First-tier Tribunal Rules Service Charges for Lift Renovations Reasonable

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00BK/LSC/2025/0939 Property : 38-39 Rutland Gate, London [POSTCODE] and 51-52 [ADDRESS] [POSTCODE] Applicant : [redacted] : [APPELLANT] Respondents : [redacted] London [POSTCODE] and 51-52 [ADDRESS] [POSTCODE] 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] Mrs [NAME] Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 2 April 2026

DECISION

2 Decisions of the Tribunal (1) The Tribunal determines that the sum of £244,651 inclusive of VAT claimed by the Applicant is payable by the Respondents and is reasonable in respect of service charge costs payable by the Respondents. (2) The Tribunal makes orders under section 20C of the Landlord and Tenant Act 1985 in relation to whether the Landlord’s costs of the Tribunal proceedings may be passed to the Respondent [NAME] through any service charge as set out below in this Decision. The application 1. By an application received on 30 June 2025, 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 Respondents in respect of the service charge year end 2023 and 2024 and for the future year end 2025. The total said to be in dispute in the application was £210,000. The costs relate to the renovation of the lift in the main building.

2. A schedule of Respondent [NAME] is annexed to this decision.

Background 3. The property comprises 12 flats in 38-39 Rutland Gate, London [POSTCODE], a six-storey terrace building, and 2 attached mews houses to the rear, known as 51 and 52 [ADDRESS] [POSTCODE].

4. Neither party requested an inspection and the Tribunal did not consider that one was necessary, nor would it have been proportionate to the issue in dispute.

5. The Respondents hold long leases of varying lengths and start dates, which require the Landlord to provide services and the tenant to contribute towards their costs by way of a variable service charge. The hearing 6. The hearing took place on 26 January 2026. The Applicant was represented at the hearing by [NAME] [COUNSEL] of Counsel. Also in attendance were [NAME] [COUNSEL], of [APPELLANT] (the Applicant Lessor), [NAME] [APPELLANT[NAME], Property Manager, [COMPANY], and [NAME] [APPELLANT] [NAME] for [APPELLANT], the Applicant’s Solicitors.

3 7. Two of the fourteen Respondent [NAME] appeared in person, [NAME] [RESPONDENT] (flat 12) and [NAME] [NAME] [NAME] (flat 8). Preliminary issues 8. In accordance with the Tribunal’s directions of 28 August 2025, the Applicant submitted a joint bundle, which included a copy of their application and relevant notices under section 20 of the 1985 Act, tender documents and reports relating to the condition of and recommended works to the lift, copies of leases and/or HM Land Registry office copy entries, and various correspondence in relation to the matter to be determined. The bundle also included witness statements from [NAME] (flat 6) and [NAME[NAME] (flat 10).

9. Immediately prior to the hearing further documents were submitted, namely a witness statement of [NAME[NAME], Property Manager, [COMPANY], and a witness statement of [NAME] [NAME] of flat 8.

10. The start of the hearing was delayed while the Tribunal considered verbal applications for late submission of the additional witness statements and to establish the sum in dispute. A skeleton argument from the Applicant setting out their case and what they were now asking the Tribunal to determine would have prevented much of the lengthy delay.

11. Under rule 6 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, and on consideration of the Tribunal’s overriding objective (rule 3), the Tribunal accepted both verbal applications and agreed to extension of time to allow late submission of the two witness statements.

12. After some probing and a break to allow counsel to clarify and receive instructions, the sum in dispute was stated to be £244,651 inclusive of VAT. This was said to be based on the following estimated amounts (exclusive of VAT): (i) Lift renovation works ([NAME])

£150,000 (ii) Surveyor fees

£ 2,683 (iii) Electricity supply (£6,000 per supply)

£ 18,000 (iv) Professional fees ([NAME] [NAME]) £ 18,000 (v) Agent’s administration fee (2.5%)

£ 3,750 (vi) Consultant fees

£ 9,400

4 (vii) Principle designer (HSE/CDM Regulations) £ 1,740 Lift works 13. The Applicant identified the relevant issue for determination as being the payability and reasonableness of service charges charged in advance of works to renovate the lift. No submissions disputing payability and reasonableness were made by Respondents, either written or at the hearing. 14. [NAME] [NAME] witness statement helpfully explained that concerns over the safety of the lift were first raised in May 2021 when, following a regular safety inspection, [COMPANY] ([COMPANY]) noted that “this lift does not comply with modern standards and we advise that the key safety aspects of the lift installation be reviewed and a programme of modernisation be adopted in accordance with BS EN 81/80 Rules for the improvement of the safety of existing passenger lifts”. BSE continued to reiterate their concerns at their subsequent regular inspections. 15. [NAME] [NAME] went on to explain that when BSE first raised their concerns in May 2021, the Applicant sought advice from [APPELLANT], who had serviced the lift since 1980. According to [NAME] [NAME] advised that “the lift dated from 1954, and that as a result of its age it has been displaying a number of faults and was in need of renovation”. More recently, in May 2025, [NAME] raised concerns over an intermittent failure to call to the top floor, several intermittent control faults and that the first and second floor are out of service due to a lock failure, which is not repairable. They warned against ‘tinkering’ or work arounds as they would likely cause more issues given the age of the lift and its brake system.

16. The Applicant started consultation under section 20 of the 1985 Act by serving a “Stage 1 Notice of Intention” on the [NAME] in September 2021. As part of this process, the Applicant obtained two estimates to refurbish the lift (£101,628 and £103,150 including VAT) and one to replace it (£127,712 including VAT). This did not include administration charges or other costs, such as design. In July 2022, [NAME] [NAME] ([NAME]) were appointed as lift consultants. [NAME] produced a detailed report raising concerns over the estimate to replace the lift with significant risk of higher costs being incurred. In addition, [NAME] were concerned that the refurbishment estimates were inadequate and underestimated the scale of works needed. This led to a further tender process in late 2022 and receipt of two further estimates; £129,995 and £162,395 excluding VAT, consultant and contract administration fees and new electricity supplies estimated at £6,000 plus VAT per supply.

5 17. Consultation and discussions continued during 2024 and, as the estimates had expired, estimates were again sought in late 2024. Two estimates were received. The first for £180,000 and the second for £239,616. These amounts included VAT and a £20,000 sum for contingencies but did not include surveyors’ fees (estimates at £9,400 plus VAT), professional design fees (£1,740 plus VAT) and administration fees (2.5% plus VAT).

18. The Applicant served a fresh section 20 notice based on estimates received in February 2025 and, as no responses were received, they elected to proceed with the lower estimate of £180,000 including VAT from [NAME].

19. In summing up, the Applicant submitted that the amount of £244,651 inclusive of VAT was reasonable to renovate and bring the lift provision up to modern safety standards. This, they said, was because, following the concerns raised by BSE in May 2021, and confirmed by [NAME], they had taken professional guidance from [NAME] on the works required. Having sought estimates from a number of accredited suppliers based on that advice, they had accepted the lower of the two estimates received. In addition, the process had been lengthy due to the level of challenge from the [NAME] over the extent of the work required, leading to further advice and the need to update estimates. 20. [NAME] had raised objections during the protracted section 20 consultation process, the Applicant explained that this was no longer the case, which was evident as no formal objections to the works or costs of the works had been put before the Tribunal, other than in relation to section 20C costs. 21. [NAME] [NAME] and [NAME] [NAME] confirmed that they did not object to the proposed works to the lift. Witness statements provided by [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME], explained that they had accepted their proportionate share of the costs. [NAME] [NAME] submitted that [NAME] had engaged constructively but had been, perhaps understandably, concerned over whether a full refurbishment or replacement was necessary or whether more limited repairs were feasible. The Tribunal’s decision 22. Having heard evidence and submissions from the parties and considered all of the documents provided, the Tribunal determines that the amount payable in advance in respect of lift renovations of £244,651 inclusive of VAT is a reasonable amount and is payable by the Respondents.

23. The Tribunal was not asked to determine the apportionment of the service charge, which is defined in the individual leases and does not appear to have been disputed.

6 Reasons for the Tribunal’s decision 24. Whilst the Tribunal appreciates the extent of the work needed and the costs to be incurred had previously been disputed by a number of [NAME], no objections to the works or the amount charged in advance have been put to the Tribunal.

25. In addition, the witness statements of [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME] and the oral evidence given by [NAME] [NAME] confirms that they accept the need for the works and that a number of the Respondents have paid the service charge demand in full, or intend to do so.

26. In deciding that the service charge in relation to lift renovation works is reasonable, the Tribunal notes the safety concerns have been consistently raised since May 2021, that the lift dates from 1954 and that the Applicant has sought extensive advice from [NAME] in relation to the design of works, along with a number of estimates from leading suppliers. Application under s.20C and refund of fees The law 27. Section 20C of the 1985 Act provides as follows: “(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 persons specified in the application. … (3) The court or tribunal to which the application is made may make such order as it considers just and equitable in the circumstances.” 28. In essence, the Tribunal must determine whether it is just and equitable in the circumstances to make such an order. This can include the conduct and circumstances of all parties as well as the outcome of the proceedings in which they arise, and consideration of the practical and financial consequences for all of those who will be affected. Submissions 29. [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME] submitted witness statements applying for an order under section 20C of the 1985 Act. At the end of

7 the hearing, [NAME] [NAME] also made a verbal application for an order under section 20C of the 1985 Act. The content of these statements were not disputed by the Applicant. 30. [NAME] [APPELLANT] written submission explains she paid her proportion of the estimated lift renovation costs by bank transfer on 31 December 2024, before the application was made. 31. [NAME] [NAME]’ written submission explains she had purchased flat 10 from [NAME] [NAME] and Mrs [NAME] on 22 July 2024. [NAME] [NAME] and Mrs [NAME] had accepted the proportion share of the lift renovations estimate prior to the sale of the flat, which [NAME] [NAME] also accepted. As a result, [NAME] [NAME] had paid “an apportionment” to the sellers’ solicitors at the point of purchase. 32. [NAME] [NAME] written submission explains he “accepted liability for my proportionate share of the lift refurbishment costs and made payments toward those costs”. The first payment was for £9,000 on 13 December 2024, before the date of the application. The second and final payment was for £6,722.88 on 16 September 2025. 33. [NAME] [NAME] made his application for a section 20C order verbally in the hearing, explaining that he accepted liability and that, in October 2024, he had paid approximately 80% of the sum charged. The residual 20% remained outstanding. [NAME] [NAME] submitted that it was unnecessary for the application to have been made naming all [NAME] when, at the time, some had already paid all or part of the charge.

34. The Applicant submitted that making the application was necessary to advance the matter and because, without action, the funds would not be available to enable the necessary refurbishment of the lift to take place. The Tribunal’s decision 35. Having considered the submissions from the parties and the determination above, the Tribunal determines: (i) In the case of [NAME] [NAME] (flat 6) and [NAME] [NAME] (flat 10), as they had paid their service charge contributions before the application was made, it would not have been necessary for the application to be made against them. Accordingly it is just and equitable an order to be made under section 20C of the 1985 Act, so that the Applicant may not pass any of its costs incurred in connection with the proceedings before the Tribunal through the service charge. (ii) In the case of [NAME] [NAME] (flat 8), given the whole sum was not paid at the time of the application, the Applicant did need to

8 bring the case. However, the full amount was paid before the Applicant was required to make their submissions. Given the delay in [NAME] [NAME] making his full service charge contribution, it is therefore just and equitable in the circumstances for an order to be made under section 20C of the 1985 Act, so that the Applicant may not pass on 50% of its costs incurred in connection with the proceedings before the Tribunal through the service charge. (iii) In the case of [NAME] [NAME] (flat 12), although the greater majority of the sum was paid in advance of the application, the Applicant did need to bring the case because full payment had not been received. It is therefore just and equitable in the circumstances for an order to be made under section 20C of the 1985 Act, so that the Applicant may not pass on 50% of its costs incurred in connection with the proceedings before the Tribunal through the service charge. Name: Mrs [NAME]: 2 April 2026

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. 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.

9 If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).

© CROWN COPYRIGHT Schedule of Respondents [NAME] and [NAME] 1 38-39 Rutland Gate, London, [POSTCODE] [NAME] 2 38-39 Rutland Gate, London, [POSTCODE] [ADDRESS], [POSTCODE] [COMPANY] 4 38-39 Rutland Gate, London, [POSTCODE] [NAME] [NAME] 5 38-39 Rutland Gate, London, [POSTCODE] [NAME] 6 38-39 Rutland Gate, London, [POSTCODE] [COMPANY] 7 38-39 Rutland Gate, London, [POSTCODE] [NAME] 8 38-39 Rutland Gate, London, [POSTCODE] [NAME] 9 38-39 Rutland Gate, London, [POSTCODE] [NAME] 10 38-39 Rutland Gate, London, [POSTCODE] [NAME] 11 38-39 Rutland Gate, London, [POSTCODE] [NAME] and [NAME] 12 38-39 Rutland Gate, London, [POSTCODE] [NAME] and [NAME] [NAME] 51 [ADDRESS] [POSTCODE] [NAME] 52 [ADDRESS] [POSTCODE]