First-tier Tribunal rules on service charges and costs for leaseholders

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

HAV/40UD/LSC/2025/0627

Property

:

5 [ADDRESS], [POSTCODE]

Applicant

:

[redacted]

:

Respondent

:

[redacted]

:

[COMPANY_4] of Application

:

Determination of liability to pay and reasonableness of service charges Section 27A Landlord and Tenant Act 1985

Tribunal Member

:

Judge R Cooper

Date of Decision

:

14 October 2025

DECISION

In summary,

(i) the sum of £154.56 in respect of the Applicant’s 20% share of the costs of drainage clearance and abortive visit costs of the scaffolding company are not recoverable from him in the service charge for the period ending 29 September 2024.

2 (ii) Orders are made for the benefit of the Applicant, [NAME_5] and [NAME_6] under s20C of the Landlord and Tenant Act 1985 and paragraph 5A of Schedule 11 of the Commonhold and Leasehold Reform Act 2002 that the costs (if any) of these proceedings may not be recovered through the service charge or as an administration charge.

(iii) The Respondent is to pay the application fee of £110 to the Applicant.

(iv) The Respondent’s application costs order pursuant to Rule 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 is refused.

In this decision references to the [NAME_1] number of the documents are referred to thus [ ]. Background 1. On 19 February 2025 the Tribunal received an application from [NAME_1] (‘the Applicant’) for determination of liability to pay and reasonableness of service charges for the 2024 accounting year in respect of 5 [ADDRESS], [POSTCODE] (‘the Property’). He also sought an order pursuant to Section 20C of the Landlord and Tenant Act 1985 on behalf of himself and two other leaseholders ([NAME_5] and [NAME_6]) [7].

2. The Respondent to the application is [COMPANY_3]. [COMPANY_4] (‘[NAME_4]’) are the managing agents for the Property.

3. A case management hearing took place on 18 July 2025 attended by both parties, when directions were given as to the provision of information. Those directions have been complied with.

4. On 2 October 2025 the Tribunal reviewed and decided the matter remained suitable for determination on the papers without a hearing.

5. There was no inspection of the Property. None was requested and none was considered necessary for a fair determination of the issues.

The Issues for the Tribunal

6. The principal issue for the Tribunal to decide is whether the service charge for the Property is reasonable and payable in the 2024 accounting year. The only area of dispute in relation to the service charge are two items challenged by the Applicant: [redacted] £292.80 charged for clearance of a drain • £480.00 charged for wasted trips by a scaffolding company.

7. In addition, there is the issue of costs. The Applicant seeks an order under s20C of the 1985 Act preventing costs relating to the application

3 being added to the Service Charge in respect of himself and two other leaseholders. The Respondent seeks a costs order against the Applicant on the basis that he has unreasonably pursued the application despite their settlement offer.

The Property

8. [ADDRESS] (Title Number ST119875) is one of 7 properties situated around a small courtyard behind [ADDRESS] in Wincanton. Access to the courtyard is off [ADDRESS] through an archway between numbers 1 and [ADDRESS]. Number [ADDRESS] appears to be a studio flat situated above the archway [76]. The entrances to all seven properties are either directly off the courtyard or within the arched entrance to the courtyard. None has an entrance directly onto [ADDRESS]. There is space for parking in the courtyard for seven vehicles which appears unassigned [76].

9. [ADDRESS] is an upper floor flat on the first and second floors, situated above number 4. It is one of four properties (numbers 3 to 6) that appear to have been developed at the same time.

The Applicant’s lease

10. The lease for [ADDRESS] was granted by [COMPANY_16] to [NAME_7] on 4 March 1988 for a term of 999 years from 25 December 1986. There is no information as to when it was assigned to [NAME_1]. All four leases of properties in the same Building are said to be in the same or similar terms.

11. In summary, the provisions of the lease relevant to this application are as follows [54] to [65]:

(i) The Lessee’s obligations are set out in Clause 3 and 7. The Lessee agrees amongst other things to pay the rent (Clause 3(1)) and to allow the Lessor and his agents and others to enter the premises to decorate or undertake maintenance and repairs on the giving of seven days’ notice (Clause 3(7)).

(ii) By Clause 7(i) the Lessee covenants to pay yearly in advance 20% of the Lessor’s written estimate of the ‘Total Service Cost’ (or ‘annual subscription’) on the annual rent day (the 29 September each year). Clause 7(ii) defines the Total Service Cost as the aggregate amount for the forthcoming year ‘...reasonably expended by the Lessor or its Managing Agents in the performance of its obligations under the lease’ together with ‘the amount of any reserve reasonably required’ for maintenance and repairs.

(iii) Clause 7(iii) provides for the estimate of the Total Service Cost to be given before the annual rent day. It also provides for a balancing arrangement at the end of the accounting year. It requires a certificate to be provided by auditors as soon as practicable and

4 within 4 months of the annual rent day. Any balance owed by the Lessee (due to any shortfall) or by the Lessor (if the estimate exceeded the costs) is to be paid within 14 days of the certificate being served.

(iv) In relation to the Lessor’s covenants, clause 5(2)(i) provides that the landlord/freeholder will

‘maintain repair and (as necessary) renew the main structure of the Building including the roof…and all installations…and to keep the common parts grounds and all structures sewers drains gutters pipes….in and upon or serving the Building…in good and tenantable repair and condition PROVIDED ALWAYS that the Lessor will not commence any repair or maintenance (otherwise than in an emergency) until seven days after the Lessor shall have served notice on the Lessees of its intention to carry out the works specified…and the approximate cost thereof’ [63].

The Law 11. The law relevant to this application is set out in full in the appendix to this decision.

12. Section 18(1) of the 1985 Act defines ‘service charge’ as ‘an amount payable by a tenant … which is payable, directly or indirectly, for services … and … the whole or part of which varies or may vary according to the relevant costs’. Section 18(2) defines ‘relevant costs’ as ‘the costs or estimated costs incurred or to be incurred by or on behalf of the landlord … in connection with the matters for which the service charge is payable.’

13. Under s27A of the 1985 Act the Tribunal has the jurisdiction to determine whether a service charge is payable and, if it is;

(a) the person by whom it is payable,

(b) the person to whom it is payable,

(c) the amount which is payable,

(d) the date at or by which it is payable, and

(e) the manner in which it is payable.

14. A service charge is only payable to the extent that it has been reasonably incurred and if the services or works for which the service charge is claimed are of a reasonable standard (s19 of the 1985 Act). When service charges are payable in advance, no more than a reasonable amount is payable.

5 15. Under s20C a leaseholder may apply for an order that all or any of the costs incurred by a landlord in connection with proceedings before a tribunal are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant or any other person or persons specified in the application.

16. A leaseholder may also apply to the Tribunal under paragraph 5A for an order which reduces or extinguishes the tenant’s liability to pay an “administration charge in respect of litigation costs”.

Discussion and conclusions

17. The Applicant challenges the inclusion in service charges claimed for the accounting year ending 29 September 2024 the costs allegedly incurred in clearing a blocked drain and wasted trip fees charged by a scaffolding firm unable to erect scaffolding due to parked. He also seeks an Order under s20C of the 1985 Act for costs of the application not to be recovered through the service charge. His case is set out in the application [3] to [13], his statement [33] to [45] and supporting evidence and his response to the Respondent’s case [50] to [51].

18. In summary, [NAME_1] challenges the payment of £292.80 invoiced for drain clearance on 29 September 2024 by [COMPANY_8]. He says there was no blocked drain outside [ADDRESS] requiring clearing and no work was undertaken by a contractor for a blocked drain justifying the charge. He says that there was a mains water leak outside [ADDRESS] that he reported on several occasions to the Respondent between June and August 2023 but no effective action was taken by [NAME_4]. [NAME_9] eventually repaired the leak free of charge on 4 September 2023 following [NAME_1]’s call on 31 August 2023. The Applicant questions why an invoice would be provided in August 2024 for work carried out in August 2023 and says the company who allegedly carried out the work is recorded as a dormant company on [NAME_17] website. He therefore questions the validity of the invoice attributed to the service charge.

19. In relation to the wasted trip fees by the scaffolding company, the Applicant says it was unreasonable for the leaseholders to be charged for abortive visits because [NAME_4] failed to take appropriate steps to prevent non-residents as well as residents from obstructing the area where scaffolding would be erected. Specifically, he says the Respondent failed to notify the occupiers of [ADDRESS] and [ADDRESS] they should remove their cars from the pavement to allow the scaffolding to be erected on the pavement.

20. The Respondent’s case is set out in the witness statements of an unnamed individual from [NAME_10] [46] to [49] and supporting documents.

21. In summary, the Respondent says the sums for drain clearance and wasted trips were properly applied to the service charge. In relation to

6 drain clearance it relies on the invoice from [COMPANY_8] dated 29 August 2024 [119] which confirms the contractor attended the site to inspect a leak, found to the drain blocked and overflowing, removed the manhole cover and cleared the blockage by jet washing. The Respondent does not dispute that [NAME_9] attended to repair a leak, but says this was outside [ADDRESS], not the manhole outside number 5 [47].

22. In relation to the costs for wasted trip by the scaffolding company, the Respondent said it provided adequate notice to residents but was unable to prevent obstruction of the pavement on which vehicles were parked. As there were wasted attempts to attend and erect scaffolding, the charges were properly applied to the service charge.

23. The Respondent seeks a wasted costs order under Rule 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 against the Applicant. It says it offered the Applicant 100% of the charges he would be liable for (£154.56) together with the application fee, and the Applicant’s insistence on continuing with the proceedings is wholly unreasonable.

24. The Tribunal made its decision for the following reasons.

The drain clearance costs

25. Having considered the totality of the evidence and submissions by both parties, the Tribunal finds the Respondent has not demonstrated on the balance of probabilities that the cost of £292.80 (including VAT) for drain clearance were costs reasonably incurred in the 2024 accounting year or at all.

26. In response to the application, [NAME_10] says the charge of £292.80 relates to clearance of a blocked drain outside number [ADDRESS], which, it says, is different from the reported water leak outside number 3 [43]. It is said the contractor was called in response to a report and carried out works, and the date of August 2024 for invoice simply reflects the company’s billing process.

27. In view of the nature of the Applicant’s objections, his assertion that there was never a blocked drain outside number 5 (or 4) and only ever the water leak outside number 3 in the summer of 2023, and the significant amount of information and evidence supplied to support his objections, the Tribunal finds the Respondent has provided little in the way of evidence to support its position. In making a finding these costs were not reasonably incurred, the Tribunal has given considerable weight to the Respondent’s failure to produce any coherent evidence demonstrating that a report was made to [NAME_4] about a blocked drain outside number 5 requiring clearance and jet washing.

28. The email from [NAME_11] at [109] (produced by the Applicant) refers to a report being made by [NAME_12], but this is a fact denied by [NAME_1]. He

7 says he reported a mains water leak outside number 3 in June to August 2023 and there was never a blocked drain outside number 5. The Tribunal finds there is a substantial amount of evidence supporting [NAME_1]’s account of events regarding this leak in 2023, including his correspondence with [NAME_4] and the confirmation from [NAME_9] of their response.

29. If a separate report had been made about a blocked drain outside number 5, the Tribunal was satisfied that a managing agent could reasonably have been expected to produce a copy of either the logged telephone call or email showing the date on which a report was made, yet no such evidence has been provided by [NAME_4]. Nor has any evidence been produced by the Respondent demonstrating the date on which and the means by which the contractors were booked, or the date any works were carried out. The invoice at [119] is silent about the date on which the contractor attended. An email from [NAME_11] provides quotes allegedly from an email from the contractors regarding their attendance on 31st August [115] yet the contractor fails to say in which year this attendance tool place. As the original email has not been produced, this evidence is given little weight as regards a valid cost chargeable to the service charge in the year ending 29 September 2024.

30. The Respondent also fails to deal with the Applicant’s concern regarding an invoice being paid to what, according to the evidence from [NAME_17], appears to have been a dormant company between July 2020 and July 2023.

Wasted trip costs

31. In relation to the charges applied to the service charge account in respect of wasted trip costs invoiced by the [COMPANY_13] in October 2023 the Tribunal finds these costs were not reasonably incurred by the Managing Agent, and are, therefore, not payable.

32. In reaching this conclusion, the Tribunal is satisfied that no evidence has been produced of the contract between [NAME_4] and the [COMPANY_13] demonstrating those charges were properly payable.

33. In any event, the Tribunal is also satisfied the Managing Agent failed to take appropriate steps given the location of the works and the nature of the neighbourhood to ensure scaffolding could be erected as planned on the pavement of [ADDRESS] on the dates proposed.

34. It appears that all that was done by the Managing Agents was to update [NAME_4]’s website asking leaseholders not to park their vehicles [47]. The email from [NAME_11] produced by the Applicant states a letter was sent to ‘the development’ [109] but no evidence of such notification has been provided.

35. The Applicant says local residents, for whom [NAME_4] is not the managing agent, but who were affected by the works were not notified

8 appropriately regarding the need to clear the area to allow for the erection of the scaffolding for the duration of the roof works. The Tribunal finds that this complaint is made out on the evidence before it.

36. The Respondent in its solicitor’s statement says that the Managing Agent has no legal authority to enforce traffic restrictions or impose cordons. However, the Tribunal is satisfied [NAME_4] could have obtained such authorisation from the local authority. However, there is no evidence of any enquiries being made about obtaining a temporary traffic order in relation to [ADDRESS] for the period of the works to the roof. Nor is there anything in the evidence provided by the Respondents to demonstrate that permission was obtained from the local authority either by them or the [COMPANY_13] for scaffolding to be erected on the pavement of [ADDRESS].

37. Given the evidence that has been provided by the Applicant regarding the nature, location and arrangement of properties, and publicly available evidence from Google street view showing pavement parking all along [ADDRESS], including outside [ADDRESS], the Tribunal is satisfied that the Managing Agents could reasonably have been expected to anticipate there might have been potential difficulties in erecting scaffolding and to have taken appropriate steps either itself or in conjunction with the scaffolding company to avoid abortive visits.

38. In addition to alerting residents in the development for which they were the managing agents, the Tribunal is satisfied [NAME_4] should, in a timely manner, have put up signage for other local residents indicating the date(s) and location on which scaffolding was to be erected. [NAME_4] could also reasonably have been expected to place notices on parked cars that might obstruct the works and deliver notices to other properties in the immediate vicinity to alert them about the date on which scaffolding was to be erected requesting them not to park in the area. The Tribunal gives significant weight also the statement of [NAME_5] which confirms that after the first abortive visit he informed [NAME_14] of [NAME_4], that a car preventing the erection of the scaffold belonged to the occupier of [ADDRESS] [136], yet no notice was sent to that resident by the Respondent in advance of the second visit.

39. Based on the totality of the evidence, the Tribunal is not satisfied that the Respondent has demonstrated these wasted trip costs were reasonably incurred. They should not, therefore, be added to the service charge as payable by the leaseholders.

Costs

40. In considering whether an order for costs should be made against the Applicant pursuant to Rule 13, the Tribunal has applied the stepped approach advised by the Upper Tribunal in [ADDRESS] (No 5) Limited v Alexander [2016] UKUT 0920 (LC) (which followed the principles established by Ridehalgh v Horsefield [1994] EWCA Civ 40). The Tribunal has considered

9 (i) Whether the Applicant acted unreasonably in pursuing his application after a settlement proposal was made (an objective test) (ii) If so, whether an order be made, and, if so (iii) What should such an order be?

41. The Respondent says the Applicant has acted unreasonably by pursuing this application despite the Respondent in open correspondence agreeing that [NAME_1] does not need to pay his 20% share of the disputed items (£154.56). The Respondent rightly points out that [NAME_1]’s application is personal to himself. He has not been appointed to represent all of the other leaseholders. The Respondent says it also offered to pay the Applicant’s costs of his application to the FTT (£110).

42. The Tribunal has considered whether, on an objective basis, the Applicant has acted unreasonably in pursuing his application in the light of the Respondent’s offer taken at its highest (i.e. waiving the service charge element of £154.56 attributable to the Applicant and payment of the £110 application fee).

43. The Respondent asserts the Applicant’s behaviour is unreasonable in the light of the ‘unequivocal nature of the offer’ [48]. It is somewhat surprising, therefore, that the Respondent has produced no evidence to the Tribunal of the offer or when it was made. Nor has any evidence has been provided showing the costs sought by the Respondent under Rule 13.

44. The Applicant in his response accepts that an offer was made to settle but says this was on the basis that there was no admission of liability. He says the Tribunal should decide whether the charges were reasonable. He says his behaviour was not unreasonable, he made efforts to resolve matters [51].

45. Having considered the totality of the evidence, the Tribunal is not satisfied that the Applicant’s decision to persist with his application was objectively unreasonable. The Applicant was clearly concerned that what he saw as potentially significant legal costs could be added in relation to items which he considered should not reasonably have been included in the service charge [11].

46. Whilst the Applicant confirms the Respondent offered to waive the £154.56 payable under the service charge, there is no evidence supporting the Respondent’s statement to have offered reimbursement of the application fee of £110. Nor is there any indication of any legal fees that might be recovered through the service charge or that the offer provided that such legal costs would also be waived.

47. In the particular circumstances of this case, the Tribunal finds that the Applicant’s decision to proceed was not objectively unreasonable. He had made an application under s20C of the 1985 Act both on behalf of himself and [NAME_5] and [NAME_6] (two of the other leaseholders). In the absence of any confirmation from the Respondent

10 that legal fees would not be added to the service charge, the Tribunal finds it was not unreasonable for the Applicant to continue with his application.

48. Even if the Tribunal were wrong to have decided that objectively the Applicant acted unreasonably, it would have decided that an order should not be made under Rule 13. This is because the Applicant’s case succeeds, including his application under s20C which benefits also the other named leaseholders, and the Respondent has provided no information as to the amount of its costs.

49. Having reached that conclusion there is no need to proceed to consider the matter further.

50. In relation to the Applicant’s application under s20C of the 1985 Act, the Tribunal makes its decision for the following reasons.

43. An order under either section 20C of the 1985 Act or paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 only has significance if there are provisions in the lease that allow the costs of the tribunal proceedings to be recouped through a service and/or administration charge. The Tribunal has made no express finding on this issue.

44. In deciding whether to make an order under either section 20C or paragraph 5A the Tribunal must consider what is just and equitable in the circumstances. The circumstances can include the conduct of the parties and the outcome of the proceedings.

45. The result of this application is that the Applicant has succeeded in relation to the issues in dispute, namely the drainage and wasted visit cost. The Applicant was entitled to make this application, and on that basis the Tribunal determines that it is just and equitable for orders to be made that

(i) to such extent as they may otherwise be recoverable, the Respondent’s costs, if any, in connection with these proceedings are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the Applicant, [NAME_5] and [NAME_6], and

(ii) the Applicants shall not be liable to pay an administration charge in respect of those costs.

46. In respect of the application fee of £110 for the same reasons the Tribunal orders that the Respondent repay this to the Applicants.

Judge R Cooper Dated 14/10/2025

11 Appeals 1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the Regional office that has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision, and should be sent by email to [EMAIL].

3. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.

Appendix – the Law The Landlord and Tenant Act 1985 Act (as amended) provides: Section 18 Meaning of “service charge” and “relevant costs” 18(1) In the following provisions of this Act ‘service charge’ means an amount payable by a tenant of a dwelling as part of or in addition to the rent— (a) which is payable, directly or indirectly, for services, repairs, maintenance, improvements or insurance or the landlord's costs of management, and (b) the whole or part of which varies or may vary according to the relevant costs. (2) The relevant costs are the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with the matters for which the service charge is payable. (3) For this purpose— (a) ‘costs’ includes overheads, and (b) costs are relevant costs in relation to a service charge whether they are incurred, or to be incurred, in the period for which the service charge is payable or in an earlier or later period. Section 19 Limitation of service charges: reasonableness

12 (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. (2) Where a service charge is payable before the relevant costs are incurred, no greater amount than is reasonable is so payable, and after the relevant costs have been incurred any necessary adjustment shall be made by repayment, reduction or subsequent charges or otherwise. Section 20c Limitation of service charges: costs of proceedings (1) A tenant may make an application for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before....the First-tier Tribunal....are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant or any other person or person specified in the application. ... Section 27A Liability to pay service charges: jurisdiction (1) An application may be made to the appropriate tribunal for a determination whether a service charge is payable and, if it is, as to – (a) the person by whom it is payable, (b) the person to whom it is payable, (c) the amount which is payable, (d) the date at or by which it is payable, and (e) the manner in which it is payable. (2) Subsection (1) applies whether or not any payment has been made. (3) An application may also be made to the appropriate tribunal for a determination whether, if costs were incurred for services, repairs, maintenance, improvements, insurance or management of any specified description, a service charge would be payable for the costs, and if it would, as to – (a) the person by whom it is payable, (b) the person to whom it is payable, (c) the amount which is payable, (d) the date at or by which it is payable, and (e) the manner in which it is payable. (4) No Applications under subsection (1) or (3) may be made in respect of a matter which – (a) has been agreed or admitted by the tenant, (b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which the tenant is a party, (c) has been the subject of determination by a court, or (d) has been the subject of determination by an arbitral tribunal pursuant to a post- dispute arbitration agreement.

13 (5) But the tenant is not to be taken as having agreed or admitted any matter by reason only of having made a payment. ... Paragraph 5A to Schedule 11 of the 2002 Act (as amended) provides: Limitation of administration charges: costs of proceedings (1) A tenant of a dwelling in England may apply to the relevant court or tribunal for an order reducing or extinguishing the tenant’s liability to pay a particular administration charge in respect of litigation costs. (2) The relevant court or tribunal may make whatever order on the application it considers to be just and equitable ..

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