Tenant Loses Challenge to Reasonable Administration Charge

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FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : LON/00BC/LSC/2024/0278 HMCTS code : P: PAPERREMOTE Property : 76 [ADDRESS], [POSTCODE] Applicant : [redacted] : [COUNSEL] Respondent : [redacted] Representative : [COMPANY] of [NAME] : Administration charges (schedule 11 of the Commonhold and Leasehold Reform Act 2002) Tribunal members : Judge Tueje Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 29th October 2024

DECISION

Description of hearing

2 This has been a remote hearing on the papers which has been consented to by the Applicant and not objected to by any Respondent. The form of the remote hearing was P:PAPERREMOTE. A face-to-face hearing was not held because no-one requested a hearing and all issues could be determined on paper. Decisions of the tribunal (1) The Tribunal makes the determinations set out at paragraph 19 to 33 below. (2) The Tribunal does not make an order under section 20C of the Landlord and Tenant Act 1985. The [NAME]

1. The [NAME], dated 20th May 2024, is made using the Tribunal’s standard form where a determination is sought pursuant to section 27A. In reality, the [NAME] is made in respect of an amount claimed by the Respondent as an administration charge pursuant to schedule 11 of the Commonhold and Leasehold Reform Act 2002. That is because the Respondent is seeking to recover the disputed costs, being £557.00 claimed in respect of waste disposal costs, from the Applicant only, rather than seeking a contribution towards costs that have been apportioned amongst other leaseholders.

2. The Tribunal nonetheless considers it would be proportionate and in accordance with the overriding objective, to determine the [NAME] because the Tribunal’s forms are an administrative tool employed by the Tribunal for convenience, there is no statutory requirement that an Applicant uses a specific form. The information the Applicant has provided satisfies the requirements of rule 26 of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013.

3. The similarity between the legal test to determine the reasonableness of service charges and administration charges means there is no prejudice to either party if the Tribunal determines the reasonableness of the cost of the administration charges being claimed for the building waste disposal. In any event, and notwithstanding the [NAME] form that was submitted, in their statements of case, the parties do not expressly refer to the disputed charges as service charges. The Tribunal’s directions order stated that the issues to be determined included the payment of administration charges under schedule 11 of the 2002 Act. Furthermore, like a service charge, the basis of a landlord’s claim for an administration charge is based on the terms of the lease. In this case, paragraph 1(1)(d) of schedule 11 of the Commonhold and Leasehold Reform Act 2002 is relevant. The applicable legislation is set out in the Appendix.

4. The Applicant disputes the charge of £557.00 on the grounds that the cost is excessive. Therefore, the Tribunal has limited its consideration to whether the

3 amount of the costs are reasonable, as the Respondent maintains, or whether it is excessive as the Applicant maintains.

Accordingly, no decision is made as to whether any other statutory requirements have been complied with in respect of the disputed costs. The Background 5. The Applicant is the leaseholder of the property known as 76 [ADDRESS], [POSTCODE] (the “Property”), which is a first floor 2 bedroom purpose built flat. The Respondent is the freeholder of the Property.

6. The Property is managed by [COMPANY].

7. The Tribunal was provided with a 70-page electronic bundle including: 7.1 The [NAME] form; 7.2 The Tribunal’s directions order dated 23rd July 2024; 7.3 The Tribunal’s Schedule of Items in Dispute completed by both parties; 7.4 The Applicant’s statement dated 24th September 2024; 7.5 The Respondent’s undated Reply/Position Statement; 7.6 Correspondence between the parties; 7.7 Photographs of the communal domestic bins that are the subject of the [NAME]; 7.8 The lease; and 7.9 Various quotations/estimates obtained by the Applicant.

8. The waste disposal costs arise as a consequence of events on 10th December 2023 when building waste was disposed of in the communal domestic rubbish bins. There is no information about what the building waste consisted of or how much it weighed. The Respondent’s caretaker, Mr [RESPONDENT] discovered this in the morning of 11th December 2023. Following which, and after viewing CCTV footage, the Respondent identified the Applicant’s sub-tenant was responsible.

9. The Respondent claims that the building materials left all six of the large rubbish containers full, including the bin used for garden waste. This left no room for residents to dispose of their household waste or the [NAME] to dispose of garden waste in these bins. Consequently, the Respondent said it needed to make urgent arrangements to deal with the situation, and did so by hiring a skip costing £432.00 Mr [RESPONDENT] and the Respondent’s [NAME] then transferred the building material from the communal rubbish bins into the skip. The Respondent is claiming £125.00 for Mr [RESPONDENT] and the [NAME]’s labour costs.

10. Therefore, in a letter dated 11th December 2023, e-mailed to the Applicant on 13th December 2023, the Respondent sought to recover £557, comprising £432.00 for

4 delivery, hiring and collection of a skip, plus £125.00 for the labour cost of transferring the building waste from the rubbish bins to the skip. The Parties’ Positions 11. In principle, the Applicant doesn’t dispute that the Respondent may be entitled to recover some costs, and in fact has proposed paying £140.00. Instead, the Applicant challenges the amount being claimed, arguing it is excessive.

12. The Applicant’s arguments can be broken down as follows:

13. The Applicant has obtained alternative quotations for waste disposal ranging from £65 to £140 ; the latter was obtained from a company called [NAME]. In a letter from the Applicant to the Respondent dated 31st December 2023, the Applicant offers to pay £140.00 for these costs.

14. The Applicant argues the Respondent should have viewed the CCTV footage to identify those responsible for the fly tipping, and then notified the Applicant. If the Respondent had done so, this would have given the Applicant an opportunity to make its own arrangements to remove the waste, which is what has happened in the past. Had the Applicant been given that opportunity, it could have arranged for the building waste to be removed at a lower cost based on its alternative quotes.

15. It was unnecessary and unreasonable to hire a skip, because Mr [NAME] states the skip that was hired was only half filled, and the building material was only moved a short distance from the communal bins to the skip. In fact, the Applicant suggests in the letter dated 31st December 2023, that it and the [NAME] would or could have moved the waste from the communal bins if they had been asked, and the waste could have been left near the bins pending removal, which would have been at no cost.

16. It is unreasonable for the Applicant to pay labour costs because Mr [APPELLANT] and the [NAME] are already paid a salary.

17. The Tribunal notes that while the Respondent states the cost of skip hire was £432 including VAT, it has not provided an invoice. However, while the Applicant considers the cost is excessive, it does not dispute the cost was actually incurred. Therefore, the Tribunal will proceed on the basis that the Applicant accepts the Respondent paid £432.00 for the skip hire.

18. The Respondent sets out its response in a Reply, which includes the following points: a. The building waste dumped in our bins was only discovered on Monday morning.

5 b. The top priority was to remove the building waste from the domestic bins as quickly as possible. The skip was the obvious place. c. Our original belief was that the fly tipping was carried out by outsiders. There was no building work being carried out in [ADDRESS] that weekend. d. It was after reviewing the CCTV footage at midday that we saw that it was dumped late on Sunday night by the tenants from flat 76. By this time the waste had already been moved to the skip. e. The tenants had the opportunity to deal with the waste themselves in a legal and professional way at their cost rather than creating a problem at [ADDRESS].

The Tribunal’s Decision 19. The Tribunal determines that the £577 claimed, representing £432.00 for skip hire including delivery and collection, and £125 for the labour costs, is a reasonable amount.

Reasons for the Tribunal’s Decision 20. As stated, the Applicant does not dispute in principle that a charge may be levied for this waste disposal. The Applicant also does not dispute the Respondent’s contention that all six domestic bins were left full on 10th December 2023, or that this was as a result of its [NAME] disposing of building material. The Tribunal notes that what the building material consisted of has not been specified. The Tribunal also takes into account that disposing of building waste in the communal domestic bins and leaving them full was not only anti-social, but it breached paragraph 1 of Part III of the schedule to the lease.

21. Addressing the points raised by the Applicant in turn.

22. Firstly, the Tribunal does not consider the alternative quotations can be regarded as comparable quotations.

23. The quotations obtained were as follows: 23.1 On 12th August 2024 [NAME] quoted “For loads up to 250 kg price breakdown is £40 man & van service + 14 pence per kilogram VAT, pricing depends on the weight.”

23.2 On 7th August 2024 [NAME] also stated: “Could be £60-65 plus VAT for 10 bags.”

23.3 [COMPANY] undated quote is £82.87, reduced from £97.49, for removal of a maximum weight of 150kgs.

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23.4 On 9th August 2024 [COMPANY] say that they “… can collect 10 rubble sack for £100 ..” 24. There are a number of general difficulties with the quotations. Firstly, these firms have provided quotations for waste disposal only, but not for the cost of hiring a skip, nor delivering and collecting a skip. In the Tribunal’s judgment, it was reasonable and appropriate to hire a skip so that there would be some receptacle for the building waste that was removed from the domestic bins.

25. The firms appear to operate on a fairly informal basis providing their quotations by App, e-mails without and company information, or by text message. Therefore, without knowing what the building waste consisted of, it’s unclear whether these companies were properly licensed to remove the building waste. For instance, if it consisted of unused paint or other materials requiring specialist disposal, it’s unclear whether these firms could appropriately deal with that type of waste.

26. Secondly, [NAME]’s 12th August 2024 quotation and [COMPANY] quotation are based on weight, but the weight of the building material disposed of is not known. Therefore, it’s unclear whether those quotations would cover the quantity of building waste that needed to be disposed of. 27. [NAME]’s 7th August 2024 quotation was presumably superceded by its 12th August 2024 quotation, particularly as the earlier quotation appears to be a provisional price as it states what the cost “could” be.

28. The quotation from [COMPANY] is based on removing 10 rubble bags, but again, it’s unclear whether that would cover the quantity of waste that needed to be disposed of here.

29. Finally, the Respondent accepts the costs incurred may have been a little higher than usual, but justifies this on the grounds that the priority was to make urgent arrangements to restore these waste disposal facilities. I consider that was a reasonable step to take because the unchallenged evidence is on the morning of 11th December 2023, the six domestic bins were full. Having adequate facilities to dispose of household waste is essential, it was appropriate that the Respondent took urgent action to address this, and it’s unsurprising that in doing so, it was charged a premium.

30. Furthermore, the urgent need to address this situation makes it impractical for the Respondent to have first given the Applicant an opportunity to address this situation before it incurred the cost. This would require the Respondent to view the CCTV, without knowing at that stage how much CCTV it would need to watch. It would then need to identify the culprits, contact the Applicant, allow it time to make

7 arrangements. When urgent action was required, it was not unreasonable for the Respondent to simply make the arrangements itself.

31. As stated, the Applicant complains that it and/or its [NAME] were not given an opportunity of pursuing the no-cost option of removing the building waste from the domestic bins before the Respondent incurred the cost of hiring a skip. But this assertion fails to take into account that the Applicant’s [NAME] had an opportunity to properly dispose of the building waste before dumping it in the domestic bins. They chose not to take that opportunity, despite it being clear to them that they were leaving the domestic bins full. Given the urgency, it was reasonable that the Respondent did not give the [NAME] a second opportunity to do what should have originally been done.

32. As to the Applicant’s suggestion that the items could have been removed and left beside the bins without incurring the cost of hiring a skip, in the Tribunal’s judgment, that would not have been reasonable, as it would have involved deliberately leaving a quantity of building material on the ground. In the Tribunal’s experience, that could potentially result in further fly-tipping.

33. In the Tribunal’s judgment, it is also not unreasonable for the Respondent to claim the labour costs for Mr [RESPONDENT] and the [NAME], notwithstanding them being on a salary. By requiring them to transfer the building waste from the domestic bins to the hired skip prevented them from carrying out the tasks the Respondent pays them for. In the Tribunal’s judgment and experience, the cost of £125 to engage two individuals to transfer a quantity of waste from the domestic bins to the hired skip is not excessive or unreasonable. Costs 34. In the [NAME] form the Applicant applied for an order under section 20C of the 1985 Act. Taking into account the determinations above, the Tribunal does not make an order under section 20C. Name: Judge Tueje Date: 29th October 2024

Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) 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.

8 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).

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APPENDIX

Extracts from Schedule 11 of the Commonhold and Leasehold Reform Act 2002

Paragraph 1 – Meaning of Administration Charge (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.

Paragraph 2 – Reasonableness of Administration Charges A variable administration charge is payable only to the extent that the amount of the charge is reasonable.

Paragraph 4 – Notice in Connection with Demands for Administration Charges (1) A demand for the payment of an administration charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to administration charges.

(2) The appropriate national authority may make regulations prescribing requirements as to the form and content of such summaries of rights and obligations.

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(3) A tenant may withhold payment of an administration charge which has been demanded from him if sub-paragraph (1) is not complied with in relation to the demand.

(4) Where a tenant withholds an administration charge under this paragraph, any provisions of the lease relating to non-payment or late payment of administration charges do not have effect in relation to the period for which he so withholds it.

Paragraph 5 – Liability to Pay Administration Charges (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)

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