First-tier Tribunal Rules on Service Charge Liability

OUTCOME: Allowed in Part

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/26UG/LRM/2023/0019 Property : [ADDRESS], [POSTCODE] Applicant: [redacted] Respondent : [redacted] : [COUNSEL] [COMPANY] of [NAME] : For the determination of the liability to pay service charges under section 27A of the Landlord and Tenant Act 1985 Tribunal members : Judge [NAME], FRICS Date of hearing : 11 December 2025 Date of decision : 12 January 2026

DECISION

2 Decisions of the Tribunal (1) The Tribunal determines that the amounts as set out in this decision are payable by the Applicant in respect of the service charges for the years ending 2023 and 2024. (2) The Tribunal makes the determinations as set out under the various headings in this Decision. (3) 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 through any service charge. (4) The Tribunal determines that the Respondent shall pay the Applicant £327 (£100 [NAME] fee and £227 hearing fee) within 28 days of this Decision, for the reimbursement of the Tribunal fees paid by the Applicant. The [NAME]

1. This [NAME] began as a claim for payment of accrued uncommitted service charges, following the management being passed to a [COMPANY] on 1 November 2023. A case management hearing was held on 28 July 2025. [APPELLANT] attended the hearing as a representative of the [COMPANY]. Mr [COUNSEL] attended from [NAME].

2. At this case management hearing, it was clarified that [ADDRESS] had been newly built in or about 2018/19 and that [APPELLANT] had bought his flat on 1 November 2020. [NAME] purchased the freehold from the builders on 21 October 2020. For the first year of his occupation, [APPELLANT] had paid £1,320 as a service charge. The first demand sent by [NAME] to [APPELLANT] indicated that no monies were held on account. Further, at the 28 July 2025 hearing, [APPELLANT] accepted that it was unlikely that any large sums of money would be held on account, and told the Tribunal that the [COMPANY] had been advised to issue the [NAME] to try to get some information about existing contracts held in respect of the building, rather than in anticipation of any monies being due by way of uncommitted service charges.

3. Given that the Applicant wished to challenge some of the service charges claimed by [NAME] from October 2020 to October 2023, the Tribunal converted the [NAME] into a determination as to whether service charges were payable under section 27A of the Landlord and Tenant Act 1985 (“the 1985 Act”). The [NAME] was amended so that it was made by [APPELLANT] in his capacity as leaseholder. Directions were made and the matter listed for hearing.

3 The Hearing 4. The hearing took place via [NAME] ([NAME]). The Applicant appeared in person. The Respondent did not appear and was not represented at the hearing.

5. The Tribunal had before it a bundle of documents consisting of 158 pages (the Bundle). This included a schedule of disputed items with comments completed by both the Applicant and the Respondent, and relevant invoices.

6. Neither party requested an inspection and the Tribunal did not consider that one was necessary, nor would it have been proportionate to the issues in dispute. Proceedings in the Absence 7. When the hearing commenced at 10am, the Respondent was not present and so the Tribunal waited until 10.15am. When the hearing reconvened, the Respondent was still not present. The Tribunal considered whether to proceed in the absence of the Respondent under Rule 34 Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (the Rules).

8. The Tribunal was satisfied that the Respondent had been notified of the hearing. The Tribunal’s file confirmed that on 26 August 2025, a notice of hearing had been sent to the Respondent’s representative using the email address they had used the previous day to email the Tribunal their availability for the hearing. This email had not been returned as undelivered. Additionally, the Tribunal had sent a further notification to the Respondent which included the details of the [NAME] link for the hearing.

9. The Tribunal considered that it was in the interests of justice to proceed with the hearing in the absence of the Respondent. The Applicant had attended the hearing and was ready to proceed as was the Tribunal. Further, the Applicant had prepared the Bundle which contained the Respondent’s comments. This had been served on the Respondent and was before the Tribunal.

10. The Tribunal further considered Rule 3 of the Rules and in particular that the overriding objective to deal with cases fairly and justly includes avoiding delay, so far as compatible with proper consideration of the issues. There was no reason to delay the hearing. The Respondent had not provided the Tribunal with an explanation for non-attendance and the Tribunal was ready to hear the matter. The Tribunal therefore proceeded in the Respondent’s absence.

4 The Background 11. The Applicant held a long lease for [ADDRESS], [POSTCODE] (the Property). The lease was dated 1 November 2019 and made between [APPELLANT] (1) and [NAME] [APPELLANT] and [NAME] (2) (the Lease). The Lease required 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 Lease will be referred to below, where appropriate. The Issues 12. The Applicant had completed a Schedule setting out the disputed service charges (pages 20 to 26 of the Bundle), to which the Respondent had added their comments. Matters Agreed 13. The Applicant confirmed that he was no longer disputing the charge for window cleaning and bin cleaning for service charge year end 2022 and window cleaning and guttering repairs and cleaning for service charge year end 2023. Matters in Dispute 14. The items in dispute for year end 2022 were the payability and/or reasonableness of service charges for the following: (i) [NAME] (£6,488.43), additional [NAME] premium (£1,911.66) and surveyor’s fee for [NAME] purposes (£1,740); (ii) Surveyor’s fee to prepare a preventative maintenance schedule (£1,194) (iii) Standard Audit Report (£2,700) (iv) Tree inspection and recommendation (£900)

15. The items in dispute for year end 2023 were the payability and/or reasonableness of service charges for the following: (i) Common parts electricity (£7,052.45) (ii) [NAME] (£6,379.64) (iii) Internal decorating (£9,204)

5 (iv) Handover fee (£1,320)

16. Having heard evidence and submissions from the Applicant and considered all of the documents contained within the Bundle, the Tribunal makes determinations on the various issues as follows. [NAME], [NAME] and Surveyor’s Report for [NAME] – Service Charge Year 2022 17. The Applicant submitted that the [NAME] cost and broker fee of £6,488.43 was not reasonable. Further, the Applicant submitted that the additional [NAME] premium of £1,911.66 and the surveyor’s report for [NAME] purposes of £1,740 was also not reasonable. By way of comparison, the Applicant stated that the [COMPANY] had paid £2,552 for building [NAME] for the Property in 2024 and submitted that £3,000 would therefore be a reasonable amount for [NAME] for the service charge year ended 2022.

18. In relation to the additional [NAME] premium, the Applicant stated that it was unclear as to what this additional [NAME] premium related to. Regarding the charge for the surveyor’s report for [NAME] purposes, the Applicant submitted that this should not be payable and stated that the [COMPANY] had used a desktop survey (completed by RebuildCostAssessment.com) to ascertain the rebuild costs which had cost £199.75 (inclusive of VAT), a copy of which was at pages 142 to 155 of the Bundle. It was therefore the Applicant’s position that a RICS survey was not reasonable.

19. In reply, the Respondent had submitted within his written documentation provided to the Tribunal that a RICS valuation had been undertaken to ensure compliance with clauses 5.1 and 5.2 of the Lease to ensure that the full costs of the rebuilding and reinstatement of the Property were correctly ascertained. Further, the Respondent had submitted that the [NAME] premium was based on the RICS valuation and the full reinstatement cost. It included property owners’ liability, terrorism cover and broker’s commission at market rate (approximately 15%). The additional [NAME] premium of £1,911.66 represented a mid-term adjustment following updated declared values and inclusion of subsidence cover that was required by the freeholder’s lender.

20. The Respondent had further submitted that the market conditions post the COVID pandemic had significantly increased premiums. Additionally, the Respondent had submitted that the Applicant’s quote was not a like for like quote as it related to a different year and was based on different [NAME] valuations. Additionally, the Property had been subject to different management structures in 2024 following the [COMPANY] taking over.

6 The Tribunal’s [NAME], [NAME] and Surveyor’s Report for [NAME] – Service Charge Year 2022 21. The Tribunal accepts the Respondent’s position that a RICS valuation was needed in order to ensure that the reinstatement and rebuild costs were established. The Tribunal finds that the cost of £1,740 for this report was reasonably incurred and notes that an invoice was included within the Bundle at page 45. The invoice describes the work completed as “Professional Services in inspecting the above premises and subsequently preparing an [NAME]”. The Tribunal does not accept the Applicant’s position that a desktop rebuild cost assessment should have been used in place of the RICS valuation. The Tribunal is satisfied that the Respondent commissioned the RICS valuation in order to ensure that the rebuilding and reinstatement costs of the Property were ascertained. The Tribunal finds that the work involved in this RICS survey and report would be significantly more involved than the desktop assessment.

22. The Tribunal determines that the amount of £6,438.43 is reasonably incurred for the [NAME] premium. The cost set out in the service charge accounts for the period ending 25 December 2022 was £6,488.43 (page 41 of the Bundle); however, the premium was for £6,438.43 and that is the amount that Tribunal finds as payable.

23. The Tribunal accepts the Respondent’s position that the [COMPANY]’s [NAME] for 2024 does not represent a like for like comparison with the Respondent’s premium for the service charge year end 2022. The Tribunal notes in particular that the rebuild cost that the RTM has used is different to that of the Respondent’s. The Tribunal has not been provided with any comparative quotations for [NAME] for the year end 2022.

24. Regarding the payment of the additional [NAME] premium, the Tribunal is not satisfied on the evidence before it that an additional [NAME] premium of £1,911.66 is payable. As stated above, the invoice for the RICS report at page 45 of the Bundle was dated 22 February 2022 and this therefore ties with the [NAME] policy period (22 February 2022 to 30 September 2022) at pages 38 to 40 of the Bundle. However, based on the documentation before the Tribunal it is not possible to see how an additional [NAME] premium has been charged. At pages 41 to 43 of the Bundle, was a copy of the [NAME] policy for the period 1 October 2022 to 30 September 2023, for which the total amount payable was £6,438.43. The schedule was dated 26 September 2022 and the declared value was £2,717,050 and the sum insured was £3,668,018. Terrorism cover was not in force. At pages 38 to 40 was a copy of the policy for the period 22 February 2022 to 30 September 2022. The total amount payable for this period was £4,283.56. The date of the schedule was 9 March 2022. The declared value was £2,450,000 and the sum

7 insured was £3,307,500. Terrorism cover was not in force and the £500 excess for theft and malicious persons appeared to have been removed. Both policies had subsistence cover excess for £1,000.

25. The Tribunal therefore did not have evidence before it that an additional [NAME] premium of £1,911.66 was charged and consequently is not satisfied that this amount is payable. Surveyor’s Fee to Prepare Preventive Maintenance Schedule - £1,194 – Service Charge Year End 2022 26. The Applicant had submitted that it was unclear why an external agency was hired to prepare a preventative maintenance schedule as it was the Applicant’s view that this work would be included within the managing agent’s management fee. The Applicant had therefore stated that no charge should be paid.

27. The Respondent had submitted that this maintenance schedule was a requirement of the [NAME] and was also needed to plan cyclical works. It was the Respondent’s position that this was a reasonable management cost. Tribunal Decision - Surveyor’s Fee to Prepare Preventive Maintenance Schedule - Service Charge Year End 2022 28. The Tribunal accepts the position of the Respondent and finds that the preventative maintenance schedule was required and the amount charged for this work was reasonably incurred. Whilst some managing agent’s agreements may envisage that the managing agent will prepare the preventative maintenance schedule, this does not always follow. The Respondent had chosen to commission a surveyor to prepare this preventative maintenance schedule on their behalf.

29. The invoice for this work was at page 46 and confirmed that the work completed was professional services in carrying out an inspection of the Property and preparation of a PPM Schedule. The invoice total was £1,194 and the Tribunal accepts this evidence. Standard Audit Report - Service Charge Year End 2022 30. The Applicant had submitted that it was not clear what the fee of £2,700 for “Standard Audit report” related to, as there had been no audit report in any other annual statements in previous years.

31. In reply, the Respondent had stated that this was the annual accountants’ certification which was required under paragraph 7 of the First Schedule of the Lease.

8 32. Paragraph 7 provided that the landlord was: “to keep proper books of account of the sums received from the Tenant and the other tenants in the Building in respect of the Annual Expenditure and of all costs charges and expenses incurred by the Landlord pursuant to his covenants in this lease.” 33. The Respondent had provided an invoice at page 47 of the Bundle which was for the sum of £2,700. Tribunal Decision - Standard Audit Report - Service Charge Year End 2022 34. The invoice provided by the Respondent at page 47 of the Bundle is unclear. It is titled “tax invoice” however the description of the work is stated as: “call out to the above property on 01/03/22 to carry out the Standard Audit Report. Found landlord supply present; please find attached confirmation of meter reading”. The Tribunal is therefore not satisfied that this invoice is an invoice for an “annual accountants’ certification” which verified service charge accounts. On the basis of the information before the Tribunal, the Tribunal is not satisfied that this work was completed and, consequently, finds that this amount is not payable. Tree Inspection and Recommendation - £900 - Service Charge Year End 2022 35. The Applicant told the Tribunal that the [COMPANY] had commissioned multiple tree inspections/surveys to be carried out in 2024. It was the Applicant’s experience that if work was not required to the trees, no charge was made. The Applicant had included at page 156 of the Bundle an email that the [COMPANY] had received which stated that a [COMPANY] had visited the Property, inspected the row of 7 lime trees and found that no urgent work was required; therefore, no work was completed and so no charge was made. The Applicant submitted that there should be no charge for the tree inspection charged by the Respondent given that no work was completed.

36. The Respondent had submitted in the documentation provided to the Tribunal that the tree inspection and recommendation was a mandatory safety survey which was completed following a recommendation by the Respondent’s insurers. The Respondent had further submitted that the work was undertaken by an [NAME] and the invoice for the work was at page 52 of the Bundle. The invoice contained a description of the work completed and a recommendation for further work

9 37. Tribunal Decision - Tree Inspection and Recommendation - Service Charge Year End 2022 38. The Tribunal finds that the amount is payable and reasonably incurred. The invoice provided by the Respondent confirmed that an inspection of the trees was undertaken and that a recommendation for work that needed to be completed was given. Common Parts Electricity – £7,052.45 Service Charge Year End 2023 39. The Applicant stated that £7,052.45 charged for common parts electricity for the 9 month period for the service charge year end 2023 was significantly higher than 2022, where the charge for the entire year was £920.21 (as set out at page 34 of the Bundle – service charge account for the period ending 25 December 2022).

40. It was the Applicant’s position that £7,052.45 was not payable and instead he would expect a charge of £750 for common parts electricity. The Applicant submitted that this amount was in line with the 2022 charge and also with the amount that the [COMPANY] had paid once it took over the management. For the period 1 January 2025 to 31 December 2025, the total charge was £593.42. Additionally, at page 158 of the Bundle, the Applicant had produced an email sent to the [COMPANY] which confirmed that, following market testing, two quotations had been provided, one for electricity supply for 12 months until 31 March 2025 which showed an annual cost at an “out of contract rate” of £1,947.50, and the other for £1,352.09 for a “12 month contract ending 31 March 2025”. While the Applicant acknowledged that these quotations were for another time period, when unit rates would have been different, the Applicant submitted that the Respondent’s charge of £7,052.45 was still out of kilter with all of these amounts.

41. The Applicant had completed an analysis of the amounts charged based on the invoices provided by the Respondent at page 79 of the Bundle. For the period 7 October 2021 to December 2022 the total bill had been £1,127.93. For the period January 2023 to September 2023 the total bill had been £730.50. The Applicant therefore submitted that there was no evidence before the Tribunal to support the Respondent’s charge of £7,052.45.

42. The Respondent had stated in his written documentation submitted to the Tribunal that the increase reflected a correction of under billing by the [NAME] for the previous year. Additionally, a new hallway light had been installed in mid 2022. The Respondent had stated that the actual consumption of electricity was consistent with the building size. Further, the Respondent had stated that they had provided the invoices and [NAME] statement in support of the charge.

10 43. The Applicant stated that there had been no underpayment in the service charge year 2022 and no evidence of underbilling within the documents provided by the Respondent within the Bundle. He further submitted that an additional hallway light would not result in significantly higher electricity charges. Tribunal Decision - Common Parts Electricity - Service Charge Year End 2023 44. The Tribunal accepts the evidence of the Applicant and finds that the amount payable is £750 for the service charge year end 2023. The Tribunal accepts the Applicant’s position that there is no evidence before the Tribunal of any underbilling in previous service charge years such that would explain why the electricity charge for the year end 2023 increased to £7,052.45. Further, the Tribunal does not accept the Respondent’s position that the installation of an additional light would partly explain the increase. The Tribunal was not provided with any bills that substantiated the Respondent’s position that the charge for communal parts electricity for the service charge year end 2023 was £7,052.45.

45. In finding that £750 is payable for the service charge year end 2023, the Tribunal accepts the Applicant’s analysis at page 79 of the Bundle. In this analysis the Applicant summarised the bills provided by the Respondent for the period 7 October 2021 to December 2022, the total of which was £1,127.93. The Applicant then summarised the bills for the period January 2023 to September 2023, the total of which was £730.50. Therefore, based on this analysis, the Tribunal accepts the Applicant’s position that £750 is payable for the 9 month period for the service charge year end 2023. [NAME] - Service Charge Year End 2023 46. The Applicant submitted that the charge of £6,379.64 for [NAME] was excessive. It was the Applicant’s position that the [COMPANY] had paid £2,552 for building [NAME] in 2024; therefore, it would be reasonable for the amount payable for the service charge year end 2023 to be £3,000. The Applicant had included at pages 129 to 155 of the Bundle quotations and the [NAME] policy details that the [COMPANY] had obtained in 2024 and 2025.

47. The Respondent had submitted in their written documentation provided to the Tribunal that, under their policy, the full reinstatement cost was higher than the figure used by the [COMPANY] and, further, that their policy included wider cover. Additionally, the Respondent had submitted that the premium was consistent with the 2022 valuation and that the cost increase reflected the market rise in 2023.

11 Tribunal [NAME] - Service Charge Year End 2023 48. The Tribunal finds that the [NAME] amount was reasonably incurred. Whilst the Applicant stated that the [COMPANY] paid £2,552, the Tribunal accepts the Respondent’s position that the quote was not a like for like quotation given that the rebuild costs are higher. Further, the Tribunal accepts the Respondent’s position that the [NAME] obtained by the [COMPANY] was for the year 2024 rather than 2023, and the Tribunal was not provided with any alternative quotations for the year end 2023. Internal Decorating - £9,204 - Service Charge Year End 2023 49. The Applicant stated that the building was only built in 2018 and therefore, rather than redecorating, touch up work would have been more appropriate.

50. Further, the Applicant submitted that the communal area was quite small and therefore the cost was excessive. The block consisted of 11 flats over two floors, with the communal area consisting only of stairways and stairwells. It was the Applicant’s position that a reasonable amount for the work was £5,000.

51. The Applicant confirmed that he had received the documentation in relation to the section 20 consultation but had made no observations because, at the time, he had been working to establish the [NAME]. Further, the Applicant confirmed that he had been unable to obtain comparative quotations.

52. The Respondent had submitted in their written documentation provided to the Tribunal that the works had been completed in line with the Lease which had provision for cyclical redecoration every 5 years. The Respondent had confirmed that the work covered the communal hall, stairwells and skirting. Further, that the contractors had been chosen following a full section 20 consultation. It was therefore the Respondent’s position that the work was payable. Tribunal Decision – Internal Decorating- Service Charge Year End 2023 53. The Respondent had stated that the internal redecoration was undertaken in line with clause 5.3 of the Lease (Cyclical redecoration every five years). However, clause 5.3 of the Lease relates to [NAME].

54. Paragraph 2 of the First Schedule of the Lease provides that:

12 “As and when the Landlord shall reasonably deem necessary but not more often than every three years to decorate in a good and workmanlike manner the external parts of the Building and the Common Parts and to keep the internal entrances areas and stairways clean and lighted.” 55. Within the Bundle were photographs (pages 84 to 92) showing the work that was completed and at page 80 of the Bundle was the invoice for £7,800, which provided a description of the work completed. Further, at page 82 of the Bundle, was an invoice for £1,404 for the administration costs for the section 20 consultation for the internal decoration.

56. There was no dispute that the section 20 consultation was completed and, further, the Applicant told the Tribunal that he had not provided any comments to the consultation as at the time he was fully engaged with the setup of the [COMPANY].

57. The Tribunal is therefore satisfied that the work was payable under the Lease and, further, in the absence of any alternative quotations, is satisfied that the charge of £9,204 was reasonably incurred. Handover Fee - £1,320 - Service Charge Year End 2023 58. The Applicant stated that the Respondent did not provide any handover documentation to the [COMPANY] and therefore no charge should be made.

59. The Respondent had submitted in their written documentation provided to the Tribunal that that the fee covered the collation of service charge accounts, meter readings, and key register for transfer to the [COMPANY]. Further, the Respondent had submitted that time-costed administration was within the managing agent’s terms and the amount charged was reasonable. Tribunal Decision – Handover Fee - £1,320 - Service Charge Year End 2023 60. The Tribunal accepts the evidence of the Applicant that the [COMPANY] had made several attempts to obtain handover documents but none were provided by the Respondent. However, the Tribunal accepts that, whilst handover documents were not provided, the Respondent did complete work in connection with the handover and that this would have included collation of service charge accounts, meter readings and key register.

61. The Tribunal therefore determines that the handover fee is payable but should be reduced to £500 to reflect the amount of work that was

13 completed by the Respondent, given that handover documents were not provided to the [COMPANY]. [NAME] under section 20C and refund of fees 62. The Applicant made an [NAME] for a refund of the fees that he had paid in respect of the [NAME] and hearing. The Respondent had opposed the [NAME], submitting that the Tribunal has a discretion to award costs or reimburse fees only where it finds the landlord’s conduct unreasonable or where an [NAME] is successful under rule 13 of the Rules. It was the Respondent’s position that neither condition was met.

63. Rule 13 allows for the refund of Tribunal fees. Rule 13(2) states that “The Tribunal may make an order requiring a party to reimburse to any other party the whole or part of the amount of any fee paid by the other party which has not been remitted by the Lord Chancellor.” 64. There is no requirement of unreasonableness in this regard. Therefore, in this case, given the findings made by the Tribunal as set out above, the Tribunal determines that the Respondent shall refund the Applicant’s fee payments totalling £327 (namely £100 [NAME] fee and £227 hearing fee) within 28 days of the date of this decision under Rule 13(2) of the Rules.

65. In light of the findings made, 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. Name: Judge Bernadette MacQueen

Date: 12 January 2026

14

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).