Service Charges Ruled Payable in Full by First-tier Tribunal

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/OOAG/LSC/2025/0620 County Court Claim Number : K2AY72W9 Property : 358A [ADDRESS] [POSTCODE] Applicant : [redacted] Representative : [COUNSEL] of Counsel Respondents :

[redacted] Representative : Not represented Type of Application :

For a service charge determination pursuant to Section 27A of the Landlord and Tenant Act 1985

Tribunal Members :

Judge P [NAME] of hearing : 20 June 2025 Date of decision : 28 July 2025

DECISION

Description of hearing

The hearing was a face-to-face hearing.

2 Decisions of the tribunal

(1) The service charges which form part of the County Court claim (Claim Number K2AY72W9) are payable in full.

(2) This case is now transferred back to the County Court to deal with the other elements of the County Court claim and counterclaim, including the ground rent and the question of costs and the administration charges incurred within County Court proceedings.

Introduction 1. The Applicant seeks, and following a transfer from the County Court, the tribunal is required to make, a service charge determination pursuant to section 27A of the Landlord and Tenant Act 1985 in relation to the Property. The service charge element of the claim relates to the service charges for the years 2021 to 2023. 2. [RESPONDENT] (“the First Respondent”) and [RESPONDENT[NAME] (“the Second Respondent”) are the joint leaseholders of the Property pursuant to a lease (“the Lease”) dated 25 April 1985. The Applicant is the freehold owner of the building of which the Property forms part and is the Respondents’ direct landlord.

3. On 16 May 2023 the Applicant issued proceedings in the County Court for alleged non-payment of ground rent and service charges in the sum of £12,546.46. The First Respondent filed a defence and counterclaim on 15 June 2023 and the matter was stayed. The stay was later lifted, and the claim was transferred first to Willesden County Court and then – on 8 January 2025 – to the tribunal. The latter transfer order was made by District Judge Griffiths and the wording of the order was “Transfer to the First Tier Tribunal Property Chamber”.

4. Following a discussion at the hearing it was agreed that the tribunal would just deal with the service charge element of the County Court claim and transfer the other elements of the claim back to the County Court. Procedural issues 5. For reasons that are a matter of record the First Respondent was on 6 May 2025 debarred from taking any further part in these proceedings. Despite the debarring order the First Respondent later sought an adjournment of the hearing. The request for an adjournment is refused, primarily because the First Respondent cannot request an adjournment having already been debarred but in any event the tribunal does not accept that there are any good grounds for an adjournment.

3 6. The Second Respondent submitted written evidence on the day before the hearing and the Applicant applied for that evidence to be excluded. The Applicant also applied for the Second Respondent to be debarred. In relation to the late evidence, as notified to the parties at the hearing, the tribunal determines that it must be excluded. It would have been very prejudicial to the Applicant to have to consider and deal with new evidence at such a late stage, and no good reason was given by the Second Respondent for filing her evidence so late. In relation to the debarring application, though, the tribunal notified the parties at the hearing that it did not consider the Second Respondent’s conduct to have been sufficiently poor to justify debarring her and consequently she was permitted to take part in the hearing. Applicant’s written case 7. [APPELLANT], a director of [APPELLANT], the Applicant’s managing agents, has given a witness statement. In it he sets out the relevant terms of the Lease, the unpaid amounts and the procedural history. He asserts that the ground rent and service charges have been validly demanded in accordance with the Lease, and he has attached copies of the relevant service charge accounts, a statement of arrears and copies of relevant demands.

8. The Applicant notes that the Second Respondent has raised certain objections to particular heads of charge, and the Applicant has commented on each of these items in turn.

9. The Applicant notes that the management fees are challenged by the Second Respondent on the basis that she considers the fees to be excessive, but it adds that no comparable evidence has been obtained. Alleged leaks at the Property are also relied upon, but the Second Respondent has failed to file any witness evidence supporting this and the Applicant states in its witness statement that it is unaware of any such leaks.

10. In relation to insurance commission, the Applicant notes that the Second Respondent requests “full disclosure of the commissions received by the management company from the [NAME] for purchasing building insurance through them” and states that “these commissions need to be adjusted against the service charge account”. The Applicant has confirmed in writing that it takes no commission from [NAME].

11. In relation to the insurance premium itself, this is challenged by the Second Respondent on the basis of the alleged leaks in the Property. However, states the Applicant, the Second Respondent has failed to file any witness evidence supporting this and the Applicant has confirmed in its witness statement that it is unaware of any such leaks.

4 12. In relation to cleaning charges, the Applicant states that there is a bare allegation from the Second Respondent that these are excessive, and no comparable quotes have been obtained.

13. In relation to legal charges by the Applicant’s solicitors, the Applicant asserts that the fees charged are within market norms. In any event, it submits that the administration charges comprised within the £12,546.46 claimed in the County Court proceedings should be decided by the County Court pursuant to paragraph 5A of the Commonhold and Leasehold Reform Act 2002.

14. The Applicant notes that the Second Respondent complains that there was no communication or statement of account, but the Applicant states that all demands were properly served and addressed to the Second Respondent at her usual or last known residence. Respondents’ written case 15. In his defence to the County Court claim the First Respondent describes the Applicant’s claim as ‘spurious’ and asserts that none of the charges are agreed or necessary. He adds that his legal defence lawyer will provide detailed arguments and supporting evidence, but no such arguments or evidence have been forthcoming.

16. The Second Respondent’s written case is summarised above in the Applicant’s response to the objections raised by the Second Respondent and no purpose would be served by setting it out again. Discussion at hearing 17. Mr [APPELLANT] for the Applicant said that in the absence of a ‘prima facie’ case (i.e. a basically arguable case) from the Respondents, or any evidence to support their assertions, the charges should all be adjudged to be reasonable and payable.

18. The Second Respondent said at the hearing that she had not received service charge demands and that these should have been sent to her by email or to what she stated was her address for correspondence. In response Mr [RESPONDENT] said that there was no document from the Second Respondent stating that the Property address was not her correspondence address, and the Applicant was entitled to send demands to the address on its file in the absence of evidence that demands were not being received.

19. Mr [NAME] said that there had been previous proceedings in relation to payment arrears and that the Second Respondent had participated in those proceedings and so was well aware of the fact that arrears had built up and were not being paid. He was asked by the tribunal about

5 the leak issue, and he said that the position had been investigated and that no leaks had been found. The tribunal also asked him questions about the Second Respondent’s other complaints. Tribunal’s analysis 20. The Applicant has provided sufficient information on the various charges, including an analysis of the Lease, copy service charge accounts, copy demands and a statement of arrears that it has fallen to the Respondents to make out a basic case for the Applicant to answer as to why specific service charges are not payable.

21. The tribunal has considered the Respondents’ arguments and considers those arguments to be extremely weak. The First Respondent has merely made an assertion that the charges are not payable, and whilst in his County Court defence he indicated that he would provide evidence in support of his position he has not done so. His defence is therefore not credible.

22. In relation to the Second Respondent, whilst she has made slightly more detailed submissions there is no real substance to them. Anyone can claim that there have been leaks in their building or can imply that their landlord has taken commission or can state that management fees or cleaning charges are excessive. But she has provided no comparable evidence, no evidence of sub-standard services, no legal arguments and no other support for her assertions.

23. As regards the service of demands, on the basis of the evidence before us, including the lack of evidence that the Second Respondent notified the Applicant that she wanted demands sent to a different address, we are satisfied that demands were validly served. In addition, on the basis of the Applicant’s evidence that the Second Respondent was involved in previous proceedings – which she has not contradicted – it is not credible that she was unaware of the arrears position.

24. We therefore conclude, in the absence of any credible submissions from either of the Respondents, that the service charge element of the Applicant’s County Court claim is payable in full.

Name:

Judge P Korn

Date:

28 July 2025

6

RIGHTS OF APPEAL

A. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) a written application for permission must be made to the First-tier Tribunal at the regional office dealing with the case.

B. 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.

C. If the application is not made within the 28 day time limit, such application must include a request for extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

D. 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.

7 APPENDIX

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 [NAME], in connection with the matters for which the service charge is payable. (3) For this purpose - (a) "costs" includes overheads, and (b) costs are relevant costs in relation to a service charge whether they are incurred, or to be incurred, in the period for which the service charge is payable or in an earlier or later period. Section 19 (1) Relevant costs shall be taken into account in determining the amount of a service charge payable for a period - (a) only to the extent that they are reasonably incurred, and (b) where they are incurred on the provisions of services or the carrying out of works, only if the services or works are of a reasonable standard; and the amount payable shall be limited accordingly. (2) Where a service charge is payable before the relevant costs are incurred, no greater amount than is reasonable is so payable, and after the relevant costs have been incurred any necessary adjustment shall be made by repayment, reduction or subsequent charges or otherwise. Section 27A (1) An application may be made to the appropriate tribunal for a determination whether a service charge is payable and, if it is, as to - (a) the person by whom it is payable,

8 (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 application may also be made to the appropriate tribunal for a determination whether, if costs were incurred for services, repairs, maintenance, improvements, insurance or management of any specified description, a service charge would be payable for the costs and, if it would, as to - (a) the person by whom it would be payable, (b) the person to whom it would be payable, (c) the amount which would be payable, (d) the date at or by which it would be payable, and (e) the manner in which it would be payable. (4) No application under subsection (1) or (3) may be made in respect of a matter which - (a) has been agreed or admitted by the tenant, (b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which the tenant is a party, (c) has been the subject of determination by a court, or (d) has been the subject of determination by an arbitral tribunal pursuant to a post-dispute arbitration agreement. (5) But the tenant is not to be taken to have agreed or admitted any matter by reason only of having made any payment (6) An agreement by the tenant of a dwelling … is void in so far as it purports to provide for a determination – (a) in a particular manner, or (b) on particular evidence.