First-tier Tribunal Rules Service Charges Reasonable and Payable

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/ooAW/LSC/2022/0355 Property :

[ADDRESS] [POSTCODE]

Applicant: [redacted] : [NAME] Respondents :

[redacted] :

None

Determination. : By transfer order from the County Court for determination of the reasonableness of and the liability to pay a service charge S.19 & S.27A Tribunal members : Mr [NAME]. [NAME] Mr [NAME]. [NAME] Mr [NAME]. [NAME] of Hearing and venue :

3 [ADDRESS] [POSTCODE]

Date of decision :

13 April 2023

DECISION

2 Decision

1. The Tribunal determines that all sums claimed, whether disputed or not by the [NAME], for service charges in respect of services, provided under the Respondents leasehold interest, by the Applicant landlord, for the years 2015/16, 2016/17 2017/18 and 2018/19 at the Property, are reasonable and payable.

2. This determination is passed back to the County Court to conclude remaining matters under the CPR, in respect of claim H25YX999, reserved to itself.

Background

(1) The Claimant/ Applicant issued proceedings in the [ADDRESS] on 1 March 2021 No. H25YX999. Defence was filed on 27 June 2022. On 10 November 2022 the County Court at Central London by DDJ Zang, amongst other matters, issued their decision reached on 10 October 2022, to transfer an aspect of the claim to the First-tier Tribunal London, namely the “determination of the payability and reasonableness of the service charges claim.” Meantime “The claim is stayed in the County Court pending the decision of the First Tier Tribunal.” (2) On publication of the decision on the aspects referred, the Tribunal returns this case to the County Court. The case being a referral the Tribunal by the County Court, the Tribunal had no [NAME] form and very little information to process the case prior to issue of Directions. Directions (3) Directions were issued by Deputy Regional Judge Martynski on 16 December 2022. The hearing was set for 1 day starting at 10am on 3 April 2023, person. (4) The Respondent ([NAME]) was to present no later than 20 January 2023 their Statement of Case (which may be in the form of orr have attached a Schedule) setting out all items disputed with the reasons whey they are disputed and, where applicable any alternative sums offered by the Respondent. The schedule was to have 4 columns headed: Item amount Respondent’s objections,

Applicant’s comments. (5) If the Respondent wishes to rely on any document not already seen by the Applicant, copies of any such documents must be delivered (by email) to the Applicant at the same time.

3 (6) The Applicant (Landlord) must by 17 February 2023 deliver (by email) to the Respondent and to the Tribunal a Statement of Case in response if appropriate using the schedule adopted by the Respondent. Again, if the Applicant wishes to rely on any documents not already seen by the Respondent, copies of any such documents must be delivered (by email) to the Respondent at the same time. (7) If either party requires sight of any other documents, that party should request copies of the documents from the other party and copies should be provided within 7 days of request. (8) If a party intends to rely on a witness at the final hearing (this includes the parties themselves), then a summary of the evidence to be given by that party/witness must be set out in a Witness Statement and delivered (by email) to the other party no later than 10 March 2023. (9) If a party intends to rely on the evidence of an expert that issue should be raised with the other party and agreements made as to the disclosure of that expert’s report. Permission from a Judge will be needed before any party can rely upon expert evidence. (10) It was for the Applicant (Landlord) to prepare a digital, indexed and paginated hearing bundle in PdF format to the Tribunal by 24 March 2023. The bundle would need to contain all County Court pleadings and orders, the Directions, Statements of Case and Schedule, witness statements, relevant invoices, relevant accounts, the lease, and other documents which either party wishes to rely on. (11) The Directions conclude with the warning to parties: If the Applicant fails to comply with these directions, the Tribunal/court may strik out all or part of their case pursuant to rules 9(3)(a) of the Tribunal Procedure Rules 2013. And if the Respondent fails to comply wit these directions the Tribunal/ court may bar them from taking any further part in all or part of these proceedings and may determine all issues against it pursuant to rules 9(7) and (8) Tribunal Procedure Rules 2013. (12) The Applicant produced a 545 page electronic bundle which largely complied with the requirements of the Directions and incorporated both sides representations. The Applicant’s Evidence contained the Witness Statement of [APPELLANT] of 17 March 2023 from p.247 to p.493, incorporating a host of supporting documents. The Respondent’s Evidence was said to be at p.495 to p.545 of the bundle and contained the Witness Statement of [NAME] of Bishopsgate Law of 27 June 2022 and a much smaller range of supporting documents.

4 Hearing - Applicant’s Representations (13) The Applicant, through Mr [COUNSEL] of Counsel, appointed by [NAME], provided further particulars of claim. It admitted that it had claimed in error that it was the freeholder of the Property, but rather was a long [NAME] of the [NAME] and that the Royal Borough of Kensington and Chelsea was in fact the freeholder. This confirmed it was not otherwise material to the claim. (14) Although the Applicant was required to include the extensive documentation produced for and at County Court preceding this referral to the Tribunal these were not material to the determination of the question passed to the Tribunal by the Court. (15) The Property is (from the lease plan) a modern purpose built two bedroom flat with kitchen/ living room, bathroom/ wc and small private balcony, in a purpose built [NAME] of similar flats constructed within the last 10 years. It is understood that the [NAME] and to some extent the [NAME] are sublet on a mix of tenures – Assured, Shared Leasehold Ownership and Private Leasehold ownership the latter as in the case of this Property. It is understood that the Property is sublet by the Respondent on an Assured Shorthold Tenancy in accord with the provisions in the long leasehold. (16) The Respondent had taken a lease of the Property for a long term commencing 19 May 2015. The lease contained the conventional service charge arrangements defined at Para 1.21 of the lease. It listed a number of services provided to the Property at both [NAME] and at [NAME] level ine the lease schedule with corresponding percentages of total expenditure in each regard back to the [NAME] of the Property each year. The Service Charge runs from 1 April each year for the following 12 months. (17) The Statement of Case confirmed that the Respondent had first stopped paying Service Charge due on time since the beginning of the lease. However by “…09 February 2021, the Defendant had arrears of 3,802.49.” Although the Applicant sought contractual interest of some £945.60 this is not a matter for the Tribunal and will be for the Court to assess on return of this case, as with any alleged rent arrears. (18) On 16 September 2016 the Claimant sought the actual service charges due for 1 April 2015 – 31 March 2016 with an annual service charge statement at Appendix 3 of the bundle. The statement included the Summary of Tenant’s Rights and Obligations. (19) This shortfall and chase up correspondence was repeated by the Applicant with the Respondent for each of the following years 2016- 2017, 2017-2018. Three years actual service charges unpaid, in all. On

5 6 December 2018 the Applicant sent a final reminder to the Respondent requiring payment in 7 days to avoid legal action. (20) On 7 December 2018 the Respondent contacted the Applicant and was reported as saying that she had been miss-sold the flat by the selling agent. She would not have bought it if she had known that she was sharing the [NAME] with social housing tenants. She wanted to pay the same service charges as the social housing tenants. It was unclear what provision of the lease she claimed this entitlement or what level of service charge if any, the [NAME] were paying in any case and thus what she was prepared to pay. The Applicant advised that the data was private to the [NAME] and could not be disclosed. (21) On 25 February 2019 the Respondent called the Claimant to pay a service charge bill of £2,209.76. Later on 30 September 2019 the actual service charges due for the year April 2018 - March 2019 were sent to the Respondent. On 22 October 2019 the Claimant had a call from the Respondent disputing the service charges and refused to pay until she was sure she was paying the same as other leaseholders in the [NAME] that had the same sized property. On 20 July 2020 the Respondent called and offered £75pcm for arrears from 2017 a total sum of £2,295 (39 payments) was to be offered which she later that day updated to payment of all in a lump sum. Receipt of this was confirmed back to the Respondent by email, on 21 July 2020. (22) On 6 August 2020 the Applicant called the Respondent asking her to continue her monthly service charge payments. The Respondent now refused to make any further payments for service charges maintaining “…she said they had been unfair. The Defendant claims that she is not receiving any service and she has a list of the issues affecting the [NAME]. The Claimant asked her to email a list of outstanding issues for them, but the Defendant said hat she is too busy to email. The Defendant threatened to go to the media if the Claimant takes her court.” (23) On 2 September 2020 the Respondent was advised that service charge account arrears were now £2,877.24 and that payment be made urgently. Later that day the Respondent emailed. “There is no service so there is no charge.” On 20 October 2020 the Applicant attempted to call the Respondent to take payment but received no response. (24) On 28 October 2020 on an unrelated matter the Applicant called the Respondent for payment for an additional key fob to the [NAME] outer door. The Applicant agreed to pay for this but by BACS transfer. It was unclear if payment was received for the fob, but on 9 November 2020 the Applicant called the Respondent to advise of the latest balance but as the Applicant had not yet received the fob she would not pay. On 28 November 2020 the Applicant’s calls to the Respondent by mobile and landlines were not answered.

6 (25) On 10 December 2020 the Applicant sought payment for the fob by card. The Respondent declined to provide details for reportedly, “fear of fraud”. On 17 December 2020 on being called the Respondent said she was “busy” and for them to call tomorrow 18 December 2020, when on being called she asked for the call later. When this was done, she asked for the call on the following Monday. On 20 December 2020 a person other than the [NAME] answered the call and payment for the fob was not made either. (26) On 21 December 2020 no payment was made by the Respondent on because her “card was cloned.” She also confirmed that “she is not going to clear the balance and is happy for the Claimant to take her to court.” The Respondent was busy that day too. On 22 December 2020 the Respondent called the Applicant and confirmed she would set up a monthly payment of £75 pcm “and feels that this is what she needs to pay as the Claimant doesn’t deserve any further amount.” She added that; “ …her service charge is too high and the Property was sold to her on false information and not been allowed to view until the payment has been made.” And “…she is paying higher service charge s than the shared owners on the [NAME].” (27) The Applicant confirmed to her that here service charge is calculated as a percentage on her lease and if she is not hapy with the charges she can apply to the First Tier Tribunal. “”The Defendant stated she will be doing that and if the Claimant takes her to court for the outstanding, she knows that the case will be thrown out again.” (28) The Applicant confirmed that they were seeking the sum of £3802.49 in respect of outstanding service charges. The Tribunal noted that the remaining issues of interest - contractual and/or Court based and costs would be dealt with by the Court. (29) In the Appendices the Applicant provided a long schedule of service charges due from 1 August 2015 and payments mainly lump sums received over the following months and years. As at 1 February 2021 the remaining sum due was £3,802.49. Although service charge arrears were said to have accrued since, these were not part the claim or of this referral to the Tribunal. No determination of these more recent sums, forms part of this decision therefore. (30) The Applicants bundle provided copies of each of the years service charges from 2015 to 2016 onwards. For this account there was series of [NAME] and [NAME] service headings, listing the service (20 in all), the estimated, the actual and the variation between at year end. Generally the ‘actuals’ were notably below the ‘estimated’ sums due from the Respondent. Not every heading incurred a service or charge for this particular year. The annual invoice showed the [NAME] costs apportioned at 0.886% and the [NAME] costs at 4.695% of their respective total. The Applicant also provided the Respondent with the

7 total “actual” and “estimated” costs for [NAME] and [NAME] so that the Respondent could calculate each item of charge for herself. Included with the invoice was a summary of the Tenants Rights and Obligations, [NAME] the invoice into a valid demand for payment. Lastly the invoice included an explanation of each item of claim on the charges running to just over 2No. sides of A4 in total. (31) In a series of Appendices the Applicant provided near identical detailed breakdowns of each financial years service charges for the following three years 2016-17, 2o17-2918, 2018-19, four years in all. Although as the service charge account showed some payments had been made, it was in the form largely of occasional lump sums and few if any regular monthly payments. The Applicant provide a series of file notes recording the key features of each telephone call between Applicant and Respondent leading from November 2018 up to 22 December 2020 extracts of which were referred to in the Statement of Case. (32) The Applicant presented the Witness Statement dated 17 March 2023 of [APPELLANT] [NAME], Leasehold Collection Officer of [APPELLANT[COMPANY]. On questioning from the Tribunal he corrected his mis-statement regarding the identity of the freeholder. He gave evidence “in support of the Applicant’s case that the Service Charge Demands (were) both reasonable and payable.” (33) This witness went through the basic terms of the lease to the Respondent including those of the services and service charges and the tenants covenants to make payment when, to whom and of how much. He recounted the material set out in the Statement of Case and took the Tribunal to some of the file notes made at the tiime on the conversations between the [NAME] and earlier holders of his current post a Ms [NAME] and then a Ms [NAME]. He also referred to the regular billing, explanatory letters and the later standard reminder letters for payments sent to the Respondent. His recount of the issue for receipt of and payment for the door lock fob was put to one side as it related to a non-service charge item. (34) There appeared to the Tribunal despite the time spent and correspondence to the Respondent very little had been achieved by the Applicant over the years. The witness referred to the preparation for and [NAME] of the claim at the County Court. The witness was reminded by the Tribunal that the issues before and at the County Court were not a matter for the Tribunal now as we were only tasked in determining the reasonable and payable service charges for the 4 accounting years in question. (35) Although the Applicant’s witness referred to arrears of service charge at £6,523.56 as at 1 March 2023 he as reminded that we would not be dealing with sums due after 31 March 2019 and that these would need

8 to form the basis of a later claim if required by the Appellant. To assist the Tribunal he included a sample year of sums due in his statement for 2018/19. It set out the percentages applied to each item and the final actual sums due. There were 14 items for this year. The contributions sought for this Respondent ranged from £1162.44 for the sinking fund down to £4.94 for the entry phone. (36) The Respondent had indicated in her pre-hearing schedule of service items and sums of concern to her for this year 2018/19 were: [NAME] and [NAME] cleaning; Lift Servicing and Repairs; Management Fee; and [NAME]. He referred the Tribunal to the time sheets and list of duties and where they were to be provided and when, by the sole [NAME] who provided he said, [NAME] services to both the [NAME] and [NAME], duties which included cleaning. The works were often out when residents were out during the day or were not otherwise particularly noticeable. He noted that the Respondent had sublet her flat and was not at the Property for most of the time and would therefore struggle to actually see any of the work of the service in particular evidence. The [NAME] was said to be on site 5 days a week from 7am to 3.30pm weekdays. (37) The witness referred to the contract for lift servicing and repairs but did not refer the Tribunal to a copy of the lifts contract in particular. He did however provide the total sums sought in contribution for earch of the relevant years: 2015/16 £30.22, 2016/17 £65.86, 2017/18 82.71, and 2018/19 £171.63. (38) The witness referred to the management fee, which he explained covered the costs of administering the leases and the [NAME] services including billing and collection in ordinary circumstances. In the event all of the disputes raised had actively engaged the [NAME] and he found it hard to see how no service had been provided under this head as she had claimed. (39) The witness referred to the service charge contributions required from the [NAME]. He went through the basis of such charges principally to ensure that sufficient funds were already held by the landlord in the event of capital works that would be required to the [NAME] and to the [NAME] from time to time. At present most of the expenditure would be limited as the funds built up in the early years of the lease. The sum required was the current best estimate of a sum required from each tenant. It might be adjusted upwards or downwards in future years. Such sums had to include an estimate to cover future inflationary pressures on prices. Hearing - Respondent’s Representations (40) The Respondent having received the Directions from the Tribunal appeared to have taken no action to comply. The only evidence

9 included in the Applicants bundle said to be from the Respondent came from the Witness Statement of [NAME] dated 27 June 2022, some 6 months before it was referred to the Tribunal. Mr [NAME] was the legal representative of the Respondent and the Statement was made to the Court not to the Tribunal. (41) Mr [NAME] was not presented in person as a witness at the Tribunal. It is evident to the Tribunal that his statement was made (at para. 2) “…in support of the defendant’s [NAME] that the claimant’s claim should be struck out for reasons set out further below.” As stated earlier this was not a matter before the Tribunal at this hearing. (42) The Respondent failed to prepare and submit any witness statement for herself save for a brief Statement of 2No. x A4 sheets. It failed to contain any form of the statement of truth required. She stated simply “I object to the level of service charges demanded as literally there are no service provided by the Applicant as commented below (based on 2018/19 service charges).” (43) She set out a copy of some of the items listed for the sample year of 2018/19. She clarified that she intended to raise the same items from the similar schedules prepared for her Property for the earlier 3 years and that she raised the same queries. The remaining items were not queried but she made no comment about their reasonableness and payability at all. (44) Item: [NAME] £17,110.34 ([NAME] total, her share, about 0.886%). “I never seen any [NAME]. The Applicant employs a person but this person remains anonymous. It took me over 2 years to get and additional key to the building and when I received it the key changed to fob and there was no [NAME] for that matter to assist.” She offered [NAME]. (45) Item: [NAME] £2,266.83 ([NAME] total, her share about 4.695%). Her commentary was the same as for the [NAME]. She offered [NAME]. (46) Item: Lift servicing and repairs: £3,659.41. ([NAME] total, her share was about 4.695%). “This implies a contract is in place. It takes over 3 weeks for any reported problem with the lift to be checked. Its either the management is failing or their choice of lift maintenance company is not fit for purpose.” No sum was specified in the schedule but the Respondent orally confirmed her figure was [NAME]. (47) Item: Electricity and Water. There was no sum specified as to be collected by the landlord Applicant for the Property. The Respondent made no comment save for the comment “Full”. On questioning by the Tribunal she confirmed that she had no issue with the cost of

10 electricity and water. The Tribunal noted that these are not services provided or charged by the landlord in any case. (48) Item: Management Fee: £165.12 (Property charge). “Management fee is demanded but no management is offered to residents.” No sum was offered but, the Respondent confirmed orally her offer as [NAME]. (49) Item: [NAME]: £1,162.44 (Property charge). “Why is the [NAME] equals to the actual rull service charges? The building is made of concrete which is lterally exporsed and not covered. What is the reserve at this level for ?” She offered £100 instead. (50) On questioning by the Applicant and by the Tribunal subsequently it was established that she was challenging both [NAME]/ cleaning charges, the lift charges, the management fee and the [NAME]. Beyond these initial challenges the Respondent was not able to provide any substantive evidence or argument as to why any of them should be different from the sums demanded of her, either in total or by proportion, that was not supported by the Applicant’s evidence. (51) She did however change the total sum she was prepared to pay for all 5 services (the challenge to electricity and water having been withdrawn), to £150 for this sample year. She confirmed that the nature of her challenges were for the same items, for similar sums for the preceding three years and in this way sought to deal with all 4 years of challenge to service charge items and charges. (52) Eventually the Respondent declared in reply to the last question to her from Counsel for the Applicant; “I am not answering questions.” The Tribunal queried her words, which she duly repeated. This ended all questions to her about her case, from Applicant and Tribunal. Decision (53) The conduct of the Respondents case virtually completely ignored the Tribunal’s careful Directions issued to assist prior preparation for the hearing by both parties. The Applicant prepared a detailed bundle using the limited materials of challenge from the Respondent earlier and attempted to cover the obvious likely areas of challenge arising. (54) The Respondent failed to bring either an electronic copy or a paper copy of the bundle and therefore impaired her ability to follow proceedings at the hearing. She advised the Tribunal that she remembered the case well enough. She failed to prepare any witness statement for herself, despite being required to do so, which in turn impaired the case preparation for the Respondent as they remained largely unsure of her issues of challenge or any evidence required in support of their claim.

11 (55) The Respondent declined to seek or engage the services of a professional person who might better direct and focus any elements of challenge for one or more of the service charge years. She offered to provide additional details at a later date in support of her challenges but, the Tribunal explained to her that this was the hearing she had to prepare for and that there would be no later date to challenge the reasonableness and payability of service charges for these 4 years. (56) The Tribunal were disappointed at the Respondent’s refusal after limited questioning, to answer any further questions at the hearing. She was asked to repeat the remark which she did and the questioning and her case, ended abruptly. The Tribunal found that the answers she did give were guarded, confusing, inconsistent, reluctant. (57) The Respondent’s ability to switch the sums she was prepared to offer as reasonable and payable in the example of the year 2018/19, for one or more items, appeared to be based on little more than personal whim. Her case centred on the earlier Court proceedings but, we had no jurisdiction to consider them at all, a point explained to her by the Tribunal earlier in the hearing. Her case as presented, contained nothing at all of substance about the services or service charges or her challenge to them. The Tribunal had considerable difficulty understanding anything about her case before it that was at all coherent. (58) The Tribunal determines that all sums stated as claimed by the Applicant, whether disputed or not by the [NAME], for service charges in respect of services, provided under the Respondents leasehold interest, by the Applicant landlord, for the years 2015/16, 2016/17 2017/18 and 2018/19 at the Property, are reasonable and payable. (59) This determination is now passed back to the County Court to conclude all remaining matters under the CPR, in respect of claim H25YX999, that are reserved to itself. (60) Although no [NAME] was made in writing or orally at the hearing the Tribunal nevertheless considered whether or not an order limiting recovery through the service charges of any costs arising to the Applicant landlord should be made under S.20c and under Para 5 Schedule 11. The Tribunal declined to make any such Order. Name: [NAME]: 12 April 2023

12 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 [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the Tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the Tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

Appendix of relevant legislation

Landlord and Tenant Act 1985 (as amended) 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

13 (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 [NAME] 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 [NAME] 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 [NAME] under subsection (1) or (3) may be made in respect of a matter which - (a) has been agreed or admitted by the tenant,

14 (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. Section 20 (1) Where this section applies to any qualifying works or qualifying long term agreement, the relevant contributions of tenants are limited in accordance with subsection (6) or (7) (or both) unless the consultation requirements have been either— (a) complied with in relation to the works or agreement, or (b) dispensed with in relation to the works or agreement by (or on appeal from) the appropriate Tribunal . (2) In this section “relevant contribution”, in relation to a tenant and any works or agreement, is the amount which he may be required under the terms of his lease to contribute (by the payment of service charges) to relevant costs incurred on carrying out the works or under the agreement. (3) This section applies to qualifying works if relevant costs incurred on carrying out the works exceed an appropriate amount. (4) The Secretary of State may by regulations provide that this section applies to a qualifying long term agreement— (a) if relevant costs incurred under the agreement exceed an appropriate amount, or (b) if relevant costs incurred under the agreement during a period prescribed by the regulations exceed an appropriate amount. (5) An appropriate amount is an amount set by regulations made by the Secretary of State; and the regulations may make provision for either or both of the following to be an appropriate amount— (a) an amount prescribed by, or determined in accordance with, the regulations, and (b) an amount which results in the relevant contribution of any one or more tenants being an amount prescribed by, or determined in accordance with, the regulations. (6) Where an appropriate amount is set by virtue of paragraph (a) of subsection (5), the amount of the relevant costs incurred on carrying out the works or under the agreement which may be taken

15 into account in determining the relevant contributions of tenants is limited to the appropriate amount. (7) Where an appropriate amount is set by virtue of paragraph (b) of that subsection, the amount of the relevant contribution of the tenant, or each of the tenants, whose relevant contribution would otherwise exceed the amount prescribed by, or determined in accordance with, the regulations is limited to the amount so prescribed or determined.] Section 20B (1) If any of the relevant costs taken into account in determining the amount of any service charge were incurred more than 18 months before a demand for payment of the service charge is served on the tenant, then (subject to subsection (2)), the tenant shall not be liable to pay so much of the service charge as reflects the costs so incurred. (2) Subsection (1) shall not apply if, within the period of 18 months beginning with the date when the relevant costs in question were incurred, the tenant was notified in writing that those costs had been incurred and that he would subsequently be required under the terms of his lease to contribute to them by the payment of a service charge. Section 20C (1) A tenant may make an [NAME] for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before a court, residential property Tribunal or the Upper Tribunal, or in connection with arbitration 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 tenant or any other person or persons specified in the [NAME]. (2) The [NAME] shall be made— (a) in the case of court proceedings, to the court before which the proceedings are taking place or, if the [NAME] is made after the proceedings are concluded, to a county court; (aa) in the case of proceedings before a residential property Tribunal, to that Tribunal; (b) in the case of proceedings before a residential property Tribunal, to the Tribunal before which the proceedings are taking place or, if the [NAME] is made after the proceedings are concluded, to any residential property Tribunal; (c) in the case of proceedings before the Upper Tribunal, to the Tribunal;

16 (d) in the case of arbitration proceedings, to the arbitral Tribunal or, if the [NAME] is made after the proceedings are concluded, to a county court. (3) The court or Tribunal to which the [NAME] is made may make such order on the [NAME] as it considers just and equitable in the circumstances. Commonhold and Leasehold Reform Act 2002 Schedule 11, paragraph 1 (1) In this Part of this Schedule “administration charge” means an amount payable by a tenant of a dwelling as part of or in addition to the rent which is payable, directly or indirectly— (a) for or in connection with the grant of approvals under his lease, or applications for such approvals, (b) for or in connection with the provision of information or documents by or on behalf of the landlord or a person who is party to his lease otherwise than as landlord or tenant, (c) in respect of a failure by the tenant to make a payment by the due date to the landlord or a person who is party to his lease otherwise than as landlord or tenant, or (d) in connection with a breach (or alleged breach) of a covenant or condition in his lease. (2) But an amount payable by the tenant of a dwelling the rent of which is registered under Part 4 of the Rent Act 1977 (c. 42) is not an administration charge, unless the amount registered is entered as a variable amount in pursuance of section 71(4) of that Act. (3) In this Part of this Schedule “variable administration charge” means an administration charge payable by a tenant which is neither— (a) specified in his lease, nor (b) calculated in accordance with a formula specified in his lease. (4) An order amending sub-paragraph (1) may be made by the appropriate national authority. Schedule 11, paragraph 2 A variable administration charge is payable only to the extent that the amount of the charge is reasonable.

17 Schedule 11, paragraph 5 (1) An [NAME] may be made to the appropriate Tribunal for a determination whether an administration 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) Sub-paragraph (1) applies whether or not any payment has been made. (3) The jurisdiction conferred on the appropriate Tribunal in respect of any matter by virtue of sub-paragraph (1) is in addition to any jurisdiction of a court in respect of the matter. (4) No [NAME] under sub-paragraph (1) 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. (6) An agreement by the tenant of a dwelling (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination— (a) in a particular manner, or (b) on particular evidence, of any question which may be the subject matter of an [NAME] under sub-paragraph (1).