First-tier Tribunal Rules Against Administration Charges for Late Ground Rent Payments

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/00KA/LAC/2025/0004 Property : [NAME] and [NAME], 146-158 [ADDRESS], [POSTCODE] Applicants : [redacted] : [COUNSEL[NAME] Respondent : [redacted] Representative : [RESPONDENT] of [NAME] : Liability to pay administration charges Tribunal member : Judge Bernadette MacQueen Venue : Determination without oral hearing (paper determination) Date of decision : 23 July 2025

DECISION

2 Decisions of the Tribunal (1) The Tribunal determines that the administration charges for late payment of ground rent for the year 2024 for flats [NAME] and [NAME] are not payable. (2) The Tribunal makes this determination for the reasons set out in this Decision. The [NAME]

1. The Applicants sought a determination pursuant to Schedule 11 to the Commonhold and Leasehold Reform Act 2002 (“the 2002 Act”) as to whether administration charges are payable.

2. The Tribunal made directions dated 17 April 2025 (the Directions) for the Applicants and Respondent to produce an indexed and paginated bundle of documents. Additionally, the Tribunal decided that the [NAME] could be determined without a hearing, unless any party made a written request for an oral hearing to be held or the judge, having considered the papers provided by each party, found that a hearing was necessary. Parties did not request an oral hearing and the Tribunal was satisfied that the [NAME] could be determined by considering the papers without a hearing.

3. The Applicants provided a bundle of documents consisting of 58 pages. The Respondent did not provide any documentation to the Tribunal. Determination in Respondent’s Absence 4. The Tribunal was satisfied that the Respondent had been notified of the hearing. In particular, the Tribunal sent the Directions to two email addresses for the Respondent namely [EMAIL] and to a named employee @grangeford.com. Further, the Directions were also sent by the Tribunal to the postal address for [RESPONDENT].

5. Being satisfied that the Respondent had been notified of the hearing, or that reasonable steps had been taken to notify the Respondent of the hearing, the Tribunal determined that it was in the interests of justice to proceed in the Respondent’s absence in accordance with Rule 34 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013. The Applicant had provided their bundle of documents and sought a determination from the Tribunal.

3 The Background 6. The [NAME] related to two rooms within a block used as student accommodation. The rooms were held under residential long leases, the terms of which provided for the payment of an annual ground rent of £250 per room. 7. [COMPANY], acting on behalf of [NAME]) [COMPANY] had levied administration charges for late payment of ground rent and it is these administration charges which are the subject of this [NAME]. The Law 8. Administration charges are defined in Schedule 11 of the Commonhold and Leasehold Reform Act 2002 as: “an amount payable by a tenant of a dwelling as part of or in addition to the rent which is payable directly or indirectly: (a)… (c) in respect of a failure by the tenant to make a payment by the due date to the landlord or person who is party to his lease otherwise than as landlord or tenant…”

9. Section 166 Commonhold and Leasehold Reform Act 2002 provides: 166 Requirement to notify long leaseholders that rent is due

(1) A tenant under a long lease of a dwelling is not liable to make a payment of rent under the lease unless the landlord has given him a notice relating to the payment; and the date on which he is liable to make the payment is that specified in the notice.

(2) The notice must specify—

(a) the amount of the payment, (b) the date on which the tenant is liable to make it, and (c) if different from that date, the date on which he would have been liable to make it in accordance with the lease,

and shall contain any such further information as may be prescribed…”

(3) The date on which the tenant is liable to make the payment must not be -

4 (a) either less than 30 days or more than 60 days after the day on which the notice is given, or

(b) before that on which he would have been liable to make it in accordance with the lease.

10. Clause 3.16 of the lease for the Property provides: Tenant’s covenants “Landlord’s costs To pay within 14 days of receipt all proper and reasonable costs, fees, charges, disbursements and expenses incurred by the Landlord including those payable to solicitors, counsel, architects, surveyors, bailiffs and the Landlord’s internal management fee in relation to or in contemplation of: 3.16.1 The recovery or attempted recovery of arrears of additional rents, or other sums due from the Tenant or in remedying any breach of the Tenant’s covenants…” The Issues 11. The issue in dispute is the payability of administration charges that have been added to the Applicants’ account because of late payment of ground rent.

12. Additionally, the Applicants’ submitted that in 2025, both the Applicants and their letting agent paid the ground rent for the Property. The Applicants therefore submitted that £500 (£250 for [NAME] and £250 for [NAME]) should be refunded as the Applicants had made a duplicate payment. However, this Tribunal’s jurisdiction extends only to consider payment of administration charges and does not extend to the payment of ground rent. The Tribunal therefore makes no determination on the overpayment of ground rent for 2025. However, the Tribunal encourages parties to discuss this issue and if a duplicate payment has been made that this is refunded.

13. Further, the Applicants submitted that the ground rent they paid for the year 2024 for [NAME] should be refunded to them as they had never been sent a ground rent invoice. The Tribunal will not consider this issue as the Tribunal’s jurisdiction extends only to a determination in relation to the administration charges.

5 The Applicant’s Position 14. The Applicants stated that they did not receive notices to pay the annual ground rent of £250 for [NAME] and £250 for [NAME] prior to the annual ground rent becoming due on 1 January 2024 in accordance with section 166 of the 2002 Act. This resulted in them failing to pay the 2024 ground rent on time and administration charges being levied on them by the Respondent. 15. [RESPONDENT[NAME], on behalf of the Applicants, provided a witness statement which was dated 30 May 2025 (page 6-7 of the Applicants’ bundle). In this statement [NAME[NAME] stated that he was only provided with an invoice for ground rent for [NAME] in September 2024 when it was forwarded to him in a zip file by a [COMPANY] employee. [NAME[NAME] stated that he has never received any notice for [NAME].

16. Within the bundle, the Applicants included an email dated 13 March 2024 from [COMPANY] which notified the Applicants the because of non-payment of ground rent, there was a balance of £1,187 outstanding. [NAME[NAME] replied by email dated 15 March 2024 (page 8 of the bundle) and stated that he did not know that the ground rent was outstanding as he thought the property managers had paid it for him. The email stated: “I did not know that I did not pay the ground rent. I thought the property managers pay it for me. I also missed reading your mail on time and missed the link. Pls send me another link or tell me how to pay you or who ever.” 17. The heading for this email was “[ADDRESS], [NAME]”. However, at paragraph 3 of his witness statement, [NAME[NAME] stated that he paid £1,187 in March 2024, believing that this amount related to both [NAME] and [NAME]. Included within the Applicant’s bundle at page 10 was a bank statement showing that a payment of £1,187 was made by the Applicants to “[NAME]” on 18 March 2024.

18. At page 12 of the bundle was a further email, also dated 13 March 2024, from [COMPANY]. This was headed “London [NAME]”. [NAME[NAME] stated that he replied to this email on 24 March 2024 as follows: “I have transferred the money. Did you receive it??” However, [NAME[NAME] stated that he did not receive a reply to this email.

6 19. On 20 May 2024, [COMPANY] again emailed the Applicants regarding [NAME] (page 13 of the bundle). The subject line of the email read, “[ADDRESS], [NAME] notice.” The email stated that, as payment had not been made, counsel had been instructed to draft Particulars of Claim and, unless payment was received by 5pm, counsel would issue the claim. The email also stated that the balance was now £1,587.

20. The Applicants included at page 15 of the bundle a bank statement showing a payment they made to “[NAME]” of £1,587 on 21 May 2025. However, [NAME[NAME] stated at paragraph 3 of his witness statement that this amount was refunded to him in December 2024 by Mastercard at his request as he suspected fraud and incorrect billing.

21. On 29 May 2024, [NAME[NAME] stated that he wrote to [COMPANY] (page 17 of the bundle) and confirmed that the Applicants had not received an invoice to pay ground rent for 2024 for either flat [NAME] or [NAME].

22. It was the Applicants’ position that as no demand for payment of ground rent for 2024 was delivered to them, they were under no obligation to pay the ground rent. Therefore, the administration charges for late payment should not have been applied to their account and were not payable.

23. Further, the Applicants submitted that the Respondent must demonstrate that the administration charges claimed reflect actual work done and that such work was necessary and reasonable. It was the Applicants’ position that a breakdown to justify the administration charges had not been provided to them by the Respondent.

The Respondent’s Position 24. The Respondent did not provide a bundle of documents to the Tribunal in accordance with the Directions, however, within the Applicants’ bundle was an email sent on 10 September 2024 (page 18) from the Respondent to the Applicants. This email set out the Respondent’s position. The Respondent stated that the Applicants had been paying [RESPONDENT] ground rent since 2021 and that the invoice demands for the 2024 ground rent were sent to the Applicants by the “billing team” on 27 November 2023. This email stated that invoices and outlook conformations were attached.

25. It was therefore the Respondent’s position that they were entitled to pursue forfeiture of the leases due to non-payment of ground rent and apply administration charges.

7 Applicant’s Position Regarding the Respondent’s email of 10 September 2024 26. The Applicants’ position remained that they did not receive the 27 November 2023 email enclosing the 2024 ground rent demands for [NAME] and [NAME]. The only invoice for the 2024 ground rent that the Applicants said they saw was the invoice for ground rent for [NAME] when this was forwarded to them with the email of 10 September 2024. The Applicants stated that a notice for ground rent for [NAME] was not included as an attachment to this email. The Tribunal’s Decision 27. The Applicants’ evidence to the Tribunal was that they did not receive the demands for ground rent for 2024. The Respondent’s email to [RESPONDENT[NAME] (page 36 of the bundle) stated that the demands for ground rent were sent by email on 27 November 2023. However, the Tribunal accepts the Applicants’ evidence that these demands were not received by them.

28. Given that the Tribunal accepts the evidence of the Applicants that they did not receive the ground rent notices for 2024, the Tribunal therefore finds that it is not reasonable for administration charges for late payment of ground rent for 2024 to be levied by the Respondent.

29. The Tribunal determines that the administration charges for late payment of ground rent for the year 2024 for flats [NAME] and [NAME] are therefore not payable.

Name: Judge Bernadette MacQueen Date: 23 July 2025

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.

8 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).