First-tier Tribunal Varies Lease for Full Cost Recovery
📌 In brief
The First-tier Tribunal adjusted a lease to ensure that the management costs are fully covered by the leaseholders. This adjustment was necessary to comply with the Landlord and Tenant Act 1987.
⚖️ Legal holding
A leaseholder's contribution to management costs must cover 100% of those costs.
📖 What the law says
This section allows any party to a long lease of a flat to apply to a tribunal for an order to vary the lease if the lease fails to provide satisfactory arrangements for certain matters. These matters include the repair or maintenance of the flat, building, or related land/buildings, insurance of the building, repair or maintenance of necessary installations, provision or maintenance of necessary services, recovery of expenditure by one party from another, computation of a service charge, and other matters prescribed by regulations.
Plain-English explanation — does not replace advice from a solicitor.
📖 Technical summary
The tribunal varied the lease to ensure full reimbursement of management costs.
📜 Headnote Official document
The First-tier Tribunal varied a lease to ensure full reimbursement of management costs under the Landlord and Tenant Act 1987, confirming that the appropriate proportion for service charge contributions is 5.56%. Judge A M Davies delivered the decision on 6 August 2020.
📚 Full judgment Official document
OUTCOME: Allowed
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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : MAN/00BY/LVT/2019/0008
Property : 115 [APPELLANT], [ADDRESS], Liverpool, [POSTCODE]
Applicant: [redacted]
Respondents : [redacted] Application : Variation of lease, section 35 Landlord and Tenant Act 1987
Tribunal Members : [APPELLANT], LLB
[NAME], MRICS
Date of Decision : 6 August 2020
DECISION
© CROWN COPYRIGHT
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DECISION The lease dated 21 December 2007 made between (1) [APPELLANT] (2) the Applicant and (3) the Respondent is varied by substitution of the figure 5.56% for the figure 5.25% at each of the Third Part and the Fourth Part of the Tenth Schedule to the lease.
REASONS 1. The Applicant is named as a party to 18 leases of flats at 115 [APPELLANT], Liverpool (the Property) including the Respondent’s lease of [ADDRESS] dated 21 December 2007 (“the Lease”). All 18 leases of flats in the Property are in similar terms.
2. Clause 6.3 of the Lease and the Fifth Schedule provide that the Applicant has responsibility for managing the Property. Clause 1 of the Lease and the Seventh Schedule obliges each leaseholder to contribute the “Service Charge Proportion” and “the Insurance Rent Proportion” to the management costs incurred by the Applicant, with the clear intention that the Applicant’s costs should be reimbursed in full by the leaseholders.
3. The Tenth Schedule to the Lease currently provides that the Service Charge Proportion and the Insurance Rent Proportion payable by the Respondent is 5.26%, and this figure also appeared in the other 17 leases.
4. The Applicant, having realised that application of these proportions would leave an annual shortfall in the recovery of management costs, obtained the consent of all leaseholders save the Respondent to vary the leases by substituting 5.56% as the appropriate proportion. The Applicant has not been able to make contact with the Respondent to establish whether or not he also consents to the variation.
5. As 5.56% x 18 equals 100.08% the Tribunal confirms that 5.56% is the correct figure to appear at the Third and Fourth Parts of the Tenth Schedule to each lease, including that of the Respondent.
6. Section 35(1) and (4)(c) of the Landlord and Tenant Act 1987 enables a party to a lease to apply to the Tribunal to rectify a lease which fails to provide for service charge contributions totalling 100% of management expenditure. The order for variation of the Respondent’s lease is made accordingly.
Judge [NAME] 6 August 2020
📊 How courts decide similar cases
Among 12 similar decisions in this collection:
- First-tier Tribunal (Property Chamber) First-tier Tribunal Grants Dispensation from Consultation Requirements
- First-tier Tribunal (Property Chamber) First-tier Tribunal Reviews Service Charge Reasonableness
- First-tier Tribunal (Property Chamber) Tenant Wins Service Charge Refund Due to Lack of Proper Notice
- First-tier Tribunal (Property Chamber) Tenant Wins Rent Repayment Order Due to Unlicensed Property
- First-tier Tribunal (Property Chamber) First-tier Tribunal Allows Landlord to Skip Section 20 Consultation for Urg…
- First-tier Tribunal (Property Chamber) Rent Repayment Orders Granted to Tenants in Unlicensed HMO
- First-tier Tribunal (Property Chamber) Landlord Allowed to Skip Consultation for Energy Contracts Until 2028
- First-tier Tribunal (Property Chamber) Tribunal Allows Dispensation of Consultation Requirements for Insulation Wo…
- First-tier Tribunal (Property Chamber) Tribunal Grants Dispensation for Urgent Repairs Without Consultation
- First-tier Tribunal (Property Chamber) First-tier Tribunal Grants Dispensation for Urgent Heating Repairs
- First-tier Tribunal (Property Chamber) First-tier Tribunal Allows Fire Alarm System Cost in Service Charge
- First-tier Tribunal (Property Chamber) First-tier Tribunal Grants Dispensation for Urgent Fire Prevention Works
A snapshot of this collection — not a prediction of your case's outcome.
⚖️ What tends to weigh in cases like this
✅ Tends to be accepted
- The landlord is dispensed from consultation requirements if it is reasonable to do so.
- Works are considered urgent and necessary for health and safety.
- No prejudice will be suffered by leaseholders when dispensing from consultation requirements.
- Service charges are deemed reasonable if they align with the lease agreement.
- The landlord is entitled to recover costs of installations through service charges if it complies with the act.
❌ Tends to be rejected
- (No factors listed as all similar cases favored the claimant/appellant)
Patterns observed in similar cases in this collection — every case is unique.
❓ Frequently asked questions
What did this decision decide?
It decided to vary the lease to ensure full reimbursement of management costs.
Who was involved?
The applicant, who manages the property, and the respondent, who is a leaseholder.
How did the court decide, and why?
The court decided to vary the lease because the current proportions did not cover the management costs fully.
Which laws or rules were applied?
The Landlord and Tenant Act 1987 was applied.
What was the argument that mattered most?
The argument that mattered most was ensuring that the management costs were fully reimbursed.
Was the decision for or against the person who brought the case?
The decision was for the person who brought the case.
What does this mean for someone in a similar situation?
Someone in a similar situation should ensure their lease covers all management costs.
What evidence or documents mattered?
The evidence included the current lease and the management costs incurred by the applicant.
Can a decision like this be appealed?
Yes, decisions like this can be appealed to a higher court.
Is it worth getting a solicitor for a case like this?
It is recommended to seek advice from a qualified solicitor for such cases.