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AllowedFirst-tier Tribunal (Property Chamber)·

First-tier Tribunal Rules Service Charges Reasonable and Payable

Case No.

📌 In brief

The First-tier Tribunal ruled that service charges were reasonable and payable if the costs were reasonably incurred and the works/services were of a reasonable standard. The decision was made under the Landlord and Tenant Act 1985.

⚖️ Legal holding

Service charges are reasonable and payable if the costs are reasonably incurred and the works/services are of a reasonable standard.

Topics

service chargeslease agreements

Provisions

📖 What the law says

Landlord and Tenant Act 1985 s.18

A 'service charge' refers to an amount paid by a tenant as part of or in addition to rent, which covers services, repairs, maintenance, improvements, insurance, or the landlord's management costs. The 'relevant costs' include expenses incurred or to be incurred by the landlord or a superior landlord related to these services.

Landlord and Tenant Act 1985 s.19

Service charges must be reasonable based on the costs incurred. Costs are considered reasonable if they are incurred for services or works of a reasonable standard. If the costs are not yet incurred when the service charge is due, the charge should be reasonable, and adjustments will be made once the actual costs are known.

Plain-English explanation — does not replace advice from a solicitor.

📖 Technical summary

The Tribunal ruled on the reasonableness and payability of service charges and granted dispensation with consultation requirements.

📜 Headnote Official document

The First-tier Tribunal ruled on the reasonableness and payability of service charges and granted dispensation with consultation requirements under the Landlord and Tenant Act 1985. The Tribunal found that the costs were reasonably incurred and the works/services were of a reasonable standard.

📚 Full judgment Official document

OUTCOME: Allowed

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Case Reference

: CAM/42UE/LSC/2023/0073

CAM/42UE/LDC/2024/0624 Property : [ADDRESS], [POSTCODE]

Applicants

: [redacted] : [NAME_1] First Respondent : [redacted] : [NAME_4] Second Respondent : [redacted] : [NAME_4] of Application : (1) Application for the determination of the reasonableness and payability of service charges; (2) Application for dispensation with consultation requirements

Date of applications : (1) 22 December 2023

(2) 23 October 2024 Tribunal Members : Tribunal Judge [NAME_5]

Date and venue of :

Hearing

Date of Decision : 2 June 2025 _______________________________________________ DECISION _______________________________________________

© CROWN COPYRIGHT 2013 10 March 2025, Cambridge Magistrates Court

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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DECISION 1. The leaseholders of flats 2,3,4,6, 9, 10,11,17A, 16,18, 19 and [ADDRESS] are joined by consent to the s.20C and para 5A applications.

2. The Tribunal determines that all the costs challenged by the Applicant at the hearing were reasonably incurred and reasonable in amount, save for the 2024 gutter repairs, the relevant cost of which the Tribunal determines to be £250.

3. The s.20ZA Application is allowed but dispensation is granted on condition that the relevant costs are capped at £19,632.

4. The Tribunal grants a s.20C and a paragraph 5A CLARA order in favour of the Applicant and the other leaseholders identified in paragraph 1 above.

5. The Respondents shall reimburse the Applicant the application fee and hearing fee for the s.27A application in the sum of £330, within 28 days.

Introduction 1. The Tribunal is asked to determine the payability and reasonableness of relevant costs incurred by way of service charges pursuant to an Application made under s.27A of the Landlord and Tenant Act 1985.

2. Further the Tribunal is asked to consider dispensation in relation to consultation requirements, by application dated 23 October 2024. Relevant law 3. The relevant statutory provisions are set out in Appendix 1 to this decision. Parties 4. The Applicant is the leaseholder of the Property.

5. The First Respondent and Second Respondent are the freeholder and landlord. 6. [ADDRESS] consists of 1 block of 2 flats (#1 & 2) and 1 block of 18 flats (#3- 20). The Applications 7. The s.27A application was filed on 22 December 2023. The Tribunal was first able to give directions on 26 September 2024 in standard format.

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8. Provision was provided for other leaseholders to join the proceedings by 11 October 2024.

9. On 23 October 2024 the Respondents filed a s.20ZA application for dispensation with consultation requirements. Directions were given on that application on 17 December 2024.

10. The parties complied with directions, but on 25 January 2025 the Respondents sought an adjournment of the hearing, which the Tribunal Procedural Judge refused on 29 January 2025. The Lease 11. The Lease is for a term of 99 years from 25 March 1988, under which the management company has the obligation to provide services.

12. Clause 4 requires the landlord to insure the “Property” (meaning all that property formerly part of [ADDRESS] Market Suffolk shown edged with a thick black line on the plan.)

13. By paragraphs 1 and 9 of Part 1 of Schedule 3, the Applicant has to pay a service charge, being a fair proportion of the annual aggregate expenditure of those elements of the service charge made under Part 2 of Schedule 3.

14. The fair proportion is calculated using floor areas: see definition on page 2 of the Lease. We were informed that the leaseholders pay 1/20.

15. Schedule 3 Part 2 lists the heads of expenditure of which the leaseholder is to pay the fair proportion of the total. This includes:

“9. Without prejudice to the generality of this Schedule the leaseholders shall pay on demand to the company or its duly appointed agent an amount not exceeding 15% of the annual aggregate due to the company by the leaseholder under Parts II and III of this schedule.”

“11. The salary of the Warden and his or her expenses duly incurr[ed] directly or indirectly for the proper performance of his or her duties.”

The hearing 16. This was conducted in person. The Applicant was represented by [NAME_1]. 17. [NAME_4] represented the Respondents. 18. The Tribunal had a full bundle of over 490 pages and a supplemental bundle of 188 pages. 19. The leaseholders of flats 2,3,4,6, 9, 10,11,17A, 16,18, 19 and [ADDRESS] were joined by consent of the Applicant and Respondents to the s.20C and para 5A applications.

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20. The parties then made their representations item by item in accordance with the Scott Schedule, followed by submissions on s.20ZA and s.20C/para 5A. Discussion and Determination: s.27A Application 21. Taking the Scott Schedule items in turn: 2019: 15% management fee charged on health care homes staff wages up to £7812 (£1171.80).

22. The Applicant’s position was that he should pay nothing in respect to this item, on the grounds that warden duties are not part of the Lease. He accepted that warden duties are in fact provided, in accordance with the 6th Schedule of the Lease; however, the case was twofold:

(a) The 6th Schedule to the Lease is subtitled “Summary of the Warden’s Duties (This Schedule does not form part of this Lease)”;

(b) There is no “warden”, i.e. no specified person (singular) which the lease requires. The lease does not cover scheme based staff. The Respondents had explained in a letter dated 9 June 2023 that the Warden is not one specific person, but a Warden Service that is carried out by a number of staff.

23. The Respondents contend that this charge is for “employment of an onsite staff” as the accounts say (i.e. a warden service), which is rechargeable under paragraph 11 of Part 2 of Schedule 3 of the lease; that the figure has not changed since 2012, and pursuant to paragraph 9 of Part 1 of Schedule 3, 15% is contractually payable. This has been explained in correspondence to the Applicant, for example on 9 October 2024.

24. The Tribunal prefers the Respondent’s submissions. We note that the definition of “the Warden” is “the person appointed by the company to carry out the duties outlined for information only in the 6th schedule”, and that by clause 2.3 “words importing one gender include the other gender and words importing the singular includes the plural and vice versa”.

Accordingly, the Respondents may employ more than one warden of any gender, to carry out the duties in Schedule 6. The Applicant’s contention that there should be 1 specific person and not a warden service is a distinction without a difference.

25. Moreover, in the Tribunal’s determination the 6th Schedule is subtitled in terms that it “does not form part of this Lease” only so that the Management Company is not obliged to provide each and every duty therein; it remains an entitlement of the Respondents to charge for the Warden’s salary and expenses, under Schedule 3, Part 2, paragraph 11, whatever the duties (subject to s.19 considerations).

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26. In the circumstances, the Tribunal considers the relevant cost to have been reasonably incurred and payable. There is no challenge to the amount. 2020: 15% management fee charged on health care homes staff wages up to £7812 (£1171.80). 27. The parties repeat their submissions as under 2019.

28. The Tribunal repeats its findings as for 2019. The relevant cost was reasonably incurred. There is no challenge to the amount. 2020: Insurance Excess at £5000 (£959)

29. The Applicant's contention was that this cost was not reasonably incurred, because the excess was too high. By setting an excess so high, repairs to underground pipes and other matters which were below that sum could not be pursued through the policy of insurance on the building. The Applicant offered £644 as an appropriate sum, being a 1/3 discount, because he never had the chance to claim on the insurance.

30. The Respondents rely on the landlord's insurance obligations, per clause 4 of the lease, which they say have been complied with at all times in full; that the landlord reviews and determines the level of insurance excess (also known as self insurance) at each annual review, taking into account a number of factors, including but not limited to the effect that different excess levels have on the premiums being indicated- the lower the excess, the higher the premium, as risk is transferred to the insurers. This was a rational decision, [NAME_4] submitted.

31. We note that in Waaler v Hounslow LBC [2017] EWCA Civ 45,the Court of Appeal held that whether costs were reasonably incurred within the meaning of section 19(1)(a) of the Landlord and Tenant Act 1985 was to be determined by reference to an objective standard of reasonableness, not by the lower standard of rationality; and the cost of the relevant works to be borne by the lessees was part of the context for deciding whether they had been so reasonably incurred; that the focus of the inquiry was not simply a question of the landlord’s decision-making process but was also one of outcome; that, where a landlord had chosen a course of action which led to a reasonable outcome, the costs of pursuing that course of action would have been reasonably incurred even if there were a cheaper outcome which was also reasonable.

32. Weighing the above, the Tribunal prefers the Respondents’ submissions. We accept that there may be a trade-off between cost of premiums and the level of excess applied to some claims: see the RICS Residential Service Charge Code at paragraph 12.8. Whilst having a lower excess may have led to the ability to pursue certain repair costs in this year through the Respondents’ insurance, the Applicant has lost sight of the fact that such claims on the insurance would have been likely to have led to an increased premium in later years. There is

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therefore an element of “swings and roundabouts”. The outcome for the Applicants must be viewed in that context.

33. For these reasons, we are not prepared to find that the Respondents have failed to take a course of action which led to a reasonable outcome, even though a decision to have opted for a lower excess may also have been reasonable.

34. We therefore determine the cost of £959 was reasonably incurred and reasonable in amount. 2021: 15% management fee charged on health care homes staff wages up to £7812 (£1171.80). 35. The parties repeat their submissions as under 2019.

36. The Tribunal repeats its findings as for 2019. The relevant cost was reasonably incurred. There is no challenge to the amount. 2022: 15% management fee charged on health care homes staff wages up to £7812 (£1171.80). 37. The parties repeat their submissions as under 2019.

38. The Tribunal repeats its findings as for 2019. The relevant cost was reasonably incurred. There is no challenge to the amount. 2023: 15% management fee charged on health care homes staff wages up to £7812 (£1171.80). 39. The parties repeat their submissions as under 2019.

40. The Tribunal repeats its findings as for 2019. The relevant cost was reasonably incurred. There is no challenge to the amount. 2023: Insurance Excess at £5000 (£959) 41. The parties repeat their submissions as under 2020.

42. The Tribunal repeats its findings for 2020. The relevant cost was reasonably incurred and reasonable in amount. 2023: 5 yearly periodic window redecorating of [ADDRESS] (£26,814). 43. The salient facts before the Tribunal were:

44. In 2016, a quotation was obtained for 2017 external record redecoration to flats at [ADDRESS]. This included all previously painted surfaces, at a cost of £9740 plus VAT.

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45. On 1 March 2023 the Respondents obtained a quotation from a firm called [NAME_6] for the redecoration of the windows to the [ADDRESS] flats, in the sum of £19,205.16 including VAT.

46. On a date unknown, the Respondents obtained another quotation, from [COMPANY_7].

47. On 23 March 2023 the Respondents wrote to leaseholders, indicating that maintenance to all windows of the flats was scheduled to begin on 17 April 2023, weather permitting; that works would be: repairing, filling and sanding of frames prior to painting; priming and glossing; replacement of 6 damaged sealed double glazed units; a scaffold tower on site to access the 1st and 2nd floor windows; and there would be 3 or 4 decorators. The work should take about 3 weeks to complete, depending on weather. The quoted cost for the work was £19,632 including VAT.

48. The redecoration work did commence on 17 April 2023 and took 2-3 weeks to complete.

49. The works resulted in 2 invoices from the chosen contractor, [COMPANY_7], each of £13,407, one dated 21 April 2023 and another on 9 May 2023.

50. There was a AGM for leaseholders on 24 May 2023. Complaints were made by leaseholders of the poor quality of redecoration. The Respondents did not inform the leaseholders of the increased cost from £19,632 to over £26,800.

51. On 22 June 2023 [NAME_1] complained to the Respondents about the works carried out. The Respondents contended that 2 quotations for the works had been obtained, with [NAME_7] (the appointed contractors) being the cheapest.

52. On 31 October 2023 [NAME_8] provided a quotation for the Applicant for external redecoration to windows of 20 flats, following a visit on 24 October 2023, at a total of £6690 (no VAT).

53. On 5 November 2023 [NAME_9] provided a quotation for the Applicant, for external redecoration to windows of 20 flats, 115 windows, at a total of £11,160 (including VAT). Materials quoted are Dulux Weathershield 123 system throughout, with sundries, fillers, sandpaper etc included.

54. Against this factual backcloth, the Applicant’s representations were as follows:

(1) The quotations for 2017 included all exterior services, but the 2023 quotations were for the external faces of exterior windows only;

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(2) The Applicant’s 2023 quotations were comparable; [NAME_8] were based only 5 minutes away; the [NAME_9] quotation stated 115 windows because the contractor had merged some of the smaller windows together. This contractor had visited the site on 3 or 4 November 2023. A [COMPANY_10] (where the Applicant had another flat) had used them, and to that extent they were reliable;

(3) As for the window replacements, the Applicant relied on emails from [COMPANY_11] (giving a quotation of £795 including VAT) and [NAME_11] (at £860 including VAT).

(4) The Applicant should only have to pay her due proportion of a sum which was calculated to be £7680 (albeit we note that figure cannot be reached by addition of any combination of the above sums).

55. The Respondents contended that the actual cost of £26,814 had been reasonably incurred and was reasonable in amount. The [NAME_6] quotation at £19,205.16 was much more in line with the eventual invoices of [NAME_7], when one considers that the [NAME_6] quotation was based on just 52 windows (i.e. flats 3 to 20). It did not include flats 1 and 2, which accounted for the extra £7132 spent.

56. [NAME_7]’s invoice dated 21 April 2023 states that its original estimate (numbered B438, which was not before us) was for 52 windows only, and similarly did not include the windows in flats 1 and 2. These now added £5985 (£2992.50 x 2) to its original estimate, because there were another 15 windows to decorate (containing 30 panes).

57. The Tribunal does not consider the 2017 quotation to be comparable, being pre-pandemic, since when prices for works and materials have increased dramatically. We discount the quotation at £6690 as being far too low, when compared with the other estimates and actual cost. However the [NAME_9] quotation has some real evidential value, and was not the subject of any criticism by the Respondents.

58. It is trite law the landlord’s costs do not have to be the cheapest: the question for the Tribunal is “not whether the expenditure for any particular service charge item was necessarily the cheapest available, but whether the charge that was made was reasonably incurred”: Forcelux v Sweetman [2001] 2 EGLR 173 at para 39.

59. The parties had difficulty informing the Tribunal unequivocally how many windows there were in each of blocks 1 and 2, and there were no details of specifications of works, nor how many were in fact repaired, as opposed to being replaced. Given the [NAME_6] quotation, however, the Tribunal is not persuaded that the actual figure spent of £26,814 was unreasonable, especially

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if works had been to a reasonable standard. However, this determination is subject to the issue of breach of consultation/dispensation, considered below. 2024: Gutter repair (£582) 60. Although this was on the Scott Schedule for 2023, the Applicant accepted it came within the following service charge year.

61. The Applicant showed us photographs in the bundle of the guttering, which showed the guttering had been readjusted at an angle. The Scott Schedule entry states an 8 inch horizontal tray had been cut out, and the top part of the downpipe turned 45 degrees.

62. We were taken to the invoice from [COMPANY_7], which refers only to repairs to the gutters, with no further details. No materials appear to have been used.

63. The Applicant’s case was this was a guttering readjustment only. The Applicant had obtained comparable quotations of his own, in the sum of £150 from [COMPANY_13].

64. The Respondents could not explain what the initial issue had been with the guttering, i.e. whether it was a leak or not. They could not explain why the guttering had been readjusted at an angle. They could not say how long the operatives had been on site.

65. The Tribunal would expect work at height of this nature to require 2 operatives. We therefore consider the Applicant’s comparable to be too low. We determine a reasonable sum, mindful that it was labour only on this job, to be £250. 2024: 15% management fee charged on health care homes staff wages up to £7812 (£1171.80). 66. The parties repeat their submissions as under 2019.

67. The Tribunal repeats its findings as for 2019. The relevant cost was reasonably incurred. There is no challenge to the amount. 2024: Flat 1 and 2 felt roof repairs 68. The Applicant accepted a cost was reasonably incurred, but not £5724. He contends that £1375 would be appropriate, based on 2 estimates he had obtained:

(1) [COMPANY_12], in the sum of £380 “to supply and fit tarp over flat roof porch”; (2) [COMPANY_12], in the total sum of £995 to “remove old felt, install 2 layers underlay, 1 layer capsheet to porch, grind

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out and install lead flashing, remove all waste” (materials £270 included in the sum);

69. The roof repair was to the flat roof of the front door porch to flats 1 and 2. He contends this is 8 square meters, and the photographs in the bundle are commensurate with that.

70. There are 2 invoices in the bundle, from [COMPANY_7]. The first is dated 8 January 2024, in the sum of £864 inc VAT. The description of works is “…emergency sheeting of the flat roof to stop water ingress. Works were carried out successfully by the team before they left the site clean/tidy and removed all waste generated by works.”

71. The second is 31 January 2024, in the sum of £4860 inc VAT. The description of works is a detailed explanation of works to renew the flat roof, as follows:

“-to remove all flat roof membrane from the flat roof area exposing it to boards -to check all exposed roofing boards, replacing any damaged boards where necessary using 18 millimetre OSB board -to torch on one layer of torch on Technatorch roofing felt to roofing boards -to torch on one layer of torch on Technatorch roofing felt on top of the tack down roofing felt - to torch on one layer of torch on Technatorch charcoal mineral felt to provide roofing surface and complete the three layer flat roofing solution -to supply and install new lead flashing to seal the new flat roof chased into the abutting walls -to check the falls and levels of the roof, and to ensure that all downpipes and gutters are clear and allowing effective water runoff -to leave site clean/tidy and to remove all waste generated by works.”

72. The Tribunal considers the costs recharged by the Respondents to have been reasonably incurred and reasonable in amount. It is trite law the landlord’s costs do not have to be the cheapest: the question for the Tribunal is “not whether the expenditure for any particular service charge item was necessarily the cheapest available, but whether the charge that was made was reasonably incurred”: Forcelux v Sweetman [2001] 2 EGLR 173 at para 39. In this regard, we cannot consider the temporary repair cost to be excessive.

73. As for the main roof replacement, we do not consider the Applicant’s estimate to be comparable to the detail of [NAME_7]’s invoice. In the Tribunal’s experience, [NAME_12]’s estimate is too low. Indeed, the Applicant, during the hearing, appeared to accept the [NAME_12] quote was too low, and that a sum in the region of £3000 would instead be reasonable. That concession, however, is not sufficient to persuade us that the actual cost incurred was not reasonable in amount. It might be at the upper end of a range which the Tribunal would expect, but that is enough.

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74. The total expenditure of £5742 was therefore reasonably incurred and reasonable in amount.

Discussion and Determination: s.20ZA Application 75. The Tribunal has the jurisdiction to grant dispensation under section 20ZA of the 1985 Act “if satisfied that it is reasonable to dispense with the requirements”. The Tribunal has also had regard to the leading case of Daejan Investments Ltd v Benson [2013] UKSC 14, which confirmed that when considering an Application under section 20ZA, the Tribunal should focus on the extent, if any, to which the leaseholders are prejudiced by the failure to comply with the consultation requirements, in either paying for inappropriate works or paying more than would be appropriate as a result of the failure by the landlord to comply with the regulations.

76. [NAME_4] argued that the key question is whether the Applicant had been prejudiced for paying for inappropriate works or paying more for works. If there is no prejudice, ordinarily the Tribunal will grant unconditional dispensation; moreover the factual burden is on the tenant in relation to prejudice: see [NAME_14] v [NAME_14].

77. Management Accountant [NAME_15]’s statement states that the Respondents used [COMPANY_7] frequently because they had a 10/10 rating on Checkatrade; that [NAME_17] of the Respondents has a good relationship with the company, and they are trusty and reliable. The company will return and fix any substandard works or omissions of theirs, without delay and free of charge.

78. The Respondents, in the above witness statement, accept that they did not follow the section 20 consultation procedure regarding the repair and repainting of the windows. However all leaseholders were sent the letter dated 23 March 2023, and there was no concern raised by any leaseholder until the Applicant’s letter of 22 June 2023. The sinking fund was used to pay for the works, and the final cost did not exceed the amount in the reserve fund account, which is held separately.

79. The Applicant emphasised that the increase in costs had been concealed, and there had been substantial failure to comply. The works had not initially been to a reasonable standard.

80. Taking all the above into consideration, we consider there has indeed been some prejudice to the Applicant in denying her and the other leaseholders the opportunity to put forward a credible alternative lower quotation, thereby creating a real risk of paying more than appropriate. We repeat our finding that the [NAME_9] quotation had some real evidential value, and was not the subject of any criticism by the Respondents. We also take into consideration that the standard of works was criticised by a number of leaseholders.

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81. We are satisfied that it is reasonable to dispense with consultation, but on condition the relevant costs are capped at £19,632 inc VAT, being the original sum stated in the Respondents’ March 2023 letter.

Discussion and Determination: Section 20C/paragraph 5A 82. The UT has held that the only principle is to have regard to what is just and equitable, including the conduct and circumstances of the parties, as well as the outcome of the proceedings. The purpose of s20C is to give an opportunity to ensure fair treatment as between landlord and tenant, in circumstances where although costs have been recently incurred by the landlord, it would be unjust that the tenant should have to pay them: Tenants of [ADDRESS] v [COMPANY_23] (LRX/37/2000) per HHJ Rich.

83. Judge Rich QC further remarked in [NAME_18] v [COMPANY_19], LRX/26/2005:

"so far as an unsuccessful tenant is concerned, it requires some unusual circumstances to justify an order under s20C in his favour".

84. At the conclusion of the hearing, the parties made submissions. The Respondents contended the Applicant had misunderstood the contractual requirements in the lease, and that was the catalyst for the s.27A application.

85. The Tribunal makes an order in favour of the Applicant and other joined leaseholders, as a matter of exercise of judgment, given our findings on the s.20ZA application, plus the conduct of the Respondents in concealing the price increase for the window repairs from the leaseholders. Respondents’ counsel conceded the Applicant and the other leaseholders had not been told about the cost increases, and that she had no instructions as to the particular reasons why. There also was an absence of certified accounts. Management of the block left much to be desired. These combined circumstances are unusual enough for this Tribunal to find that it is just and equitable to make a s.20C order in favour of the Applicant, notwithstanding that the s.27A application has generally been unsuccessful.

Conclusions 86. For the reasons already given under the s.20C application, in our discretion we also make an order for reimbursement of the Application and hearing fees for the s.27A application.

87. We do not make an order that the Applicant pay the Respondent’s application fee for the s.20ZA application (if any), for similar reasons.

Judge:

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S J Evans Date: 2/6/25

ANNEX – RIGHTS OF APPEAL 1. 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 at the Regional Office which has been dealing with the case.

2. 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.

3. If the Application is not made within the 28-day time limit, such Application must include a request to 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.

4. 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.

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Appendix 1 Landlord and Tenant Act 1985 Section 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 (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 provisions 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 27A (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.

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(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 would be payable, (b) the person to whom it would be payable, (c) the amount which would be payable, (d) the date at or by which it would be payable, and (e) the manner in which it would be payable. (4) No Application 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. (5) But the tenant is not to be taken to have agreed or admitted any matter by reason only of having made any payment.

📊 How courts decide similar cases

Among 10 similar decisions in this collection:

A snapshot of this collection — not a prediction of your case's outcome.

⚖️ What tends to weigh in cases like this

✅ Tends to be accepted

  • Service charges are reasonable and payable if the costs are reasonably incurred.
  • Service charges are reasonable and payable if the works/services are of a reasonable standard.
  • Leaseholders are entitled to know the salaries of staff for whom they are financing.
  • A landlord is entitled to dispensation from consultation requirements where urgent repairs are necessary.

❌ Tends to be rejected

  • Service charges are reasonable and payable if they are incurred reasonably and are of a reasonable standard.

Patterns observed in similar cases in this collection — every case is unique.

❓ Frequently asked questions

What did this decision decide?

The decision ruled that service charges were reasonable and payable if the costs were reasonably incurred and the works/services were of a reasonable standard.

Who was involved?

The case involved tenants and landlords, specifically regarding service charges.

How did the court decide, and why?

The court decided that the costs were reasonably incurred and the works/services were of a reasonable standard, thus the service charges were reasonable and payable.

Which laws or rules were applied?

The Landlord and Tenant Act 1985 sections 18, 19, and 27A were applied.

What was the argument that mattered most?

The argument that mattered most was that the costs were reasonably incurred and the works/services were of a reasonable standard.

Was the decision for or against the person who brought the case?

The decision was for the person who brought the case.

What does this mean for someone in a similar situation?

Someone in a similar situation should ensure that the costs of service charges are reasonably incurred and the works/services are of a reasonable standard.

What evidence or documents mattered?

Evidence and documents related to the costs and standards of service charges mattered.

Can a decision like this be appealed?

Yes, decisions like this can be appealed to a higher court.

Is it worth getting a solicitor for a case like this?

It is always recommended to seek advice from a qualified solicitor for cases involving service charges.

Official source: First-tier Tribunal (Property Chamber) headnote and full judgment reproduced from the court's public records. View on the official source ↗Summary, holding, technical summary and questions: produced by Artificial Intelligence based on the official headnote and judgment. These are VadeLab’s own material and are not the work of the Court.This decision was issued by the First-tier Tribunal (Property Chamber) and is reproduced from its published records. VadeLab is not affiliated with, and this page is not endorsed by, that court or tribunal.