Service Charges Reasonableness Determined by First-tier Tribunal

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AP/LSC/2023/0109 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] : [COUNSEL] [NAME] Respondent : [redacted] : In person Type of [NAME] : For the determination of the liability to pay service charges under section 27A of the Landlord and Tenant Act 1985 Tribunal members : Mrs [APPELLANT] Mr [APPELLANT] : 10 [ADDRESS] [POSTCODE] Date of decision : 15 October 2023

DECISION

2 Decisions of the tribunal (1) The tribunal makes the determinations as set out under the various headings in this Decision (2) Since the tribunal in this instance has no jurisdiction over administration charges, county court costs and fees, this matter should now be referred back to the County Court at Edmonton. The [NAME]

1. The Applicant seeks a determination pursuant to s.27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) as to the amount of service charges payable by the Respondent in respect of the service charge years 2018, 2019, 2020 and 2021.

.

2. Proceedings were originally issued in the Northampton County Court under claim no. J01YJ339. The claim was transferred to the Edmonton County Court and then in turn transferred to this tribunal to determine if any service charges were owed, by order of Deputy District Judge Welch. The hearing 3. The Applicant was represented by [COUNSEL] of counsel at the hearing and the Respondent appeared in person.

4. During her evidence the Respondent handed copies of correspondence from years prior to this claim and also a schedule of payments made. Mr [NAME] did not object to the documents being considered by the Tribunal.

5. The disputed items were listed on a Scott schedule upon which both parties commented and gave evidence. The background 6. The property which is the subject of this [NAME] is a two room, kitchen and bathroom/wc flat on the ground floor rear of a converted house.

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

8. The Applicant is the freeholder of the block in which the flat is situated. The Respondent holds a long lease of the property which requires the

3 landlord to provide services and the tenant to contribute towards their costs by way of a variable service charge.

9. The lease stipulates that the Respondent is required to pay 40% of the service charges incurred. Payment was to be by an interim payment and service charge at the time referred to in the 5th Schedule of the lease.

10. The Lessor covenanted to insure the Building, the cost of which was to be treated as part of the service charge.

11. Clause 5(2) and (4) require the Lessor to decorate the exterior and maintain and keep in good structural repair the main structure and the common parts of the Building.

12. By clause 9(4) of the lease the Lessor’s accountants were to certify the amount payable by the Tenant. The issues 13. At the start of the hearing the parties identified the relevant issues for determination as follows: (i) The payability and/or reasonableness of service charges in respect of insurance premiums for 2018 – 2021, accountancy fees in 2020 and 2021 and repairs in 2021.

14. Having heard evidence and submissions from the parties and considered all of the documents provided, the tribunal has made determinations on the various issues as follows. Insurance premiums 15. Mr [NAME] referred to the relevant clauses in the lease to support his assertion that the charges were payable. He noted that the charges were payable only to the extent that the costs were “reasonably incurred” and that any services or work was carried out to a “reasonable standard”.

16. The premiums were as follows: 1 January 2018 – 31 December 2018: £876.28. 1 January 2019 – 31 December 2019: £859.96 1 January 2020 – 31 December 2020: £1,237.86 1 January 2021 – 31 December 2021: £1395.92

4 The objection was “inadequate cover to claim” and expensive. He said that the cover complied with the requirements of the lease and no evidence to support the Respondent’s assertion had been produced. He countered Ms [RESPONDENT] comment that she would have preferred wider cover against the entry for [NAME] cover by stating the remaining areas of cover were included in the Building Insurance policy.

17. He confirmed that there was no copy of the insurance policy or schedule in the bundle. Since there was no evidence to show the costs were unreasonable, the Tribunal was invited to find the costs reasonably incurred.

18. Ms [NAME] said that she thought she had been paying the service charges monthly as she could not afford to pay the whole sum upfront each year. The roof above her flat had leaked, the landlord had asked her to obtain three quotes then she was told that no claim could be made under the insurance policy, leading her to believe the cover was insufficient.

19. She would have preferred wider cover than provided by the [NAME] cover.

20. She had sought advice from a [NAME]. [NAME] had told her that the premiums were too high. The tribunal’s decision 21. The tribunal determines that the amount payable in respect of [NAME] cover was not challenged. The insurance premiums payable by Ms [NAME] is 40% of the following sums: 2018: £876.28; 2019 £859.96; 2020 £875 and 2021 £900. Reasons for the tribunal’s decision 22. The Tribunal accepts that the premiums for 2018 and 2019 are reasonable on the assumption that the cover provided is that which is usual for a building of this age and type.

23. However there has been no explanation or any evidence produced to explain why there was such a significant increase in the following years. The Tribunal has done the best it can based on its experience as an expert tribunal in light of no substantive evidence having been produced by the Applicant, to the extent that the Tribunal has not even had sight of any insurance documents relating to the Building.

5 Accountancy fees 24. Mr [NAME] referred to the lease provisions. The costs were £316 in 2020 and £331 in 2021. He said that there was no alternative figure against which to measure the costs which appeared reasonable.

25. Ms [NAME] said she thought it was expensive but had not made any enquiries regarding the costs. The Tribunal’s decision 26. The Tribunal determines that the sums charged are reasonable. Ms [NAME] is responsible for 40% of the charges. Reasons for the Tribunal’s decision 27. No evidence was produced to support Ms [NAME] assertion that the amounts were excessive. In the Tribunal’s experience the fees were reasonable for the work undertaken. Repairs 28. In 2021 £414 was charged to the service charge account for repairs. Mr [NAME] noted that there had been s20 consultation regarding repairs including to the roof. No response had been received from any leaseholder and the lowest tender had been accepted.

29. Ms [NAME] said that the repairs included installation of a keysafe. She did not dispute that there had been full consultation in respect of the repairs. The decision of the Tribunal 30. The Tribunal determines that the repair cost of £414 in 2021 was reasonable. Ms [NAME] is liable for 40% of the charge. Reasons for the Tribunal’s decision 31. No evidence was produced to show the amount was unreasonable. The lowest tender had been accepted. The next steps 32. The tribunal considered the schedule of payments produced by Ms [NAME] and was satisfied that the payments had been credited to her service charge account. The Tribunal noted that Ms [NAME] said that she did not accept the reasonableness of the other charges but did not know what to

6 say regarding those charges, consequently she had not completed the [NAME] schedule. She did not produce any further evidence. 33. The tribunal in this instance has no jurisdiction over ground rent, administration or county court costs. This matter should now be returned to the County Court in Edmonton.

Name: [NAME]: 16 October 2023

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] should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-[NAME]-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber 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).