First-tier Tribunal Rules on Tenant's Service Charge Liability

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AW/LSC/2024/0280 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] [ADDRESS] ([ADDRESS]) [COMPANY] (2) Representative : [NAME] and [RESPONDENT] Respondent : [redacted] : In person Type of application : For the determination of the liability to pay service charges under section 27A of the Landlord and Tenant Act 1985 Tribunal members : Mrs [APPELLANT] Ms [APPELLANT] : 10 [ADDRESS] [POSTCODE] Date of decision : 20 December 2024

DECISION

2 Decisions of the tribunal (1) The tribunal determines that the sum of £2,785.86 is payable by the Respondent in respect of the outstanding service charges. (2) The tribunal makes the determinations as set out under the various headings in this Decision. The application 1. The Applicant seeks a determination pursuant to s.27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) as to the amount of service charges payable by the Respondent in respect of the service charge years 1 April 2023 –30 September 2024 in the sum of £5,437.93.

. The hearing 2. The Applicant was represented at the hearing by Mr [APPELLANT] of [RESPONDENT] and the Respondent appeared in person. The background 3. The property which is the subject of this application is a flat within a purpose built block of 77 flats.

4. 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.

5. There was no dispute that the Respondent holds a long lease of the property which requires the landlord to provide services and the tenant to contribute towards their costs by way of a variable service charge. No copy of the lease in respect of the subject property was available, the parties did not have a copy and the Land Registry had confirmed that none was held for this flat. A specimen lease, that related to flat 73 was provided in the bundle and was said to be in the same form as other leases, copies of which were held by the landlord or had been seen by the applicant’s solicitor. The issues 6. At the start of the hearing the parties identified the relevant issues for determination as follows:

3 (i) Whether the service charge obligations in the lease of Flat 73 should be accepted as being the same, bar the percentage contribution, for Flat 61. (ii) The payability and/or reasonableness of the interim service charges for 1 April – 30 September 2023 as the remaining service charge the subject of the application had been paid by the Respondent prior to the hearing. (iii) Whether the interim service charge demand for 1 April – 30 September 2024 had been properly served.

7. Having heard evidence and submissions from the parties and considered all of the documents provided, the tribunal has made determinations on the various issues as follows. Service charge clause in the lease 8. Mr [NAME] said that he had seen a number of leases for the flats within the block which had all been granted at a similar time. In each case the service charge provisions were identical. He asked the Tribunal to find that on the balance of probabilities that the service charge obligations in the lease for Flat 61 were the same as those in the lease for flat 73, other than the percentage contribution. A list of the individual contributions was attached to each of the leases.

9. Mr [NAME] said that he would have accepted that to be the case if he had been shown several leases. The tribunal’s decision 10. The tribunal determines that on the balance of probability the service charge clauses in the lease for Flat 61 were the same as those in the lease for Flat 73. Reasons for the tribunal’s decision 11. It is usual for leases within a purpose built block, where the leases were issued at a similar time and were coterminus, to each have similar rights and obligations. This is to enable the smooth management of the building. The Tribunal accepted the statement of Mr [NAME] regarding the content of other leases pertaining to flats within the block. Service charges 12. Mr [RESPONDENT] said that the Respondent had not challenged any of the individual service charge items. There was no completed Scott Schedule

4 in accordance with the tribunal’s Directions dated 22 July 2024. If the Respondent has accepted the sums then the Tribunal would have no further jurisdiction. He had asked the Respondent to confirm that he was not challenging the amounts however he had not received a substantive reply.

13. He called Mr [NAME] of [COMPANY], the managing agents for the block, to give evidence. He confirmed that the service charge accounts for the year ended 30 September 2023 had been served on all lessees prior to the Annual General Meeting of the Management Company in October 2024. The budget for the year ended 30 September 2024 would have been sent with the 1 October service charge demands.

14. He confirmed that a payment of £2,785.86 had been refunded to the Respondent’s account on 18 March 2024 on the advice of the company’s solicitor. He also accepted that the service charge due on 1 April 2024 was accepted by the managing agent.

15. Under cross examination he confirmed that neither he, nor the managing agent’s owner, had any formal professional qualifications. Furthermore he did not have hands on experience of managing this particular block. It was unfortunate that Mr [NAME], who dealt with the day to day management of the block was unable to attend the hearing. He said that he was not familiar with the RICS Code of Management Practice although he knew of its existence. Solicitors were instructed when a lessee was one month in arrears to ensure that there were sufficient funds to run the block.

16. Mr [NAME] asked why he had not been advised that his payment of £2,785.86 was being returned to him at the time. He also asked if the Board were aware that Mr [NAME] had not replied to his request to pay off the arrears at £400 per month. Mr [NAME] was not able to assist since he had not been involved with the block at the time.

17. Mr [NAME] said that he had a number of health issues at the time that the arrears arose. He had owned the flat since 1997 and had previously been up to date with the service charge payments. He had made numerous attempts to discuss the situation by either email or telephone but Mr [NAME] had not responded in any meaningful way.

18. He had not received the service charge demand for 1 April 2024. There had been two copies of the rights and obligations attached to the email from the managing agent. He had advised the managing agent that he had not received the demand on 24 April 2024. The first sight of the demand was in the bundle for the hearing. He had paid the bill promptly on receipt of the bundle as he was concerned that he would be threatened with forfeiture as was the case after his payment had been returned earlier in the year.

5 19. He confirmed that he had not disputed the amount of the service charge but considered that the management company had been unreasonable in their treatment of him regarding the arrears. He would have challenged the management fee on that basis but felt it would have complicated the case. The tribunal’s decision 20. The tribunal determines that the amount payable in respect of the outstanding service charge is £2,785.86. Reasons for the tribunal’s decision 21. The Respondent has already settled the other amounts which were claimed when the Application was made. The original amount claimed included the service charge for 1 April – 30 September 2024. The Tribunal determines that that demand had not been properly served and therefore the sum claimed in respect of the demand for 1 April-30 September 2024 was not payable at the time of the application.

22. The Respondent has not disputed the amount in arrears: he thought that as he had paid it initially he had complied with his obligations but of course it needed to be returned to the Applicant to balance his account. Application under s.20C and refund of fees 23. At the end of the hearing, the Applicant asked about the costs incurred by the Applicant. Mr [APPELLANT] confirmed that the Applicant would be looking to add the costs to the Respondent’s service charge account.

24. An application under s20c may be made after receipt of the decision. If such an application is made then Directions will be issued and the application will be decided based upon written representations by the parties.. Name: [NAME]: 20 December 2024

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 application for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case.

6 The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application 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 making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).