9,907.10 £9,740.73

[NAME] [NAME] (5 [NAME]) £9,513.91 - £226.82

36. On 28 April 2024, [NAME] [NAME] issued his [NAME] to this Tribunal. His main complaint was the sum that he had been charged for these cyclical works. However, he also challenges a number of service charges for 2023/24 and the interim service charge for 20224/25. Over the subsequent weeks, tenants issued five further [NAME]. Issue 1: The Cyclical Works 37. The Applicants raised a number of wide ranging arguments as to why they are not obliged to contribute to the cost of the major works. We can deal with many of these briefly: (i) The Applicants suggest that the need for the works arises through "historic neglect". We are satisfied that for such a claim to succeed, the Applicants would need to establish a counterclaim or set-off (see [COMPANY] v White [2007] L.& T.R.4). In particular, any tenant would need to establish that he had a good claim for disrepair during the time that they were the lessee. No tenant has established this. The [NAME], dated 11 January 2019, does not suggest any widespread disrepair. It is consistent with what one would expect from wooden windows which after 25 years were nearing the end of their natural lives. (ii) The Applicants rely on Clause 3 (19) of their leases to argue that they are only liable for the cost of any repairs, insofar as the tenant caused or contributed to the disrepair by any act, neglect or default. This is to fail to understand the terms of the lease. If any individual tenant has caused any disrepair, he has a personal responsibility to make good that damage. However, the landlord is required to repair, maintain and decorate the Buildings, and this is a service charge expenditure for which all the tenants are liable.

11 (iii) The landlord failed to comply with the statutory consultation procedures. On 5 April 2019, the Respondent served the Stage 1 "Notice of Intention". At this stage, the tenants did not suggest casement windows. Neither did they suggest a contractor from whom an estimate should be sought. On 27 August 2021, the Respondent served the Stage 3 "Notice of Estimates". The Respondent had tested the market and obtained four tenders for the work as "Principal Contractor" and the for the replacement of the windows. The Respondent selected the lowest estimates. (iv) The Applicants complain of the overall cost of the works. There was an unfortunate delay in 2020 which was inevitable because of the Covid-19 lock down. However, there was no need for the Respondent to serve a further "Notice of Intention". When the Covid-19 lockdown was lifted, there was a significant increase in building costs. The Applicants were a victim of this. (v) The Applicants contend that the supervision fee of 15% was unreasonable. We disagree. It is a standard charge for works of this type. However, we have found that the supervision of this contract was inadequate (see below). We therefore reduce The professional fees of £47,579.66 by £1,000 to reflect this.

38. A particular concern raised by the Applicants, is the Respondent's decision to install sash, rather than casement, windows. All agreed that UPVC windows should replace the existing wooden sash windows. It is common ground that casement windows would have been cheaper (on 6 April 2021, Ms [NAME] had suggested that the cost would have been £124,137, as against £153,117). [NAME] [NAME] suggested that the cost would have been much cheaper and obtained a quote from Safe Style (at HB1,242) of £3,000 to install casement windows in his flat. He also obtained a quote (at HB.1243) of £350 + VAT for use of a cherry picker for 7 days. The cost of scaffolding for some 15 weeks was £30,370.

39. The Tribunal does not accept that it would have been appropriate to use a cherry picker for a job of this size. We do accept that the installation of the casement would have been somewhat cheaper, say some £30k. However, we accept that the Respondent was entitled to select sash, rather than casement, windows. Ms [RESPONDENT] stated that it was the Respondent's policy to replace windows on a like-for- like basis for possible. The tenants had only raised the issue at a late stage in the consultation process.

40. Whilst a landlord must consult its tenants, it has the ultimate discretion as to what windows should be installed (see [19] above). The landlord was required to have due regard to views expressed by the tenants; it was not bound to accept the majority view of the tenants. [NAME]'s starting point was to go for sash windows on a "like-for-like" basis. All agreed that UPVC was a more cost effective option that wood. It was only at a later stage that the tenants opted for casement windows. In April 2021, the tenants had been split 50:50 on the two options. The approach adopted by the Respondent cannot be categorised as unreasonable, albeit that the sash windows were somewhat more expensive. We are satisfied that the Respondent had regard to the financial impact of the works on the tenants.

12 41. In their Scott Schedule, the Applicants challenge 31 items relating to the cyclical works. Most relate to the quality of the works. The Applicants have provided a Bundle of 950 pages. This includes a large number of photographs. The problem that the Tribunal faces is that none of the photographs are dated. The Applicants have produced no evidence of who took the photos or the block to which they relate. They are no more than "snapshots". They show areas where works have not been done. These are often small areas in the context of a job of this size. They do not show areas where works have been done to a good standard. Some disrepair may have arisen after the works were completed. Some photos relating to general maintenance problems, rather than to the programme of cyclical works. Many of the defects may now have been remedied.

42. The photographs illustrate the following: (i) Disrepair to the brickwork (A.7-16; 895-896). (ii) Broken Vents (A.24-27). (iii) Defects to the casement windows (A.31-36). (iv) Defects to the communal doors (A.42-57, 815-818, 855-860, 867-872). (v) Disrepair to the communal lights (A.58-62). (vi) The photographs illustrate numerous defects to the new doors and windows (A.68-89, 799-803). The Tribunal notes the communal window at A.73 where a block of wood has been inserted between the base of the window and the brickwork. (vii) External fencing (A.396-415. 789-798, 805-815, 864-866, 873-878, 899- 904). (viii) Defects to gutter soffits and rainwater good (A.426-434). (ix) Pointing Defects (A.569-572). (x) Defects to the roof and guttering (A.575-625). The photograph at A.592 illustrated the debris which was left in the guttering. The photograph at A.596 illustrates dirty soffits. The photograph at A.608 illustrates a loose verge cap which required attention. (xi) Defects to the stone cills (A.651-664). (xii) Disrepair to the knee high fencing (A.786-788, 803-804,861-863) (xiii) Defects to grills (A,907-908);

13 (xiv) Moss and lichen on the roofs: [NAME] (A.911-915); [NAME] (A.918-922); [NAME] (A.925-932) and [NAME] (A.936-942). These photographs provide compelling evidence that inadequate attention was paid to cleaning the roofs.

43. The Tribunal is satisfied that the photographs depict poor finishes, bad workmanship and areas where defects still remain. Some items are fairly straight forward. For example, there is ample of evidence to suggest the roofs have not been properly cleaned. The same applies to the gutters.

44. Some of the paint from the external decorations is peeling. The Tribunal would not expect it to be peeling so soon after the works have been completed. The Applicants have provided a report from [NAME] confirming that the preparation is poor . They had sent samples to [NAME] for testing (A.781-785). 45. [NAME] [NAME] complained that there had been a problem of condensation in his flat after the new windows had been installed. We note that he is living in his one bedroom flat with his wife and two children. We suspect that the condensation problem is due to the interaction between the moisture produced within the flat and the equation of ventilation, heating and insulation. The new windows are likely to have reduced draughts from the old ill-fitting windows. We are not satisfied that the condensation relates to the negligent installation of the windows.

46. In her witness statement, Ms [NAME] gives detailed evidence of the steps taken by the Respondent to supervise the works. Snagging items were identified and addressed. Ms [NAME] also gives evidence of the contact which she had with some of the Applicants: [redacted] [NAME] raised a number of concerns relating to the windows and door in his flat. On 3 February 2023 (HB.1014), she sent an email to [NAME] [NAME] stating that the defects had been remedied. [NAME] [NAME] did not respond to this. (ii) [NAME] [NAME] (5 [NAME]): In December 2022, [NAME] [NAME] complained that draughts were coming through his windows in the bedroom and living room. [NAME] agreed to fit a thicker gasket as a matter of good will. The correspondence is at HB.1027-1037). [NAME] [RESPONDENT] was not satisfied with the Respondent's response and invoked their complaint's procedure. On 10 June 2024 (at HB.1161-4), the Respondent offered him £450 in compensation. [NAME] [RESPONDENT] did not accept this offer.

47. The Tribunal addresses the additional following items raised by the Applicants in their Scott Schedule: (i) Asbestos: The Applicant complain that no asbestos was removed. The Respondent agree. This item was removed from the final account. We accept this.

14 (ii) Repointing masonry (£189.81). The Applicant complains that this was not carried out to a reasonable standard. The Respondent disputes this. This is a modest sum which we allow. (iii) Removal/Refix of TV aerials (£379.62). The Applicant complains that only one aerial was removed. The Respondent agrees, but states that this was an itemised cost which did not depend on the number of units. The Tribunal agrees that it was reasonable to include this in the contract specification. (iv) Clean soffits and fascias (£1,391.94). The Applicants state that no items were cleaned. The Respondent states that this work was carried out and signed off. The Tribunal does not consider that this work was carried out to an adequate standard. The Tribunal disallows £700. (v) Clean stone sills (£1,265.40). The Applicants state that no items were cleaned. The Respondent states that this work was carried out and signed off. The Tribunal does not consider that this work was carried out to an adequate standard. The Tribunal disallows £600. (vi) Apply mastic to windows (£5,036.55): The Applicants assert that this was part of the basic installation and should not have been charged separately. The Respondent asserts that the specification made it clear that this work was to be done by a [NAME]. The Tribunal is satisfied that the Respondent was entitled to take this course. (vii) Overheads/profit and Attendance (£23,400). The Applicants contend that this is a vague charge which cannot be justified. The Respondent replies that this is a standard charge in the trade. The Tribunal agree. (viii) Rain water goods (£2,480.18). The Applicants complain about the quality of the works. The Respondent replies that the work was water tested and signed off. The Tribunal does not consider that this work was carried out to an adequate standard. It does not accept that the debris shown in the photographs arose subsequently. The Tribunal disallows £1,000. (ix) Clean Roof Tiles and replaced damaged tiles. The Applicants complain about the quality of the works. The Respondent replies that the work was satisfactory and was signed off. The Tribunal does not consider that this work was carried out to an adequate standard and disallow £500. (x) External Decoration and Woodwork (£8,225.10). The Applicants complain about the quality of the works. They rely on their report from [RESPONDENT]. The Respondent replies that the work was carried out to a satisfactory standard and was signed off. The Tribunal does not consider that this work was carried out to an adequate standard and disallow £3,000.

15 (xi) Staining to woodwork (£5,061.60). The Applicants state that the woodwork was not stained. The Respondent replies that the work was carried out to a satisfactory standard and was signed off. We agree. (xii) Decoration to the communal doors (£1,898.10). The Applicants complain about the quality of the works. The Respondent replies that the work was satisfactory and was signed off. Although the Applicants have provided a number of photographs, they have not satisfied us that any reduction should be made. (xiii) Replacement of damaged vents (£197.99). The Applicants complain that they have been charged for 15, but only 11 were replaced. The Respondent replies that the work was satisfactory and was signed off. This is a modest sum which we allow. (xiv) Replace sections of knee high fence (£1,600). The Applicants complain that only one small section was replaced. The Respondent replies that the work was carried out to a section of fencing on a client instruction. Although the photograph indicate some disrepair to the fencing, the Applicants have not satisfied that these sections were included in the contract. We allow this charge. (xv) Ridge tile replacement and repointing (£1,125). The Applicants complain that this work was not carried out. The Respondent replies that the work was satisfactory and was signed off. The photographs indicate a number of defects and we disallow £500. (xvi) Brickwork repairs (£800). The Applicants assert that this was not part of the cyclical works. The Respondent replies that it was. The work was checked and signed off. We allow this item. (xvii) Fencing repairs prior to redecoration (£450). The Applicants complain that no fences were repaired. In any event, the fencing is not part of the estate. The Respondent replies that minor works were executed to parts of fencing which fall within the estate. We allow this modest charge. (xviii) Pest proof vents (£360). The Applicants initially asserted that no vents were pest proofed. The Applicants now accept that work was carried out to one vent but not to an adequate standard. The Respondent replies that the work was satisfactory. The Applicants have not satisfied us that we should disallow this item. (xix) Rake out and repoint gaps to sub cills (£75). The Applicants assert that no work was done. The Respondent replies that the work was completed and signed off. We allow this modest sum. (xx) Rake out and repoint window heads (£75). The Applicants assert that no work was done. The Respondent replies that the work was completed and signed off. We allow this modest sum.

16 (xxi) Rake out and repoint side of concrete cills (£50). The Applicants assert that no work was done. The Respondent replies that the work was completed and signed off. We allow this modest sum. (xxii) Repointing of brickwork above rear door of 1 [NAME] (£95). The Applicants initially asserted that only one was replaced. They now accept the need to pay a reasonable amount. The Respondent replies that the work was completed and signed off. 16 verge caps were completed. We allow this modest sum. (xxiii) Supply and fit new dry verge caps where missing (£95). The Applicants assert that no work was done. The Respondent replies that the work was completed and signed off. We allow this modest sum. (xxiv) Rebuild bin stores (£595). The Applicants complain that this was not part of the cyclical works and the works were not completed to a satisfactory standard. The Respondent replies that the work was completed and signed off. We allow this item. (xxv) Remove ivy (£50). The Applicants complain that they have been double charged as this was part of the gardening contract. The Respondent replies that the work was completed as part of the cyclical works programme and signed off. We allow this modest item. (xxvi) Repoint 5 window fills (£100). The Applicants complain that this is part of the window replacement and they are being charged twice. The Respondent replies that the work was carried out to the first floor cills in three blocks. The works were completed and signed off. We allow this modest item. (xxvii) CT1 window fills (£75). The Applicants complain that this was part of the window installation and they are being charged twice. The Respondent denies that there has been any duplication. The work was carried out to the window cills on the first floors at [NAME], Sovereign Hose and Meade Houe. We allow this modest charge, (xxviii) [NAME] dropped tiles gable end [NAME] (£1,700): The Applicants complain that this work was not done. The Respondent replies that the work was completed and signed off. We allow this modest item. (xxix) Window and door replacement (£144,648 + VAT). The only issue raised by the Applicants is that of historic neglect. We have already rejected this challenge (see [37(i)] above).

48. The Tribunal have made modest deductions of £7,300 out of a contract in the sum of £364,777. Each Applicant is therefore entitled to a deduction of £304.17. However, whilst [NAME] [NAME] and [NAME] [NAME] paid their full 4.167% contribution towards the works, [NAME] [NAME], [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME] paid £186.57 less than his full share, whilst [NAME] [NAME] paid £226.82

17 less (see Table at [35] above). We consider that these sums should be credited against the reductions that we have made. Thus we make deductions of (i) £117.60 for [NAME] [NAME], [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME]; (ii) £304.17 for [NAME] [NAME] and [NAME] [NAME] and (iii) £77.35 for [NAME] [NAME]. Issue 2: The Service Charges for 2023/24 49. The Service Charge Account for April 2023 to March 2024 is at HB.371. This is broken down to the 4.167% which each tenant is required to pay. The total service charge for the year was £1,685.53, whilst the budget was £1,586,88. The tenants were therefore required to pay an additional £98.65.

50. The Applicants challenge six items. The Respondent has conceded three of these: (i) [NAME]: The Respondent has agreed to reduce the sum charged of £176.72 by £88.36. (ii) [COMPANY]: The Respondent has recognised that there was a mistake and have reduced the sum of £87.06 to £64.24, a credit of £22.82. (iii) [NAME]: The Respondent has agreed to a 50% reduction from £167.75 to £83.33. The Applicants have provided a number of photographs of the state of the garden (at A.892-894). Ms [RESPONDENT] stated that the Respondent had made the reduction as a gesture of good will.

51. Three items remain in dispute: (i) Communal Maintenance/Repairs: £42.11. The Applicants had initially asserted that no communal repairs had been executed. Ms [NAME] has produced the invoices. The Applicants then complained about the quality of the works. At the hearing, the Applicants confirmed that this item was no longer in dispute. (ii) Entry Phone: £48.35. The Applicants contend that there was no evidence of any work being done. Ms [NAME] has provided details of the four invoices which total £1,160.44 at HB.436. We therefore allow this. (iii) [NAME]: £259.33. The Applicants' complaint is that the budget had included a sum of £41.16 had appeared in the budget, whilst the actual sum was £259.33. The charge in the previous year had been £31.68. Ms [NAME] gave a full explanation for the increase in the [NAME]. The charge of £31.68 had been a legacy charge from their block policy. This reflected two factors: (i) [NAME] had undervalued its properties by some 50%; (ii) the cover had been arranged through Legacy who had offered rates substantially below the market. Legacy have now withdrawn from the social housing market. Ms [NAME] describes how [NAME] had consulted on a proposal for a Qualifying Lont-Term Agreement for [NAME]. She provides reasons as to why [NAME] has

18 increased. [NAME] had explained why [NAME] had gone up on their website (at HB.475-8). The Applicants have not provided any evidence that [NAME] could have been secured at a lower premium. We are an expert tribunal. We are satisfied that an [NAME] charge of £259.33 is reasonable for these one bedroom flats.

52. It is agreed that the Applicants are entitled to refunds of £194.51. Issue 3: The Interim Service Charges for 2024/25 53. The budget for the year is at HB.550. The Tribunal explained that any landlord has to make a judgment as to what sums should be included in a budget. When the service charge accounts for the year are available, there will be a reconciliation between the budgeted and the actual expenditure. Further, any challenge to the quality of the service can only be made at the end of the service charge year.

54. The Applicants challenge seven items in their Scott Schedule. They indicated that they no longer challenge the figure for pest control (£4.32). The Respondent agreed to reduce the sum for [NAME] [NAME] by 50% (£105.67).

55. The remaining sums remain in dispute: (i) Gardening: £175.44: The Applicants complain about the quality of the service. Work is sporadic and is not carried out to an acceptable or reasonable standard. The Applicants confirmed that they did not dispute the sum included in the budget. When a budget is prepared, it must be assumed that works will be carried out to an acceptable standard. We therefore allow this sum. (ii) [COMPANY]: £183.48: The Applicants state in the Scott Schedule that there is no system in place. The Respondent replies that this heading covers the emergency lighting system from which each block benefits. This is a 5% uplift on the 2023/24 estimate. We are satisfied that this budget sum is reasonable. (iii) Tree Surgery: £31.68: The Applicants contend that there are no trees on the estate that require surgery. In the Scott Schedule, the Respondent argued that this was only an estimate and there would be a credit if there was no such work. At the hearing, the Respondent took the contrary position. They agreed that this sum should be disallowed. If there is any such expenditure, it will be included in the final service charge accounts. (iv) [NAME]: £14.40: The Applicants argued that there was no requirement in the lease for the accounts to be audited. The Respondent referred to Clause 7 (5)(c) of the leases. In the light of this, the Applicants did not pursue their challenge.

19 (v) [NAME]: £427.68: The Applicants complain that this sum is excessive. The Tribunal has found that the actual expenditure of £259.33 was reasonable. Whilst £424.68 had been included in the budget, Ms [NAME] stated that after the Section 20 Consultation, the tenants had been informed that the [NAME] would be in the region of £400. The Tribunal accepts that [NAME] premiums are increasing. However, we are satisfied that the estimate of £424.68 was unreasonable. We allow £400.

56. The Tribunal has made deductions of £162.03 to the budget. [NAME] under s.20C and refund of fees 57. At the end of the hearing, the Applicants made an [NAME] for a refund of the fees that they have paid in respect of these six applications. We understand that they have paid £800, namely 6 [NAME] fees of £100 and a hearing fee of £200. The Applicants have only succeeded on a small number of points. We therefore make an order that they should be able to recover 25%, namely £200.

58. In the [NAME] form, the Applicants applied for an order under section 20C of the 1985 Act in respect of the cost of these proceedings. It is not for this tribunal to make a determination as to whether the landlord is entitled under the leases to pass on these costs through the service charge. Section 20C (3) permits the Tribunal to make such order as it considers just and equitable in the circumstances. Given our findings, we are satisfied that the Respondent should be restricted to passing on 75% of their costs.

59. The Respondent has not indicated whether it intends to pass on its costs through the service charge or as to the level of costs that it would intend to charge to the tenants. The Tribunal records its concern that any such costs should be proportionate. The Respondent has been represented by Counsel with two representatives from her instructing solicitor in attendance. These tribunals are intended to be informal and have adopted procedures so that parties do not need to be represented. We note that it is always open to the tenants to challenge the size of any such costs through a separate [NAME] if they consider these to be unreasonable. However, the Respondent is to be commended for the constructive manner in which it has sought to respond to these applications.

60. The Tribunal also makes an order pursuant to paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 restricting the ability of the Respondent from charging an administration charge in respect of its litigation costs. However, the Tribunal does not consider that this is strictly necessary, as it would not seem to be open to the Respondent to levy such a charge. Judge Robert Latham 29 July 2025

20 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 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 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).