First-tier Tribunal Sets Reasonable Service and Water Charges for Park Homes

OUTCOME: Allowed

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FIRST TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case References : CAM/00MF/PHC/2021/0006

HMCTS

: [NAME]

: [NAME], Three Mile Cross, Reading, [POSTCODE]

Park Home Addresses : 1, 2, 3, 4, 5, 8, 10, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27, 30, 31, 32, 34, 36, 37, 39, 40, 42, 43, 46, 48, 49 and 50 Mere Oak

Applicants

: [redacted] : Mrs [COUNSEL], [COMPANY]

Respondent

: [redacted]

: Mr [COUNSEL] of [NAME] of Application : 9th August 2021

Type of Application : To determine questions arising under the [NAME] 1983 or an agreement to which it applies – section 4 [NAME] 198

Tribunal

: Judge JR [NAME], IRRV (Hons)

Date of Hearing : 24th March 2022

Date of Decision : 26th April 2022

________________________________

DECISION _________________________________

© CROWN COPYRIGHT 2022

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Covid-19 Pandemic: Remote Video Hearing

This determination included a remote video hearing on the papers which has been consented to by the parties. A face-to-face hearing was not held because it was not practicable, and all issues could be determined in a remote hearing/on paper. The documents referred to are in a bundle, the contents of which are noted.

Pursuant to Rule 33(2A) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 and to enable this case to be heard remotely during the Covid- 19 pandemic in accordance with the Practice Direction: Contingency Arrangements in the First-tier Tribunal and the Upper Tribunal the Tribunal has directed that the hearing be held in private. The Tribunal has directed that the proceedings are to be conducted wholly as video proceedings; it is not reasonably practicable for such a hearing, or such part, to be accessed in a court or tribunal venue by persons who are not parties entitled to participate in the hearing; a media representative is not able to access the proceedings remotely while they are taking place; and such a direction is necessary to secure the proper administration of justice.

Decision

1. The Tribunal determines the reasonable Service Charge for the year 1st April 2020 to 31st March 2021 payable during the year 1st April 2021 to 31st March 2022 is a total of £38.705.51. For each of the 54 [NAME] (including the Rented Units) it is £716.77 per annum which is £59.73 per month.

2. The Tribunal determines that the Water Charge for the year 1st April 2020 to 31st March 2021 payable during the year 1st April 2021 to 31st March 2022 is a total of £17,224.39. For each of the 54 [NAME] (including the Rented Units) it is £318.97 per annum which is £26.58 per month.

3. The Tribunal orders

1) The Current Method of monthly payment in arrears shall continue as follows:

a) The water charges incurred during the year ending 31st March 2021 are to be paid monthly in arrears during the year ending 31st March 2022.

b) The water charges incurred for the year ending 31st March 2022 are to be paid monthly in arrears during the year ending 31st March 2023.

2) During 2022, the Respondent must:

a) provide each [NAME] with an account of how much they are in debit or credit under the present method of charging by 31st July 2022. For those in debit a scheme should be proposed to ensure that their monthly payments up to 31st March 2023 cover all

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outstanding sums so that they are up to date with their payments under the Current Method by 31st March 2023.

b) carry out a consultation under paragraph 22(f) of the Written Agreement with regard to Transitional Arrangements for the payment of the Water Charge quarterly.

Reasons

Introduction

4. An Application dated 9th August 2021 was made by the [NAME] listed in the Application for a determination of a question arising under the [NAME] 1983 or an agreement to which it relates under section 4 of the [NAME] 1983 as amended, for the following: (1) To determine the invoices to be included and the reasonableness of their cost in respect of the Service Charge incurred in the year ending 31st March 2021 payable in the year ending 31st March 2022. (2) To determine the payment of the water charge.

Description

5. The Tribunal did not inspect the [NAME] (also referred to as “the Park”) in respect of this Application but has done so on a previous occasion and so was able to interpret the plans and photographs provided. A plan of the [NAME] was provided.

6. It is noted that the [NAME] is served by a tarmac roadway, giving access to single and double Park Homes. Most of the units have concrete sectional garages. There are some mature trees on [NAME]. The [NAME] at the front entrance of the Park was originally a single unit Terrapin type building, containing one room with mains electricity connected. This fell into disrepair and was relocated in Number 53 in about 2016 which is one of a number of Park Home units owned by the [NAME] and rented out (the Rented Units).

7. In 2018 a portable jack leg cabin was purchased as an office and placed in much the same position at the entrance to the Park. At the same time an identical cabin was purchased which belongs to the Respondent and was placed alongside the [NAME].

The Law

8. Section 2 of the [NAME] 1983 (“the Act”) provides that the terms of Part 1 of Schedule 1 to the Act shall be implied and shall have effect notwithstanding the express terms of the Agreement. Paragraphs 16 to 20 of Chapter 2 of Schedule 1 to the Act were introduced by the [NAME] 1983 (Amendment of Schedule 1) (England) Order 2006 and the [NAME] 2013.

9. Paragraph 1(g) of the Express Terms of the Written Agreement defines the Service Charge as follows:

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“Service Charge” means a proportioned payment of the general costs of running and maintenance of the Park including the roads garages paths gardens fences and public areas drains electricity water and other service insurance and charges for electricity and water supplied to the [NAME] [ADDRESS] (but not to the individually occupied [NAME]) and the reasonable salary of any [NAME] warden such sums to be determined or estimated annually by the Owner’s Accountant whose decision shall be final and binding. Provided that where the owner seeks to rely on estimates provided by the Owner’s accountant then there should be appropriate adjustment during the following year when the exact costs are ascertained. The proportion payable by the [NAME] shall be a fraction of the whole calculated by dividing the number of weeks the [NAME]’s [NAME] home has been on the [NAME] home park in the year in question by a figure arrived at by adding together a similar calculation for each [NAME] home (including the [NAME]’s [NAME] home) that has been on the [NAME] home park during the year.”

The Hearing

10. A hearing was held on 24th March 2022, which was attended by Mrs [NAME], Secretary of the [COMPANY] for the Applicants and Mr [COUNSEL], Solicitor, and [NAME] [COUNSEL], [NAME] [NAME] for the Respondent.

Issues

11. The Applicants stated that on 1st April 2021 they received the demand for the Service Charge for the year ending 31st March 2021 payable over the year 1st April 2021 to 31st March 2022 (Copy provided). Following the belated receipt of the Service Charge spread sheet the Applicants informed the Respondent that they objected to certain invoices, outlining their reasons (copy provided) which the Respondent replied to on 10th April 2021 (copy provided).

12. The Respondent produced a spread sheet listing the invoices, amounts and item description incurred for the year 1st April 2020 to 31st March 2021 and payable over the year 1st April 2021 to 31st March 2022. Mrs [APPELLANT] on behalf of the [NAME] then produced a spread sheet which repeats the information and order on the Respondent’s spread sheet but adds an annotation as to which items are accepted and which are disputed.

13. Costs incurred for 2020/21 and payable 200/22 which are accepted and disputed.

Date Description Amount

£ Amount Accepted £ Amount Disputed £ Reason Disputed 1 18.12.20 [NAME] 1,299.00 649.50 649.50 Used by [NAME] 2 28.11.20 Adaptor 19.00 9.50 9.50 Used by [NAME] 3 29.05.20 Electricity/ Pump 56.18 56.18

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4 01.09.20 Electricity/ Pump 174.10 89.83 84.27 Previous Bill 5 24.11.20 Electricity/ Pump 261.04 86.94 174.10 Previous Bill 6 04.03.20 Electricity/ Pump 96.07 96.07

7 28.05.21 Electricity/ Pump 32.02 0 32.02 2022/23 charge 8 15.11.20 Archive Boxes 80.92 80.92 9 09.07.20 [NAME] 360.00 0 360.00 Used for Rented Home 10 13.07.20 Fencing 750.00 750.00 11 23.06.20 Fencing 1,298.50 1,298.50

12 16.06.20 Fire Check 116,94 116,94

13 29.05.20 Office Electricity 53.50 53.50

14 01.09.20 Office Electricity 55.06 55.06

15 24.11.20 Office Electricity 56.61 56.61 16 01.02.21 Office Electricity 52.75 52.75

17 04.03.21 Office Electricity 60.37 60.37 18 08.04.20 ICO-DPA Cert 40.00 40.00

19 28.11.29 CCTV 1,296.00 1,296.00

20 28.11.19 Insurance 2,726.84 2,726.84

21 28.11.20 [NAME] software 1,186.80 593.40 593.40 Used by [NAME] 22

Wages 28,766.05 27,928.20 837.85 Unjustified 23

[NAME] 240.00

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[NAME] 756.00

39,833.75 37,093.11 2,740.64

Per 55 units per annum

674.42

Per unit per month

56.20

14. Therefore, the following invoices are in issue: 1) Computer and Adaptor and [NAME] 2) [NAME] 3) Electricity Bills for Pump 4) Salaries

15. The Tribunal took account of the written and oral evidence adduced on each of the Invoices still in issue at the hearing and made its determination accordingly. Some of the invoices had been agreed just before the hearing or at the hearing and this agreement is confirmed and recorded.

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Evidence and Determinations

16. The Parties provided Written Statements of Case in a Bundle with supporting documentation which are précised and paraphrased below together with an account of the discussion of the evidence and submissions at the hearing.

1) Computer and Adaptor and [NAME]

Applicants’ Case

17. The Applicants questioned Invoices 1, 2 and 21 which related to the cost of the computer and adaptor and the [NAME] accounting program. It was submitted that these items are used by the [NAME] Home [NAME] as well as [NAME] and therefore the [NAME] [NAME] should meet half the cost. The delivery address for the computer was obscured which made the Applicants think it was for the [NAME] [NAME] and no licence has been produced for operating the [NAME] program at [NAME] which made the Applicant think the accounts for both sites were being produced at the sole cost of [NAME]. At the hearing Mrs [NAME] said that the Applicants’ concerns would be allayed if they were presented with some evidence of a licence in the name of [NAME] to use the program.

Respondent’s Case

18. The Respondent stated that Invoices 1 and 2 related to the purchase of a new computer which is used by the Respondent to manage the park and which replaced the Respondent’s outdated computer which was over five years old and had become slow and unreliable and issues were being experienced which could not be resolved with technical support.

19. In answer to the Tribunal’s questions [NAME] [NAME] said that it was an [NAME] make and the price included a full suite of programs such as Excel, Word etc. She said as it was a valuable item it had been delivered to her home address which had been redacted on the invoice.

20. Invoice 21 related to the cost of the annual [NAME] accounting subscription which a tribunal has previously held to be a recoverable expense. In answer to the Tribunal’s questions [NAME] [NAME] said that the [NAME] was used by the accountants only for [NAME] which is owned by [COMPANY]. This is a separate business from [NAME] which is owned by a sole trader. [NAME] [NAME] said she believed the Program was downloaded (as opposed to being purchased on a disk) following ongoing payment of a licence to use it. The licence was purchased specifically for [NAME]. The logins and information relating to the licence are held by the accountants.

Tribunal’s Decision

21. Firstly, the Tribunal considered the cost of the computer and adaptor. [NAME] products tend to be at the upper end of the market but have a reputation for reliability and security. It was appreciated that cheaper computers were

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available but these often did not come with a suite of programs which would need to be purchased separately. In this instance the cost included a full suite of programs. In addition, as a lap top the computer could be used for both office and homeworking. The Tribunal considered it reasonable that a computer for business use might be changed after 5 years. The Tribunal found from its knowledge and experience that the price of £1,299.00 and adaptor of £19.00 did not indicate that the computer was more than a standard product with programs for commercial use. The Tribunal determined that the cost of the computer and adaptor was reasonable.

22. Secondly, the Tribunal considered the [NAME]. An invoice was provided for the [NAME] which was addressed to [NAME] although it would have been helpful if the Respondent had provided some evidence such as a statement from the accountants confirming that the program licence is for the exclusive use of [NAME]. However, notwithstanding this, from its knowledge and experience the Tribunal found that [NAME] products are now accessed on line on payment of an ongoing charge. The cost of £1,186.80 was commensurate with a basic package allowing a specified number of users to access the program to carry out accountancy. Therefore, the Tribunal determined that the cost was reasonable.

2) [NAME]

Applicants’ Case

23. The Applicants stated that the [NAME] for which a charge of £360.00 was made was placed outside Number 25 which is a Rented Unit and [NAME] observed the contents of the garage belonging to that unit being placed in the [NAME].

24. Reference was made by the Respondent to the [NAME] being required to remove fly tipped waste. The Applicants said that the only area a fly tipper would have access to is the car park where there was some litter and bags of rubbish but these are still there. There is also waste around the Park left over from work that was carried out in 2017 including bags of builders supplies, a large plastic drum, wooden pallets, a water pipe and stop cocks but these remain (photographs were provided).

25. Mrs [NAME] said that she had received a number of reports from Park Home Owners that the tenants of Number 25 had put items from their garage into the [NAME]. It was therefore submitted that the [NAME] was for one of the Rented Units, namely Number 25 and its cost should not be included in the Service Charge.

Respondent’s Case

26. The Respondent said that Invoice 9 was for the cost of a [NAME] used for clearing rubbish which had been fly tipped at the back of the [NAME]. It was not used for waste from any of the Rented Units. Number 25 was refurbished in 2018 and has been since let. The [NAME] was located at the rear of Number 25 as being an open space which the [NAME] lorry could access and where the [NAME] would not cause an obstruction. In the past skips have been placed in the car park at the

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front of the Park for disposing of waste from around the [NAME] but this has led to individuals depositing their own waste at the expense of the Park Home Owners collectively.

27. [NAME] [NAME] [NAME] said that much of the capacity had been taken up by a large quantity of carpet, which had become sodden, had been fly-tipped, and this took up most of the capacity. In answer to the Tribunal’s questions on cost it was said that the [NAME] was 12 cubic yards and was for Mixed Municipal Waste

Tribunal’s Decision

28. At the hearing both parties referred the Tribunal to the plan to show the position of the [NAME]. The Tribunal accepted that the [NAME] needed to be positioned ‘off road’ to avoid the cost of a local authority licence and unauthorised wate being deposited by members of the public. It accepted [NAME] [NAME] statement that the [NAME] was for fly tipped waste, in particular the carpet referred to, and not for clearing waste from any of the Rented Units. However, it also accepted that some [NAME] may have seen other persons resident on the [NAME] disposing of items of waste in the [NAME]. From the Tribunal’s knowledge and experience it is very difficult to monitor the use of a [NAME] unless it is an enclosed type which may be locked, as often used for food waste, although this increases the price significantly. In the absence of evidence to the contrary the Tribunal found that the [NAME] was necessary and used for fly tipped waste.

29. From its knowledge and experience the Tribunal found that the charge of £360.00 for a 12-yard [NAME] for mixed waste was a standard price in Berkshire. It therefore determined the cost to be reasonable.

3) Electricity Bills

Applicants’ Case

30. The Applicants stated that two of the bills for electricity for the sewage pump included the unpaid amount from the previous bill as follows:  Invoice 4 dated 1st September 2020 for £174.10 includes £84.27 from Invoice 3 dated 29th May 2020  Invoice 5 dated 24th November 2020 for £261.04 includes £174.10 from Invoice 4 dated 1st September 2020 Therefore, Invoice 5 is an aggregate of Invoices 3 and 4 plus the new charge of £86.94  Invoice 7 dated 28th May 2021 should be included in the 2022/23 Service Charge year.

Respondent’s Case

31. In written representations the Respondent said that Invoices 3 to 7 related to the cost of electricity used to operate the sewerage pump which forms part of the maintenance and operation of the [NAME] and so recoverable under the Service Charge. At the hearing the invoices were examined. Mr [RESPONDENT] on

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behalf of the Respondent noted that Applicants were correct in identifying Invoice 5 as being an aggregate of Invoices 3 and 4. It was also conceded that Invoice 7 should be included in 2022/23 Service Charge year.

Tribunal’s Decision

32. The Tribunal found that the parties agreed that Invoice 4 dated 1st September 2020 for £174.10 included £84.27 from Invoice 3 dated 29th May 2020 and Invoice 5 dated 24th November 2020 for £261.04 included £174.10 from Invoice 4 dated 1st September 2020. The Tribunal therefore adjusted the amounts accordingly. It was also agreed that Invoice 7 should be included in the 2022/23 Service Charge year.

4) Salaries

Applicants’ Case

33. The Applicants referred to the previous decision of the Tribunal in which the Managers’ Salaries were set at £13,964.10 each being a total of £27,928.20 per annum for the Service Charge year from 1st April 2020 to 31st March 2021. Therefore, the increase of 3% was for the year and not over two years.

34. Reference was made to [NAME] [NAME] representing [NAME] at a tribunal and to a reference in a tribunal decision that she had carried out an annual [NAME] inspection at [NAME] which is owned by her mother.

35. It was stated that the [NAME] Managers are rarely on the park and the office does not have a letterbox. Overall, it was submitted that the Applicants received a poor level of service and that therefore there should be no increase.

36. Mrs [NAME] said that the Applicants felt any wage rise should be linked to performance. They were critical because they said they did not see the Managers on [NAME]. They had performed poorly with errors in accounts, lateness in sending out pitch fee and service charge demands and a failure to maintain the park to a high standard with building materials left around the [NAME] and a failure to respond in emergencies.

Respondent’s Case

37. [NAME] [RESPONDENT] said that the coronavirus during the year had added to their work load and they had had to use their home as an office and that for the year in issue they sought an increase of 3%. Their apparent lack of availability was because they were restricted from entering the Park during the coronavirus outbreak not least because many of the [NAME] are vulnerable.

38. With reference to Mrs [NAME] comment regarding the Park Home Owner’s view that wages should be linked to productivity, Mr [NAME] said that wages were part of the Service Charge and it was not for the Park Home Owners to determine what the warden should be paid. He said that on the Office of National Statistics website between November 2020 and June 2021

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wages had grown by 4.8% and average growth between September to November 2021, including bonuses was 4.2% and excluding bonuses was 3.8%. He submitted that an increase of 3% was reasonable.

Tribunal’s Decision

39. The Tribunal found that wages had increased little between 2008 and 2020 and inflation had been low during that period. The average percentage increases referred to are a reflection of higher wages being offered in certain sectors such as haulage and hospitality due to staff shortages in the latter part of 2021 and beginning of 2022. There was no evidence that higher pay was offered to fill vacancies at Park Homes Sites and the Tribunal did not consider that wages had increased in respect of wardens’ salaries for the period in which the service charge was incurred namely the year ending 31st March 2021. The Tribunal acknowledged that there is currently a rise in the cost of living which may or may not be reflected in wage increases in subsequent years.

40. Therefore, the Tribunal did not consider an increase for the Service Charge year in issue reasonable.

41. With regard to the Applicants’ seeking a review of the wardens’ salaries they are referred to the previous determination in which it was stated that clear evidence is needed to show that the role has changed.

5) Offices

Applicants’ Case

42. The Applicants stated as follows:  Firstly, the [NAME] located in one of the cabins is inaccessible as the steps are too high for the elderly [NAME] to climb and in any event the office does not appear to be used.  Secondly, there are two cabins with three rooms each. Four rooms have been advertised for rent in 2020. One whole cabin of 3 rooms should be exclusively for the [NAME] because they paid for it on the understanding that it was to be used as the [NAME]. If 4 rooms are let then one of them must be part of the [NAME].

43. If that is the case then the tenants of the offices that are let have the benefit of the facilities which were paid for by the [NAME]. This includes the toilet including the sewage pump, the CCTV, the security light, the car park and the use of the electricity.

44. The Applicants submit that the two cabins should be treated in the same way as Park Home units and the Service Charge should be divided by 57.

45. In any event Implied Term 22(f) states that the [NAME] must “consult a qualifying residents’ association, if there is one, about all matters which relate to the operation and management of, or improvements to, the protected [NAME]

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and may affect the [NAME] either directly or indirectly”. Renting the offices affects the [NAME] directly and no consultation has taken place.

Respondent’s Case

46. The Respondent said that if the cabins were to be let, they have their own meters. [NAME] [NAME] said that they were restricted from entering the Park and using the office during the coronavirus outbreak and so had to work from home. They would not have been able to meet [NAME] because many are vulnerable.

Tribunal’s Decision

47. Firstly, the Tribunal is of the opinion that the issue of letting the cabins relates to the [NAME] and initially is a matter for the local authority and it appears from the Applicants’ statement that they have been in contact with the Council.

48. Secondly, it is noted that the Applicants’ concerns about the use of the cabins in respect of a) whether one and a part of another is let, b) if they are let how the utilities costs are met and c) the use and costs incurred of one of the cabins as an office relates to the costs incurred during the year ending 31st March 2021 whereas the present case is concerned with costs incurred during the year ending 31st March 2022.

Payability of the Service Charge

Applicant’s Case

49. The Applicants submit that the Service Charge accounts are late and that as a result the Respondent has required them to be paid over 11 months instead of 12 months. In addition the Service Charge was divided between 54 homes and not 55.

Respondent’s Case

50. [NAME] [RESPONDENT] said she had apologised for the lateness which was due to health issues. Mr [NAME] said that the late service of the Pitch Fee and Service Charge demands had not prejudiced the Applicants as they had continued to pay the first instalment for the year at the previous rate and subsequent instalments would be adjusted.

51. The Respondent agreed that there had been 55 Park Homes on the Park but just prior to the year in issue one of the Park Homes became vacant and had to be removed due to its condition, therefore there were only 54 Park Homes on the Park during the year 1st April 2020 to 31st March 2021. This was not disputed by the Applicants.

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Tribunal’s Decision

52. The Tribunal determined that the lateness of the pitch fee and service charge demand did not invalidate the demands and they were still payable.

53. The Tribunal found that there were 54 Park homes on the Park for the year 1st April 2020 to 31st March 2021. Taking into account the wording of the paragraph 1(g) of the Express Terms of the Written Agreement the Tribunal determined that the Service Charge was to be divided between the number of Homes on the Park during the year.

Summary of Tribunal’s Decision Re Service Charge

54. The Tribunal summarises its decision as follows:

Date Description Amount

£ Amount Accepted £ 1 18.12.20 [NAME] 1,299.00 Determined reasonable 2 28.11.20 Adaptor 19.00 Determined reasonable 3 29.05.20 Electricity/Pump 56.18 Agreed 4 01.09.20 Electricity/Pump 89.83 Agreed 5 24.11.20 Electricity/Pump 86.94 Agreed 6 04.03.20 Electricity/Pump 96.07 Agreed 7 28.05.21 Electricity/Pump 0 Agreed to be charged 2022/23 8 15.11.20 Archive Boxes 80.92 Agreed 9 09.07.20 [NAME] 360.00 10 13.07.20 Fencing 750.00 Agreed 11 23.06.20 Fencing 1,298.50 Agreed 12 16.06.20 Fire Check 116.94 Agreed 13 29.05.20 Office Electricity 53.50 Agreed 14 01.09.20 Office Electricity 55.06 Agreed 15 24.11.20 Office Electricity 56.61 Agreed 16 01.02.21 Office Electricity 52.75 Agreed 17 04.03.21 Office Electricity 60.37 Agreed 18 08.04.20 ICO-DPA Cert 40.00 Agreed 19 28.11.29 CCTV 1,296.00 Agreed 20 28.11.19 Insurance 2,726.84 Agreed 21 28.11.20 [NAME] software 1,186.80 Determined reasonable 22

Wages 27,928.20 No increase determined reasonable 23

[NAME] 240.00 Agreed 24 [NAME] 756.00 Agreed 38,705.51 Total determined reasonable Per 54 units per annum 716.77 Per unit per month 59.73

55. Therefore, The Tribunal determines the reasonable Service Charge for the year 1st April 2020 to 31st March 2021 payable during the year 1st April 2021 to 31st March 2022 is a total of £38.705.51. For each of the 54 [NAME]

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(including the Rented Units) it is £716.77 per annum which is £59.73 per month.

Water

56. The Respondent provided copies of the Water Invoices and a spread sheet of the costs. Mrs [NAME] was critical of the schedule as item 8 of the period 2016 to 2019 and item 1 of 2019 to 2020 has a split invoice. The Applicants felt this was confusing and provided adjusted figures to avoid the split. Both the Applicant’s figures and the Respondent’s Schedule are included in the table below. Whichever is used the overall cost of water is the same.

Respondent’s Schedule

Applicant’s figures avoiding the split invoice

2016 to 2019 £ £ 1 4th April 2016 to 13th May 2016 5,513.90

2 13th May 2016 to 1st June 2016 1,476.90

3 2nd June 2016 to 22nd November 2017 36,609.04 4 23rd November 2017 to 22nd May 2018 16,512.45

5 23rd May 2018 to 19th November 2018 9,186.17

6 20th September to 13th November 2018 2,566.17

7 14th November to 10th March 2019 7,683.52 8 11th March 2019 to 31st March 2019 (21 days) 1,011.80

Sub Total 80,559.95 79,548.15

Adjustment 52,539.49

Total payable 1st April 2020 to 31st March 2021 28,020.46 27,008.66 Unit Charge 509.46 491.07 2019 to 2020 1 1st April 2019 to 27th May 2019 (57 days) 2,746.31 3,758.11 2 28th May 2019 to 11th September 2019 5,378.04

3 12th September 2019 to 24th September 2019 3,463.07

4 25th November 2019 to 13th February 2020 5,564.21 Total payable 1st April 2021 to 31st March 2022 17,151.63 18,163.43

Unit Charge 311.85 330.24

2020 to 2021

1 14th February 2020 to 14th May 2020 3,760.36

2 15th May 2020 to 14th August 2020 4,431.47 3 15th August 2020 to 20th November 2020 5,203.00

4 21st November 2020 to 18th February 2021 3,829.56

Total 17,224.39

Unit Charge 319.44 2021 to 2022 1 19th February 2021 to 27th May 2021 5,336.44

2 28th May 2021 12th August 2021 6,977.52

3 13th August 2021 to 25th November 2021 7,287.76

4 24th November 2021 to February 2022 To be received Total 19,601.72

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57. The Tribunal noted its previous decisions as follows:

Re Period 2016 to 2019

58. In the decision case reference CAM/00MF/PHI/2019/0010 dated 9th September 2019 it was noted that due to faulty meters, water leakage and the failure to invoice the Respondent regularly, arrears had accrued. The water charge then outstanding was, for periods 1–6 for 2016 to 2019 in the table above, reduced by £52,539.49 which was a leakage allowance negotiated by [NAME] [NAME] with the utility company, [NAME]. As at the time of that hearing the outstanding sum was £17,725.33 payable for the year 2016 to 2019 plus £7,683.52 payable for the year 2019 to 2020. The total water charge for the period 4th April 2016 to 31st March 2019 at that time appeared to be £25,408.85. As the water charges are paid in arears, the decision, based upon the figures then available, required the Respondent to provide a statement to each [NAME] informing them to what extent they were in debit or credit. If in debit to demand such amount as would bring the [NAME] in balance by 31st March 2020. The need for the demand was that some [NAME] had paid more than others to the Respondent in respect of the water charge which [NAME] should have anticipated would be significant due to the difficulties referred to.

59. On looking at the figures now available it is apparent that the total outstanding for the period 4th April 2016 to 31st March 2019 is £80,559.95 less the £52,539.49 leakage allowance totals £28,020.46 (or £27.008.66 avoiding the split invoice).

60. This sum should have been met, save for £2,611.61 (£47.48 per unit), using the Respondent’s Schedule, being the difference between £25,408.85 and £28,020.46, by the [NAME] payments by 31st March 2020 following the demands ordered to be sent out in the decision case reference CAM/00MF/PHI/2019/0010 dated 9th September 2019. This would have brought the [NAME] up to date as at 31st March 2020 on the basis that the charges are paid a year in arrears.

Re Period 2019 to 2020

61. The Water Charge incurred for the period 1st April 2019 to 31st March 2020 was £19,992.79. This, according to past practice, was payable during the year 1st April 2020 to 31st March 2021. In the course of proceedings for case reference CAM/00MF/PHC/2020/0007 dated 21st December 2020 the Respondent stated that it intended to send [NAME]’ water bills quarterly.

62. However, the Tribunal determined in its decision that the water charge incurred during the year 1st April 2019 to 31st March 2020 which is to be paid during the year 1st April 2020 and 31st March 2021 is to be paid monthly. Therefore, as now known the sum of £19,992.79, payable by [NAME] during the year 1st April 2020 and 31st March 2021 is to be paid monthly i.e., £363.51 per unit.

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63. The Tribunal went on to determine that if the method of payment was to be changed for the water charge incurred for the period 1st April 2020 to 31st March 2021 this was to be explained to the [NAME] and transitional arrangements put in place to avoid hardship.

Applicants’ Case

Amount of the Water Charge

64. The Applicant’s representative stated that no explanation has been received as to what transitional arrangements are to be made or how the method of payment of the water invoices is to be changed. No proposals have been put forward for a transitional agreement. Reference was made to Implied Term 22(f) which states that the [NAME] must “consult a qualifying residents’ association, if there is one, about all matters which relate to the operation and management of, or improvements to, the protected [NAME] and may affect the [NAME] either directly or indirectly”.

65. It was said that contrary to the decision in case reference CAM/00MF/PHI/2019/0010 dated 9th September 2019 the [NAME] have not received a statement of account for what they have paid.

Payability of Water Charge

66. The Applicants submitted that the Respondent did not provide the Invoices for Water within 28 days of a request. A request was made by the Applicant’s Representative by email on 6th March 2020 and on 14th March 2020

67. Therefore Article 9 of the Water resale Order should be applied, which states that half the average charge of the area is payable. As [NAME] is the local area for the Water Invoices dated 28th May 2019 to 17th February 2020 the charges should be reduced to £165.12 per unit.

Respondent’s Case

68. The Respondent stated that in case reference CAM/00MF/PHC/2020/0007 dated 21st December 2020 the Tribunal determined that all water charges for the period prior to 31st March 2020 should be paid fully before the commencement of the year 1st April 2021 i.e., by 31st March 2021.

69. It was said that many [NAME] are still not up to date with the payment of the water charge and the Respondent asked for a determination that they were in breach of the Written Agreement.

70. It was stated that in the Decision dated 21st December 2020 the tribunal held that the Respondent was entitled to change the method of charging for water from being included in the annual service charge to being payable under statutory implied term 21(b) of Schedule 1 of Part 1 of the [NAME] 1983, as amended. However, it also held that the Respondent should put in place transitional arrangements to avoid hardship to the [NAME] due to the change in method of charging.

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71. Unfortunately, it was not possible to agree a transitional arrangement for the year 1st April 2020 to 31st March 2021. As a result, the Respondent proposed that the water bills for that year should be paid in full by 31st March 2022 which will be 12 months after the end of that year and so in line with what has happened in previous years.

72. By way of a transitional arrangement the Respondent proposed that all the water charges for the period 1st April 2021 to 31st March 2022 should be paid on a monthly basis starting in April 2022 so that all the bills will have been paid in full no later that 20th September 2022 being six months after the end of that year.

73. With effect from 1st April 2022 the Respondent proposed that [NAME] pay for the water used on [NAME] within 28 days of being notified by the Respondent of the sum due based on the invoices received from [NAME].

74. In recent years [NAME] has typically delivered five bills per annum. The Respondent would then inform the [NAME] of their share of the relevant bill within 28 days of receiving the [NAME] and the [NAME] would then pay their share of the bill within 28 days of that notification.

Tribunal’s Decision

75. Firstly, the Tribunal considered the Applicants’ submission that the Water Charges should be halved because the Respondent did not provide a copy of the Water Invoices within four weeks of the request as required by Article 9 of the Waster Resale Order 2006. The Tribunal was of the opinion that the purpose of the legislation is to make sure that [NAME] are notified of the amount of the invoice together with the way it is apportioned within 28 days of a request. Until they are notified, the reduced charge is payable.

76. In the present circumstances the water charges are payable in arrears and the Respondent provided the total amount of the charge and the apportionment therefore is compliant with the Order with the demand. The purpose of the Order is not to require the Respondent to provide the invoices within 28 days only to make the amount and apportionment clear. There is a provision which requires the invoices to be produced under paragraph 22 (b) (ii) of the Written Agreement but there is no penalty for failing to provide the requisite information within a specified time.

77. The Tribunal made a decision after a full discussion at the hearing. The Tribunal considered it was reasonable that the water charge should be paid quarterly. Unlike the Service Charge which may vary due to different items and costs, the Water Charge was for a single utility, the costs for which although variable, is when demanded regularly, within certain parameters that can be anticipated by [NAME].

78. To affect a satisfactory transfer from the current method (the Current Method) whereby [NAME] pay the water charge for the previous year in monthly instalments to charging quarterly (the new Method) the Tribunal

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found that it was important that as many [NAME] as possible should be up to date with their water payments under the current method before a change was in place. This is to the benefit of both parties.

79. The time scale envisaged by the previous tribunal were, and as proposed by the Respondent in the present proceedings are, over optimistic in achieving a satisfactory solution.

80. The Tribunal orders that Current Method of monthly payment in arrears should continue as follows:

a) The water charges incurred during the year ending 31st March 2021 are to be paid monthly in arrears during the year ending 31st March 2022 as should be happening in any event.

b) The water charges incurred for the year ending 31st March 2022 are to be paid monthly in arrears during the year ending 31st March 2023, i.e., this year.

81. However, during the 2022, the Respondent must:

a) provide each [NAME] with an account of how much they are in debit or credit under the present method of charging by 31st July 2022. For those in debit a scheme should be proposed to ensure that their monthly payments up to 31st March 2023 cover all outstanding sums so that they are up to date with their payments under the Current Method by 31st March 2023 i.e., all water charges incurred to March 2022.

b) carry out a consultation under paragraph 22(f) of the Written Agreement with regard to transitional arrangements (Transitional Arrangements) for the payment of the Water Charge quarterly.

82. From its experience of payment schemes for tenants paying through service charges for major works on blocks of flats, the parties should be thinking of Transitional Arrangements being over 24 months.

Judge JR Morris

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APPENDIX 1 - RIGHTS OF APPEAL

1. If a party wishes to appeal the decision to the Upper Tribunal ([NAME]) 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.

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 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.

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.

APPENDIX 2 – THE LAW

The Law

Section 4 of the [NAME] 1983 (as amended)

(1) In relation to a protected [NAME] in England, a tribunal has jurisdiction – (a) to determine any question arising under this Act or any agreement to which it applies, and (b) to entertain any proceedings brought under this Act or any such agreement subject to subsection (2) to (6).

(2) Subsection (1) applies in relation to a question irrespective of anything contained in an arbitration agreement, which has been entered into before that question arose.

(3) In relation to a protected [NAME] in England, the court has jurisdiction— (a) to determine any question arising by virtue of paragraph 4, 5 or 5A(2)(b) of Chapter 2, or paragraph 4, 5 or 6(1)(b) of Chapter 4, of Part 1 of Schedule 1 (termination by owner) under this Act or any agreement to which it applies; and (b) to entertain any proceedings so arising brought under this Act or any such agreement, subject to subsections (4) to (6).

(4) Subsection (5) applies if the owner and [NAME] have entered into an arbitration agreement before the question mentioned in subsection (3)(a) arises and the agreement applies to that question.

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(5) A tribunal has jurisdiction to determine the question and entertain any proceedings arising instead of the court.

(6) Subsection (5) applies irrespective of anything contained in the arbitration agreement mentioned in subsection (4).

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FIRST TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case References : CAM/00MF/PHC/2020/0007

HMCTS

: [NAME]

: [NAME], Three Mile Cross, Reading, [POSTCODE]

Park Home Addresses : 1, 2, 3, 4, 5, 7, 8, 10, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27, 30, 31, 32, 34, 36, 37, 39, 40, 42, 43, 46, 48, 49 and 50 Mere Oak

Applicants

: [redacted] : Mrs [COUNSEL], [COMPANY]

Respondent

: [redacted]

: Mr [COUNSEL] of [NAME] of Application : Application for Review or Permission to Appeal

Tribunal

: Judge JR [NAME], IRRV (Hons)

Date of Original Decision: 26th April 2022 Date of Application : 9th May 2022 Date of Decision : 27th May 2022

________________________________

DECISION _________________________________

© CROWN COPYRIGHT 2022

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Decision of the Tribunal

1. The Tribunal has decided not to review its Decision and refuses permission to appeal to the Upper Tribunal because it is of the opinion that there is no realistic prospect of a successful appeal against its Decision.

2. In accordance with section 11 of the Tribunals, Courts and Enforcement Act 2007 and rule 21 of the Tribunal Procedure (Upper Tribunal) ([NAME]) Rules 2010, the applicant or respondent may make further application for permission to appeal to the Upper Tribunal ([NAME]). Such application must be made in writing and received by the Upper Tribunal ([NAME]) no later than 14 days after the date on which the First-tier Tribunal sent notice of this refusal to the party applying for permission to appeal. Where possible, you should send your application for permission to appeal by email to [EMAIL], as this will enable the Upper Tribunal ([NAME]) to deal with it more efficiently.

3. Alternatively, the Upper Tribunal ([NAME]) may be contacted at: 5th [ADDRESS] [POSTCODE] (tel: [PHONE]).

Reason for the Decision

4. The reason for the decision is that the Tribunal had considered and taken into account all of the points now raised by the Applicant, when reaching its original decision.

5. The original Tribunal’s decision was based on the evidence before it and the Applicant has raised no legal arguments in support of the application for permission to appeal.

6. For the benefit of the parties and of the Upper Tribunal ([NAME]) (assuming that further application for permission to appeal is made), the Tribunal has set out its comments on the specific points raised by the applicant in the application for permission to appeal, in the Appendix attached.

Judge J R Morris

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APPENDIX TO THE DECISION REFUSING PERMISSION TO APPEAL

For the benefit of the parties and of the Upper Tribunal ([NAME]), the Tribunal records below its comments on the grounds of appeal. References in square brackets are to those paragraphs in the main body of the original Tribunal decision.

Original Application and Decision

1. An Application dated 9th August 2021 was made by the [NAME] listed in the Application for a determination of a question arising under the [NAME] 1983 or an agreement to which it relates under section 4 of the [NAME] 1983 as amended, for the following: (1) To determine the invoices to be included and the reasonableness of their cost in respect of the Service Charge incurred in the year ending 31st March 2021 payable in the year ending 31st March 2022. (2) To determine the payment of the water charge.

2. The Tribunal determined the reasonable Service Charge for the year 1st April 2020 to 31st March 2021 payable during the year 1st April 2021 to 31st March 2022 is a total of £38,705.51 which for each of the 54 [NAME] (including the Rented Units) is £716.77 per annum which is £59.73 per month.

3. The Tribunal determined that the Water Charge for the year 1st April 2020 to 31st March 2021 payable during the year 1st April 2021 to 31st March 2022 is a total of £17,224.39, which for each of the 54 [NAME] (including the Rented Units) is £318.97 per annum which is £26.58 per month.

4. The Tribunal ordered 1) The Current Method of monthly payment in arrears shall continue as follows: a) The water charges incurred during the year ending 31st March 2021 are to be paid monthly in arrears during the year ending 31st March 2022. b) The water charges incurred for the year ending 31st March 2022 are to be paid monthly in arrears during the year ending 31st March 2023.

2) During 2022, the Respondent must: a) provide each [NAME] with an account of how much they are in debit or credit under the present method of charging by 31st July 2022. For those in debit a scheme should be proposed to ensure that their monthly payments up to 31st March 2023 cover all outstanding sums so that they are up to date with their payments under the Current Method by 31st March 2023. b) carry out a consultation under paragraph 22(f) of the Written Agreement with regard to Transitional Arrangements for the payment of the Water Charge quarterly.

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The Present Application

Applicants’ Grounds

5. The Applicants seek a review or permission to appeal the Tribunal’s decision dated 4th March 2022 on the following Grounds.

Ground 1

6. The Tribunal changed its decision CAM/00MF/PHI/2021/0010 in which it noted that there had been a miscalculation in the figures during 2019 and that the [NAME] should have paid £47.48 more than had been demanded to that date. The decision was based on figures provided by the Respondent and were not substantiated by a bill. The new figures involved a water bill dated May 2016 which included an amount unpaid from the previous bill.

Ground 2

7. The Tribunal misapplied the Water Resale Order. The Applicants said that in the past the Service Charge had included the Water Charge but the Service Charge demand received in March 2020 did not include the Water Charge. No details of the amount or how it was to be paid were provided. The Water Charge that should have been demanded was for the period 1st April 2019 to 31st March 2020 which is payable during the year 1st April 2020 to 31st March 2021.

8. The Applicants requested details of the Water Charge in an email dated 6th March 2020 and, in a letter, dated 14th March 2020 but were not told what the Water Charge was until 24th January 2021. Therefore Article 9 of the Water Resale Order should be applied, which states that half the average charge of the area is payable. As [NAME] is the local area, the Water Invoices dated 28th May 2019 to 17th February 2020 should be reduced to £165.12 per unit.

Respondent’s Response

Ground 1

9. The Respondent stated that in relation to the first ground of appeal, it is evident from the 2022 Decision that the Tribunal has not sought to reopen or vary the decision from 2019 (which was also given by Judge Morris). It is evident from [58]-[60] of the 2022 Decision that the Tribunal was able to calculate the correct amount payable by the residents for the period in question, having now had the benefit of seeing the actual invoices. All of the invoices were provided to the Applicants ahead of the hearing, and so if the Applicants wished to challenge the figures, they had plenty of opportunity to do so at the hearing.

For these reasons, the Respondent believes that this ground of appeal shows no realistic prospect of success.

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Ground 2

10. In relation to the second ground of appeal, the Applicants fail to explain why in their opinion the relevant paragraphs [75] and [76] of the 2022 Decision are wrong in law. The Respondent avers that the reasons given by the Tribunal in [76] of the 2022 Decision for finding that the water charges were compliant with the Water Resale Order are sound, in that “The purpose of the Order is not to require the Respondent to provide the invoices within 28 days only to make the amount and apportionment clear”. The Applicant has not advanced any reasoning to suggest that this determination was wrong in law, and as a result this ground of appeal also shows no realistic prospect of success.

11. Consequently, the Respondent believes that the application for permission to appeal should be refused.

Decision

Ground 1

12. In order to assess the Water Charge for the period in issue and the manner in which it should be paid the Tribunal set out a table of all the invoices that had been provided [56].

13. The determination in case reference CAM/00MF/PHI/2019/0010 was based upon the invoices for the period 2nd March 2016 and 10th March 2019 as noted at [28] of that Decision. The findings made in [57] to [60] of the Decision to which the present Application relates are based upon the invoices provided for the period from 4th April 2016 to 31st March 2019. The table at [56] is a statement of account which includes invoices that were not provided to the tribunal that made the determination in case reference CAM/00MF/PHI/2019/0010.

14. The Decisions record what amounts were outstanding at the time they were made. An [NAME] is liable for the total Water Charge incurred. The Decisions only affect the way the Water Charge is paid by the [NAME] year by year not the total amount of liability.

15. The Decision to which the present Application relates does not change the determination in case reference CAM/00MF/PHI/2019/0010 as regards an [NAME] total liability.

Ground 2

16. The Tribunal addressed the issue raised by the Applicants regarding Water Resale Order 2006 at [75] and [76] of its Decision.

17. As was noted in past decisions (CAM/00MF/PHI/2019/0010 and CAM/00MF/PHC/2020/0007), that due to faulty meters, water leakage and the failure by [NAME] to invoice the Respondent regularly, the Water Charge was not known or had not been calculated when the Service Charge was demanded. As a result, the Water Charge for the period 1st April 2019 to

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31st March 2020 payable in the year 1st April 2020 to March 2021 was not demanded at the same time as the Service Charge for that period.

18. The Water Resale Order 2006, Article 9(1), requires the [NAME] to inform the [NAME] of the charges which are payable in respect of any supply or service and how the charge has been calculated. Article 9(2) states that if the [NAME] so requests in writing the [NAME] shall furnish the [NAME] in writing with the following information: (a) all information used by the [NAME] in calculating the charges referred to in paragraph (1) including the charges payable by the [NAME] to the relevant undertaker or licensed water supplier and (b) the method by which the [NAME] has calculated the charges.

19. In the email dated 24th January 2021 the [NAME] stated that the total amount owed for the water bills covering the period from 20th September 2018 to the 23rd November 2020 totalled £57,051.17 and that that sum had been paid to [NAME] by [COMPANY], the [NAME] and [NAME]. It was also stated that this sum divided equally between 55 homes means the total owed per home is £1,037.29. No Water Charge was demanded or payable for the period in issue until this email and the individual letters to the [NAME] were sent.

20. The Tribunal was of the opinion that this information complied with Article 9 (1) and (2) (a) and (b) of the Order in that it stated: The total charges demanded (£57,051.17) by the relevant undertaker or licensed water supplier ([NAME]) and paid in total by the [NAME] ([COMPANY]) to the relevant undertaker or licensed water supplier ([NAME]). The period over which the charges were incurred (20th September 2018 to the 23rd November 2020) and the method by which the charges have been calculated (equally between 55 homes being £1,037.29 per [NAME]). The period in which the amount was to be payable was also stated and was one of the issues before the Tribunal.

21. The Order does not require the [NAME] to provide copies of the invoices, although this might be done as a means of providing the necessary information. However, there is a provision which requires the invoices to be produced under paragraph 22 (b) (ii) of the Written Agreement but there is no penalty for failing to provide the requisite information within a specified time.

Conclusion

22. The Tribunal’s Original Decision was based on the evidence and submissions before it and the Respondent has raised no new legal arguments or additional evidence in support of the application for review or permission to appeal. The Tribunal has decided not to review its Original Decision and refuses permission to appeal to the Upper Tribunal.