AllowedFirst-tier Tribunal (Property Chamber)·08 January 2025

First-tier Tribunal rules administrative costs for rent collection unpayable

Case No.

📌 In brief

The First-tier Tribunal ruled that administrative costs for collecting rent are not payable under the lease and the Act. The decision was based on the lack of a provision in the lease allowing for such costs and the fact that they did not meet the definition of administration charges under the Act.

⚖️ Legal holding

Administrative costs for collecting rent are not payable if not provided for in the lease and not defined as administration charges under the Act.

Topics

lease agreementsadministrative charges

Provisions

Commonhold and Leasehold Reform Act 2002 s.5A

📖 Technical summary

The tribunal ruled that administrative costs for collecting rent are not payable under the lease and the Act.

📜 Headnote Official document

The First-tier Tribunal ruled that administrative costs for collecting rent are not payable under the lease and the Act, as there was no provision in the lease allowing for such costs and they did not meet the definition of administration charges under the Act.

📚 Full judgment Official document

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference

LON/00AU/LAC/2024/0017 [ADDRESS] [POSTCODE] Applicants

[NAME](1) [NAME] (2) [NAME] (3) [NAME] (4) [NAME] (5) [NAME] [NAME] (6) [NAME] (7) [NAME] [NAME] (8)

Respondents

[COMPANY] [COMPANY] of application Payability of Administration Charges Tribunal

Judge Shepherd

DETERMINATION

1. This is a paper determination made on 17th December 2024. The Applicants are various leaseholders of premises at [ADDRESS],[POSTCODE] ( The premises). The Respondents are the freeholders of the premises [COMPANY]. Their managing agents are [COMPANY].

2. The Applicants challenge the payability of an administration charge connected with the collection of ground rent. In a sample notice given to Mr [NAME] and Ms [NAME] dated 29th August 2024 it states: We now request payment of the following monies due under the terms of your lease….. Ground rent for the period September 2024/2025- £300 Admin costs for collection of rent -£60 3. The same letter was sent to all of the Applicants. They say the admin costs are not payable under the lease and are not administration charges as defined under paragraph 5A of Sched 11 of the Commonhold and Leasehold Reform Act 2002 (The Act). The Respondents appear to have taken no part in these proceedings. Determination 4. The admin costs for the collection of rent are not payable. Reasons 5. There is no provision in the lease that allows for the collection of admin costs for the collection of rent. In addition the costs do not come within the definition of administration charges under the Act.

6. The demands were issued by the Respondents after the Applicants obtained the Right to Manage in November 2023. In addition, the demands were issued notwithstanding a number of previous Tribunal decisions on similar facts finding that admin charges of this type were not recoverable. It is hoped that the Respondents may in future consider carefully whether they are entitled to administration charges before imposing them.

Additional relief

7. The Tribunal exercises its discretion under paragraph 5A of Schedule 11 to the 2002 Act as the Applicants have been entirely successful. The Respondents are also required to repay the Applicants their application fee of £100.

Judge Shepherd 17th December 2024 ANNEX - RIGHTS OF APPEAL Appealing against the tribunal’s decisions

1. A written application for permission must be made to the First-tier Tribunal at the Regional tribunal office which has been dealing with the case.

2. The application for permission to appeal must arrive at the Regional tribunal office within 28 days after the date this decision is sent to the parties.

3. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

4. The application for permission to appeal must state the grounds of appeal, and state the result the party making the application is seeking. All applications for permission to appeal will be considered on the papers 5. Any application to stay the effect of the decision must be made at the same time as the application for permission to appeal.

📊 How courts decide similar cases

Among 12 similar decisions in this collection:

Allowed9 cases

Allowed in Part1 case

First-tier Tribunal (Property Chamber) Tenant Secures Rent Refund for Unlicensed HMO Tenancy

Struck Out1 case

First-tier Tribunal (Property Chamber) Tenant’s Service Charge Claim Struck Out for Lack of Jurisdiction

Dismissed1 case

First-tier Tribunal (Property Chamber) First-tier Tribunal Sets Rent for Assured Periodic Tenancy

A snapshot of this collection — not a prediction of your case's outcome.

⚖️ What tends to weigh in cases like this

✅ Tends to be accepted

Administrative costs for collecting rent are not payable if not specified in the lease.
Tenants are entitled to rent repayment orders if landlords operate unlicensed HMOs.
Service charges are not payable if the landlord fails to provide lawful demands.
Tenants are entitled to purchase the freehold interest of their property under the Leasehold Reform Act 1967 if the landlord cannot be found.
Legal costs cannot be recovered from other tenants via service charges unless the lease terms are clear.

Patterns observed in similar cases in this collection — every case is unique.

❓ Frequently asked questions

What did this decision decide?

The decision ruled that administrative costs for collecting rent are not payable under the lease and the Act.

Who was involved?

The case involved tenants and the freeholder of the property.

How did the court decide, and why?

The court decided that the administrative costs for collecting rent are not payable because there was no provision in the lease allowing for such costs and they did not meet the definition of administration charges under the Act.

Which laws or rules were applied?

The Commonhold and Leasehold Reform Act 2002 was applied, specifically paragraph 5A of Schedule 11.

What was the argument that mattered most?

The argument that mattered most was that the administrative costs for collecting rent were not defined as administration charges under the Act.

Was the decision for or against the person who brought the case?

The decision was for the tenants who brought the case.

What does this mean for someone in a similar situation?

For tenants in a similar situation, this means that administrative costs for collecting rent may not be payable if they are not provided for in the lease and do not meet the definition of administration charges under the Act.

What evidence or documents mattered?

The sample notice given to the tenants requesting payment of the administrative costs for collecting rent was a key document in the case.

Can a decision like this be appealed?

Yes, a decision like this can be appealed to a higher court within 28 days of receiving the decision.

Is it worth getting a solicitor for a case like this?

It is always recommended to seek advice from a qualified solicitor for cases involving lease agreements and administrative charges.

Official source: First-tier Tribunal (Property Chamber) — headnote and full judgment reproduced from the court's public records. View on the official source ↗Summary, holding, technical summary and questions: produced by Artificial Intelligence based on the official headnote and judgment. These are VadeLab’s own material and are not the work of the Court.This decision was issued by the First-tier Tribunal (Property Chamber) and is reproduced from its published records. VadeLab is not affiliated with, and this page is not endorsed by, that court or tribunal.