First-tier Tribunal Rules on Service Charges for Maintenance and Decoration

OUTCOME: Allowed

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER

(RESIDENTIAL PROPERTY)

Case Reference : CAM/00KF/LSC/2019/0013

Property : 1 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted]

Type of Application : to determine reasonableness and payability of service

charges for the year 2019 [LTA 1985, s.27A]

Tribunal Members : [NAME], R Thomas MRICS & O N Miller BSc

Date and venue of : Monday 10th June 2019 at

Hearing Southend-on-Sea Magistrates Court

Date of decision : 22nd July 2019

DECISION

• Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . paras 1–3

• Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . paras 4–5

• Disputed lease provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . paras 6–13

• Relevant statutory material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . paras 14–17

• Inspection and hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . paras 18–28

• Discussion and findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . paras 29–42

1. This is an unusual application, as counsel for the respondent was keen to stress

that the parties had not fallen out, remained friends, but that they disagreed on

the precise interpretation of certain provisions in the standard-form lease and

therefore on their respective liabilities to pay under the service charge provisions.

2. The application seeks answers to five questions :

a. Is “decoration” equivalent to “maintenance” including repairs and

replacement of elements which cannot simply be decorated due to

disrepair?

b. Is the balcony demised to the tenant?

c. Regardless of whether it is demised to the tenant, is the balcony and its

balustrade an element of the building’s exterior which should therefore be

maintained and decorated at the landlord’s expense?

d. Are external doors, including those giving access to the balcony, elements

of the building’s exterior which should therefore be maintained and

decorated at the landlord’s expense?

e. Are windows elements of the building’s exterior which should therefore

be maintained and decorated at the landlord’s expense?

3. For the reasons which follow the tribunal determines that :

a. No, decoration is not equivalent to maintenance. It is limited to painting

or papering, with appropriate preparation work

b. Yes, the balcony is used exclusively by and accessed through the upper

maisonette. Although the lease plan is inadequate and fails to include the

balcony it is part of or appurtenant to the demised premises

c. The balcony and balustrade are not only part of the exterior of the

building, the decoration of which are service charge costs, but they are

also an integral part of the design of the building and – as part of its main

structure – the cost of maintenance and repair are also recoverable under

the service charge

d. The external doors, including those giving access to the balcony, form part

of the exterior of the building and the decoration costs are recoverable as

service charge costs. They are not part of the main structure

e. Windows are part of the exterior and, in the case of the two projecting

windows at the side and rear of the building, they are also essential and

significant structural elements of each projecting box and therefore form

part of the main structure of the building.

Background

4. The subject premises comprise an end-terrace house at the junction of [ADDRESS] and [ADDRESS], in a conservation area one block back from the [ADDRESS] and seafront just to the west of the town centre. It has been sub-divided

into a ground floor flat and a first and second floor maisonette, with the two

lessees also being joint freeholders. Recently, after leaks from the ceiling above

the first floor bay window at the front of the maisonette, significant repairs were

required to the balcony which partly rested upon top of it.

5. The work involved repairing the roof above the bay window and rebuilding and

reconfiguring the balcony decking, plus repairing or replacing individual sections

of ornate cast iron balustrade before repainting the whole. The balcony serves

only the applicant’s maisonette, and the parties disagree about who is responsible

for the cost of repair. Is it the responsibility of the applicant alone or of both

lessees, through the service charge provisions in their respective leases?

Disputed lease provisions

6. The tribunal was initially surprised that the lease of the applicant’s maisonette

which was included in the main bundle was dated 8th May 1975, granting a term

of 99 years from that date. By the time of the hearing the unexpired term would

therefore be just under 55 years, making it by then unmortgageable. Fortunately,

however, the respondent also produced a bundle which not only included a lease

of her flat dated 19th September 1990, also for a term of 99 years from 8th May

1975, but two more recent leases. These were :

a. A surrender and lease of the maisonette dated 26th February 2010 between

[NAME] [RESPONDENT] & [NAME] (landlord) and

[APPELLANT] (tenant), for a term of 99 years from that date

at a stepped ground rent and various indemnities, but otherwise subject

to the same terms and covenants as contained in the original lease

b. A deed of variation dated 22nd June 2016 between [APPELLANT]

& [NAME] [RESPONDENT] (landlord) and [NAME]

[RESPONDENT] & [NAME] (tenant), varying the lease of the flat by

extending the term of the lease to 99 years from that date, at a peppercorn

rent. Save for those amendments the terms of the 1990 lease continued

in full force for the duration of the extended term.

7. Ms [NAME] was Mr [APPELLANT]’s predecessor in title as tenant. The terms of the

two new or extended leases have therefore diverged, and in neither case was the

statutory method of obtaining a lease extension employed.

8. On the provisions material to this application, however, the obligations remain

similar – save that by clause 4(2) of the respective leases the maisonette shall

contribute and pay two thirds of the costs expenses outgoings and matters

mentioned in the Third Schedule while the liability of the flat is one third.

9. Beyond a recital that “the flat” means “the interior faces of such exterior walls

which bound the flat the floor structure and ceiling and includes all systems tanks

drains pipes wires ducts and conduits within the same limitations” and a brief

demise of “the first floor and second floor maisonette” (or “the ground floor and

lower ground floor flat”) “as shown for the purposes of identification only on the

plan annexed hereto and there edged red” the lease is unhelpful. In each case the

red outline on the lease plan is exactly the same. Neither shows the balcony. The

demise of the maisonette does however also include the garden coloured green

on the plan. Each demise includes the easements rights and privileges mentioned

in the First Schedule.

10. The first covenant imposed on the tenant, by clause 4(1), is to :

Keep the demised premises (other than the parts thereof comprised and

referred to in sub-clauses (4) and (5) of clause 6 hereof) and all walls party

walls sewers drains pipes cables wires and appurtenances thereto

belonging in good and tenantable repair and condition and in particular

(but without prejudice to the generality of the foregoing) so as to support

shelter and protect the part of the building other than the demised

premises.

11. Clause 6 contains the landlord’s covenants, and sub-clause (4) and (5) provide :

(4) That the landlord will maintain repair decorate and renew (a) the main

structure the foundations and in particular the roof chimney stacks and

rainwater pipes of the building and (b) the gas and water pipes drains and

electric cables and wires in under and upon the building and enjoyed or

used by the tenant in common with the owners and lessees of the other

flat (c) the boundary walls and fences of the building (d) the main

entrances passages landings and staircases of the building so enjoyed or

used by the tenant in common as aforesaid

(5) That the landlord will so often as reasonably required decorate the

exterior of the building in such manner as shall be agreed by a majority of

the owners or lessees of the flats comprised in the building or failing

agreement in the manner in which the same was previously decorated or

as near thereto as circumstances permit and in particular will paint the

exterior parts of the building usually painted with two coats of good paint

at least once every three years.

12. The above provisions, clearly lifted from a template lease for a building with more

than two lessees and shared landings and staircases, therefore limit the extent of

the tenant’s repairing obligations in clause 4(1).

13. The costs to which the tenants must contribute in two thirds / one third shares

appear in the Third Schedule. These include at paragraph 1 the expense of

maintaining repairing and redecorating and renewing the main structure of the

building, its boundary walls and fences, and the main entrance. Paragraph 2

adds the cost of decorating the exterior of the building and paragraph 5 the cost

of building insurance.

Relevant statutory material

14. Section 18 of the Landlord and Tenant Act 1985 defines the expression “service

charge”, for the tribunal’s purposes, as :

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...

15. The overall amount payable as a service charge continues to be governed by

section 19, which limits relevant costs :

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.

Section 19 is not relevant to this enquiry.

16. The tribunal’s powers to determine whether an amount by way of service charges

is payable and, if so, by whom, to whom, how much, when and the manner of

payment are set out in section 27A of the Landlord and Tenant Act 1985. The

first step in finding answers to these questions is for the tribunal to consider the

exact wording of the relevant provisions in the lease. If the lease does not say

that the cost of an item may be recovered then usually the tribunal need go no

further. The statutory provisions in the 1985 Act, there to ameliorate the full

rigour of the lease, need not then come into play.

17. Please also note sub-sections (5) & (6), which provide that a tenant is not to be

taken to have agreed or admitted any matter by reason only of having made any

payment, and that an agreement by the tenant of a dwelling (other than a

post-dispute arbitration agreement)1 is void in so far as it purports to provide for

a determination in a particular manner or on particular evidence of any question

which may be the subject of an application to the Tribunal under section 27A.

Inspection and hearing

18. The tribunal inspected the premises at 10:00 on the morning of the hearing. At

the time of the inspection it was raining and sunken parts of the exterior near the

front door (which is accessed not from [ADDRESS] but from [ADDRESS])

had substantial puddles. From a shared entrance door the applicant’s front door

to the right of a small lobby leads up a winding set of internal stone steps to the

first floor. A second staircase leads up to the top floor, from whence one can

access the balcony to the front of the building through one room and out via an

external doorway. This door is a recent replacement; the previous one having

badly decayed.

19. The building is probably Edwardian, and of a very similar style as the others in

the terrace. The building at each end has a long top floor balcony, with most of

the houses in between having a smaller balcony just over the two-story bay. The

buildings at the northern end are rendered and painted, like the subject property

at the opposite end. The rest have a plain brick finish, save for some stucco

around front entrance arches and some bay windows.

20. At the front of the building (i.e. facing [ADDRESS] and the small park on the

other side of the road) a bay projects at ground and first floor levels. On the

second floor a balcony with ornate cast iron balustrade extends almost but not

quite the full width of the building. It is supported for the main part by iron

brackets anchored into the front wall, and to the left end (when looking from the

street) by the top of the bay. Photographs show that the balcony originally lay

directly over the roof of the bay, surfaced with square floor tiles. Now, rebuilt,

a gap has been left and the timber balcony decking is slatted to facilitate drainage.

Extensive work has been done to refurbish, repair or replace entire cast iron

sections of the balustrade before repainting it.

21. On the top floor a room facing on to [ADDRESS] (see the photograph on page

38) and one at the rear, overlooking the yard, have projecting box sections, like

oriel windows supported on more cast iron brackets, and in which the timber

windows comprise approximately 75% of each box and the entire structure apart

from a small panelled section below and a flat roof above.

22. The kitchen is on the first floor, to the rear. An external doorway leads from here

to a large external timber deck with table and chairs above the ground floor rear

extension of the downstairs flat. Behind the door is a timber shed built against

the rear wall, for the exclusive use of the maisonette. An external timber staircase

leads down to the rear yard, also within the demised premises of the maisonette.

23. The tribunal saw no need to inspect the interior of the ground floor flat, as the

1 Eg. provisions in a lease stating that the landlord’s accountant’s certificate shall be conclusive, or

that any dispute shall be referred to arbitration

issues all relate to work undertaken to the applicant’s maisonette.

24. The hearing lasted an hour and a half. Mr [APPELLANT], an architect, represented

himself while the respondent instructed counsel. The facts were not in dispute;

merely the interpretation of the lease provisions, and whether the past conduct

of the respondent and the applicant’s predecessor in title regarding repairs and

redecoration might alter their obligations under the leases.

25. Each party submitted a written statement of case, with the respondent making

more lengthy written submissions as well.

26. Having consulted the [NAME], the applicant referred to and

submitted short summaries of the following legal authorities (case law) : [NAME]

v [COMPANY],2 Sheffield City Council v [NAME],3 and [NAME] v

[NAME].4

27. The respondent in turn relied upon [NAME] v [NAME],5 [RESPONDENT] v Barr6 and, in oral argument, the definition of “appurtenant

property” in section 112 of the Commonhold and Leasehold Reform Act 2002.7

28. In the respondent’s statement of case and in oral argument certain other

questions were raised, such as whether the rear external staircase and the shed

on the rear deck were appurtenant to the applicant’s demise, and so his exclusive

responsibility.

Discussion and findings

29. In considering the definition of such words as “structure”, “main structure” and

“decorate” the tribunal found various passages in the current edition of Dowding

& Reynolds8 to be of great assistance.

30. In determining the extent of a covenant to repair one must look first to the lease

and definition of the demised premises. One may also consider the plan, if any,

although in the instant case that is not very helpful when considering the finer

detail. One must also consider to what extent an item is properly appurtenant to

2 [2000] 11 WLUK 17; [2000] EG 124 (CS)– The whole of a roof terrace forming the roof of another

flat was part of the exterior fabric and included within the landlord's repairing covenant.

3 [2008] 8 WLUK 192; LRX/146/2007 – External windows on a dwelling-house or building could

be part of its structure or exterior for the purposes of the Housing Act 1985 Sch.6 para.14(2)(a)

4 [1991] 1 EGLR 261; (1992) 24 HLR 1 – The “structure” of a dwelling-house consisted of those

elements of the overall dwelling-house which gave it its essential appearance, stability and shape.

5 [1979] QB 525, CA – The word “appurtenance” will not be understood to extend to any land which

would not pass under a conveyance of the principal subject matter without being specifically

mentioned; that is to say, to extend only to land or buildings within the curtilage of the principal

subject matter

6 [2014] EWHC 3968 (TCC) ([NAME] J) – A dwelling, as well as the individual apartment

described in the lease, may possibly extend to other parts of the building which the occupiers of

the apartment have in practice exclusive access of living – such as their balcony

7 ...any garage, outhouse, garden, yard or appurtenances belonging to, or usually enjoyed with, the

building or part or flat

8 [NAME] : Dilapidations : Law and Practice (6th ed – 2018, Sweet & Maxwell)

the demised property, is a projection form it, or a fixture that was present at the

commencement of the lease, and thus to be enjoyed with the premises demised.

However, the tribunal must first consider what constitutes the “main structure”

and then whether that includes anything attached to it.

31. In [NAME] v [NAME] Mr [NAME] [NAME] QC provided what the Court of

Appeal in Grand v Gill9 later described as a “good working definition” of the word

“structure” by observing :

I have come to the view that the structure of the dwellinghouse consists

of those elements of the overall dwelling house which give it its essential

appearance, stability and shape. The expression does not extend to the

many and various ways in which the dwellinghouse will be fitted out,

equipped, decorated and generally made to be habitable.

32. The authors of [NAME] argue, at 7–38, that despite this “good

working definition” :

...the question of what constitutes the structure in any particular case will

ultimately depend upon the proper construction of the lease in question.

In many cases, the lease will itself provide some guidance as to what is

meant. Where that is not the case, the correct approach will be to seek to

identify those parts of the uilding that, having regard to the language and

scheme of the lease as a whole, the objective background facts known to

both parties at the date of the lease and the guidance given by the above

cases, the parties must be taken to have regarded as comprising the

structure. In the case of a separate, self-contained building, these will

include, at the very least, all those parts of it which have to do with its

stability and protection from the elements. On this basis, the structure of

a traditionally built building will extend on any view to the roof,

foundations and load-bearing walls. Depending upon the circumstances,

it is likely to include other items as well.

33. At 7–39, they suggest that the expression “main structure” will generally indicate

a more restrictive meaning than “structure” alone. As always, however, the

question is one of construction in every case.

34. Finally, it is worth noting Blundell v [APPELLANT],10 in which a house was let

containing a tenant’s repairing covenant which expressly excluded liability for

“structural repairs to the foundations roof main walls and drains.” [NAME] J did

not attempt any definition of “structural repairs”, but held that repairs to a

balustrade forming the boundary of a balcony at first-floor level were not within

the exception. His reasoning was that it was not a wall at all, still less a main wall,

and in any event, the repairs were not structural because the balustrade was not

part of the structure but was simply a “piece of decoration.”

35. Applying the facts of this case the tribunal respectfully disagrees. The covenant

in [NAME] excluded liability for structural repairs to “main walls”. The covenant

in this case refers merely to the “main structure”. Further, while [NAME] J did

not regard a balustrade as a wall, and that it was simply “a piece of decoration”,

9 [2011] 27 EG 78

10 (1958) 171 EG 491

those seeking to apply Part 1 of the Housing Act 2004 and the provisions of the

Housing Health and Safety Rating System would take a very different view. The

balustrade is both an essential safety feature and, by tying back into the wall at

each end, creates a box structure that provides the balcony with some structural

integrity.

36. At 7–41 the authors turn to the meaning of the term “exterior” :

Prima facie, the “exterior” will include all external parts of the building or

unit, i.e. the roof and the structure supporting it, chimneys, external

cladding, all outside gutters and pipes, outside walls and external doors.

It will generally also include windows and window frames. Thus, in [RESPONDENT]

v [RESPONDENT] the landlord of a [NAME] covenanted to do “outside

repairs”. It was held that this included windows, “the windows being part

of the skin of the house”.

37. In [NAME] v [COMPANY],12 however, [NAME] J

disagreed with the submission that the expressions “structure and exterior” were

to be read as covering much the same thing. He said that it was arguable, for

instance, that the outside of the windows or doors are not part of the “structure”,

but they are undoubtedly part of the “exterior.”

38. The Cambridge English Dictionary definition of “decorate” is “to paint the inside

or outside of a house or put paper on the inside wall.” According to [NAME], at Chapter 15, an obligation to decorate usually arises in one of two

ways: as part of the work required under a covenant to repair, or by virtue of an

express covenant to decorate. Even if the covenant to repair makes no express

reference to redecorating previously painted parts, the covenant will ordinarily

apply both to the painted surface and the underlying fabric – but to what extent?

In considering the extent to which the obligation requires the covenantor

to repaint, two aspects of the law relating to the general covenant must be

borne in mind: first, no work is required until the subject matter of the

covenant is in a damaged or deteriorated condition; and second, no

remedial work is required until the nature of the relevant damage or

deterioration is such as to bring the subject-matter below the

contemplated standard. It follows that a covenant to repair does not oblige

the covenantor to do any painting until the condition of the existing

paintwork is defective to such an extent as to fall below the appropriate

standard.13

39. An express covenant to decorate does not relieve a tenant of its obligation to do

so under its repairing covenant, but the covenant to decorate is additional to it.

In the Australian case of Gemmell v Goldsworthy14 [NAME] J said that :

The term to paint every two years is absolute and unconditional. It had to

be done whether it was apparently necessary or not, whereas the duty

under the term to repair was to ‘keep up’ the condition of the painting

11 (1879) 23 SJ 656

12 [2000] L&TR 428

13 [NAME], at 15–03

14 [1942] SASR 55

during the intervening period of two years only if and when it was

necessary and proper to do so.

40. It follows that “decorate” cannot be equated with “maintain”, as argued for by Mr

[APPELLANT]. It is a more limited covenant in scope, but if required to be done with

a specified frequency then it must be done, whether objectively necessary or not.

41. The tribunal therefore determines that :

a. “Decorate” cannot be equated with “maintain”. It is an entirely separate

covenant

b. The balcony is property only accessible to and enjoyable with the upper

maisonette, and is thus at least appurtenant property, even if not formally

demised

c. The balcony is part of the main structure, for maintenance purposes, and

is also part of the exterior, to be decorated as a service charge expense

d. External doors are part of the exterior, for decoration purposes, but are

not part of the main structure for purposes of maintenance and repair

e. The outside of the windows also form part of the exterior. However, in the

case of the two projecting windows at the side and rear of the building,

they also comprise essential and significant structural elements of each

projecting box and thus are part of the main structure of the building : see

the photographs at pages 38 and 48 of the main bundle.

42. Some additional points were raised by the respondent. The tribunal considers

that the rear decking outside the appellant’s first floor kitchen is appurtenant to

the maisonette, as are the external steps leading down to the rear yard which is

expressly demised with the maisonette. While the shed has been built against the

rear wall, the tribunal does not regard it, unlike the balcony, as an integral part

of the structure or main structure of the building. Responsibility for the repair

of all these items therefore lies with the lessee of the maisonette. As part of the

exterior, however, their decoration is a legitimate service charge expense.

Dated 22nd July 2019

[NAME]

First-tier Tribunal Judge