Tenant Secures Manager Appointment Over Leaseholder Disputes

OUTCOME: Allowed

© CROWN COPYRIGHT

In the FIRST-TIER TRIBUNAL [NAME_1] CHAMBER ([NAME_1]) Tribunal case reference : CAM/00KF/LAM/2023/0001 [NAME_1] : Mont Dol, 58 Chalkwell Ave, Westcliff-on-Sea, Essex [POSTCODE] Applicant :

[redacted]

Respondents : [redacted] [NAME_7] of application : Application for the appointment of a Manager pursuant to s.24 Landlord and Tenant Act 1987 Tribunal : Tribunal Judge S Evans Mrs M [NAME_8] (Hons) Date of decision : 24 January 2024

DECISION

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The Tribunal determines that:

1. The Application for an appointment of a manager is granted. 2. [NAME_9] is appointed manager of the [NAME_1] for an initial period of 3 years from 1 February 2024 on the terms of the Management Order attached to this decision. 3. [NAME_10] shall reimburse the Applicant the application fee of £100 and the hearing fee of £200 within 28 days of the date of this decision.

REASONS Background 1. The Application before the Tribunal is an application for the appointment of a manager, pursuant to section 24 of the Landlord and Tenant Act 1987.

2. The Applicant is the leasehold proprietor of flat 2 and garage 2 in the [NAME_1], which is a detached building, built circa 1920 and converted in 1957. The [NAME_1] contains 4 flats. 3. [NAME_6] is the leaseholder of flat 1, [NAME_5] is the leaseholder of flat 3, and Mrs [NAME_7] [NAME_7] is the leaseholder of flat 4.

4. The lease of flat 2 is dated 26 September 2008, and runs for a term of 151 years from 27 March 1957. The Applicant took a new lease of flat 2 on 5 April 2022 (following an earlier decision of this Tribunal as to premium on lease extension payable).

5. The lease of flat 1 is for 151 years and is dated 30 September 2008. [NAME_6] acquired this interest on 14 December 2008.

6. The leases of flats 3 and 4 are for a term of 99 years only from 27 March 1997. [NAME_5] acquired his interest in flat 3 on 22 June 2012. It is unclear when Mrs [NAME_7] [NAME_7] acquired her leasehold interest in flat 4.

7. The freehold title is held jointly by the Applicant and the above-mentioned leaseholders, registered with effect from 31 July 2018.

8. Matters appear to have progressed without event until 15 November 2020, when the Applicant expressed dissatisfaction with the lack of repair of the garages, a deteriorating garden wall, the state of the roof, and the condition of the drives and paths, amongst other things.

3 9. By 11 December 2020 the Applicant was writing to the other leaseholders in their capacity of freeholders about the above issues, and others.

10. By 26 February 2021 the Applicant had instructed lawyers to write to the freeholders about the issues, threatening a Notice under s.22 under the Landlord and Tenant Act 1987 unless management improved.

11. It took a year before the freeholders were able to agree a block management agreement, with a body called [NAME_11] (“[NAME_11]”), part of [COMPANY_11]. [NAME_27] is their Head of Block Management.

12. By 8 April 2022 an FRA had been commissioned by [NAME_11]. This report identified the need for suitable fire detectors, fire resisting doors, clearing of routes, compartmentation, testing and signage. All the risks presented by these defects were rated medium to high.

13. By 28 April 2022 [NAME_11] had served a s.20 Notice of Intent for roof works, including tile replacement, repointing, guttering replacement, repairs to render, and repairs to the columns in front of the main entrance.

14. By 10 May 2022 [NAME_11] had obtained a schedule of works for the above repairs, later undertaking a tender analysis.

15. By October 2022 [NAME_11] was writing to [NAME_10], expressing regret at what was considered to be their very hostile and aggressive emails. The email expressed the view that they were trying to make the s.20 process as difficult as possible.

16. On 21 October 2022 the Applicant wrote to the other leaseholders, making several points on the s.20 process, including that [NAME_10] had ignored quotes which the Applicant had obtained for pointing and external decoration; that several attempts to convene a meeting had been hampered by others trying to unsuccessfully submit quotes. The Applicant complained that this stalling, and blocking of essential maintenance, had put thousands of pounds on the price of each job.

17. On 8 November 2022 [NAME_11] wrote to all the leaseholders to provide 2 quotes for works.

18. On the following day, [NAME_9] of [NAME_11] wrote to all parties to indicate that she had received 2 emails very late the previous night, from [NAME_10], advising that they no longer wished for [NAME_11] to manage the building, but instead wanted a firm called [NAME_12] to take over with immediate effect. The e-mail went on to state that [NAME_11] intended to continue its contract, not only until the end of January 2023 on behalf of all freeholders and leaseholders, but also past that point, until all parties were in agreement as to the manager who would take over. [NAME_26] added that it would be very unprofessional of her to walk away from the building with immediate effect, and the contract does not allow her to do so. She added that she cared a lot about the building and about protecting all leaseholders’/ freeholders’ assets.

19. On 8 December 2022 the Applicant sent a s.22 Notice to the freeholders (i.e. all other [NAME_13]) complaining of the following: want of exterior redecorations, tiled and flat roof maintenance required, chimney stacks needing repair, fascia/barge boards and soffits requiring work, gutters and rainwater goods requiring attention, flashings requiring remediation, external facade render and vertical tiles requiring works, bathstone columns in want of repair, hard landscaping repairs needed, and garages in danger of collapse, with crumbling asbestos roofs.

20. The said Notice alleged that the landlord was in breach of obligations owed to the tenant under the lease, and that other circumstances existed which made it just and convenient to appoint a manager. Schedule 3 of the Notice alleged that clause 4(3) of the Lease had been breached by the freeholders. As regards other circumstances which made appointment just and convenient, the Notice alleged that [NAME_5] and [NAME_14] had totally dissociated themselves from all aspects of the maintenance and management of the [NAME_1] by refusing to engage with the managing agents appointed. There was now an impasse, it was alleged.

21. Mrs [NAME_7] [NAME_7]’s response to the Notice was to agree with what the Applicant said. She considered that [NAME_11] had acted quickly to engage a chartered surveyor, but the 2 of the leaseholders (namely [NAME_10]) had obstructed progress, by not engaging with the manager in a transparent way, by not attending meetings to discuss issues and make decisions with all other [NAME_13], and increasingly by engaging in negative communications with both the agent and other leaseholders, thereby creating the impasse which the Applicant had identified. Mrs [NAME_7] [NAME_7] wished to add to the list of complaints in the section 22 Notice the following: fire certification and entryphone equipment upgrade are both much needed.

22. On 26 December 2022 the Applicant made the instant application to the Tribunal.

23. In January 2023 [NAME_11] prepared a budget for 2023, and in the next month it provided an insurance renewal quotation and invoice. The Application 24. On 9 February 2023 [NAME_9] had provided a professional indemnity insurance certificate.

25. Directions were given by the Tribunal on 22 February 2023.

5 26. On 3 March 2023 [NAME_15] wrote to the Tribunal to inform it that she would accept the proposed appointment as manager, and that she would manage in accordance with the RICS code.

27. Mediation was offered by the Tribunal, and a date was fixed for 20 July 2023. Unfortunately, one of the parties withdrew late in the process, and mediation was not effective.

28. Revised Tribunal directions were therefore required on 23 August 2023. The Respondent’s statement of case was due on 29 September 2023, but none was filed.

29. On 6 October 2023 Mrs [NAME_7] [NAME_7] did email the Tribunal to indicate that she intended to represent herself; that she had no witnesses; that no inspection of the [NAME_1] was required; and that she was in favour of the appointment of [NAME_9] as manager for 2 years.

30. On 8 December 2023 Mrs [NAME_7] [NAME_7] emailed the Tribunal in similar terms to her October 2023 email. The Hearing 31. At the commencement of the hearing, the Applicant attended, being represented by a lay person, [NAME_4]. [NAME_10] attended, unrepresented. Mrs [NAME_7] [NAME_7] did not attend. The case was put back, so that she could be contacted. In due course she was able to attend by telephone. 32. [NAME_10] informed the Tribunal they had not complied with the recent directions because they had not received them. The Applicant and Mrs [NAME_7] [NAME_7] confirmed they had received them. Inquiries revealed the directions had been sent out on 24 August 2023 at 14:30 by email, and also by post. [NAME_5] stated he had not received the February 2023 directions either. 33. [NAME_10] therefore sought an adjournment. 34. [NAME_10] accepted they had received a copy of the bundle some 6 weeks before the hearing date. They confessed they had not read the bundle in full. It was pointed out to them that section 2 of the bundle contained the February and August directions. They indicated to the Tribunal that they did not intend to oppose the grounds for the appointment of a manager, nor argue that the s.22 notice was invalid; but merely wished to make representations on the suitability of [NAME_15].

35. The Tribunal refused the application for an adjournment. The Applicant and Mrs [NAME_7] [NAME_7] were ready to proceed. The long history of the matter militated against an adjournment. [NAME_10] were

6 in a position to have prepared fully for the hearing, had they wished. They were able to, and could be limited, to representations on any documents in the bundle, including emails which they had historically provided.

36. The Applicant via [NAME_4] then set out why [NAME_9] would be a suitable manager. [NAME_4] described how difficult it had been finding a manager. [NAME_11] was a small company but hugely experienced, [NAME_4] said. He explained how they had previously found a manager called [NAME_16], but [NAME_10] would not sign up to the agreement with them. 37. [NAME_4] then described why the schedule of works dated 10 May 2022 had not been progressed, because the 4 leaseholders could not agree on the way forward. He pointed to extant grounds maintenance issues, with photographs showing overgrown parts of the external spaces, and diseased conifers. He pointed also to some photographs of garages in the bundle, which showed garage doors rotten at the bottom, and alleged asbestos sheeting on the roof, which was concerning, given that the garages would appear to be subsiding, thereby increasing the risk of release of asbestos fibres. He also explained that the intercom at the main entrance door, linked to all 4 flats, needed repair. For example, Flat 2 can release the door but the occupants cannot converse with anyone at the door.

38. When asked why the formal appointment of [NAME_9] would make a difference, when it would not have appeared to have worked so far, [NAME_4] considered that there would be the potential for redress in law, as [NAME_10] would, in effect have to “give up their rights”. 39. [NAME_9] then gave evidence. She explained her qualifications by reference to her CV, starting with her appointment as a residential and commercial [NAME_1] manager with [NAME_17] from June 2015 to May 2018. She explained that she then took a temporary position at [NAME_17] but the commute to Kensington was too far. She lives in Basildon, not far away from the [NAME_1]. She then explained about her time as a senior [NAME_1] manager at [NAME_18] between November 2018 and January 2020. She then talked about her experience as the Head of Lettings and Block Management at [NAME_11], which is situated in Rayleigh. Personal circumstances recently had meant she had had to postpone her ARPM qualification. 40. [NAME_9] went on to explain that when [NAME_11] were first appointed in relation to the [NAME_1], she had held a meeting with all the [NAME_13]/freeholders, and she thought that a good start had been made. From that point onwards, she would make herself fully available, even giving all [NAME_13] her availability months in advance. However, at every opportunity, [NAME_5] or [NAME_6] would cancel the proposed meeting, and even give her the “silent treatment”. That made management very difficult.

7 41. When she first obtained the schedule of works in May 2022, she sent it out to the tender. She then tried to arrange meetings, but [NAME_10] would not attend.

42. She indicated that she had not been a court-appointed manager before in relation to any other [NAME_1].

43. She was taken to the accounts for the year ending 31 January 2023. She informed the Tribunal that they were arrears of service charge, because [NAME_10] were refusing to pay the management fee of £188. When asked what she would do about this, [NAME_9] indicated that she would have to instruct a solicitor - not something she wanted to do, as she would prefer to get along with all of the freeholders.

44. The Tribunal then took [NAME_9] to the schedule of works of 10 May 2022, and in particular the total of £50,000. She indicated that she did not consider all of the works to be urgent ones, with expenditure capable of being spent over a couple of years. She informed the Tribunal that she expected to be able to get ¼ of the total sum from at least 3 of the leaseholders, but not from 1 of them. When asked what her solution would be to this difficulty, she informed the Tribunal that she would look to payment plans, and possibly at legal solutions as well, because the longer such a situation went on, the greater would be the depreciation of the [NAME_1] as an asset.

45. When asked why she would be willing to be appointed as manager, given the history of the matter, and her personal difficulties over the last year, [NAME_9] stated that she loved her job. Although she had got into [NAME_1] management by accident, she loved the challenge. She said that behind it all, the parties wanted the same thing. She was not going to give up. She reminded the Tribunal that she had historically indicated that, even though [NAME_11] might have been out of contract, she would keep the management going until someone else was appointed. She pointed it to the fact there had been no reserve fund when she took up the position, but now there was some £4500. She explained that she had initiated the section 20 process, but [NAME_5] had wanted to use his own contractor, and thereafter he had not attended meetings, even though she had tried to arrange them. The process had thus stalled. 46. [NAME_9] considered that being appointed by the Tribunal would make a difference, because it would put matters in order. The leaseholders who were not complying would have to abide by a set of rules. She impressed upon us that she would be working on behalf of both the leaseholders and the freeholders, and that would help to remove some animosity. She equally recognised that she would be acting for the Tribunal, as it would have appointed her. She realised she would have to hit the ground running, as it were, and soon get up to speed on acting as a court-appointed manager.

8 47. Mrs [NAME_7] [NAME_7] then added that she understood that the lease terms provided that external decoration should be done every 8 years, but it was now 13 years since it was last done; and that was one matter she would like the manager to get on with. She added that she certainly wanted a manager appointed, and believed the current person is working very hard behind the scenes, and had adequately explained why things had not taken place as they should have done. She pointed to the unfairness of 2 leaseholders paying for management, but the other 2 not. She added that she had endured a leak into her flat for about 4 years from the roof on the south side. She added that she had moved in during July 2018, and had obtained an estimate for the repair of the garage roofs. She had been told that there was low grade asbestos on them. 48. [NAME_5] then made representations on behalf of himself and [NAME_6]. His points may be summarised as follows: (1) [NAME_9] had no experience as a court-appointed manager, which would prove a difficult task; (2) [NAME_9] has been managing since 2022 via [NAME_11]. The photographs showed the poor state of the [NAME_1] grounds, despite her appointment; it was unclear when [NAME_9] last inspected what the gardener was doing, but it was evident she was not supervising them properly; (3) [NAME_6] denies not paying management fees ([NAME_5] admitted he had not); (4) Whilst it is accepted that [NAME_9] is keen and enthusiastic, which is a positive, there was a question mark about whether she was able to manage the [NAME_1], particularly because she had not progressed the full section 20 consultation process (something they were entitled to assist upon, in the interests of avoiding further arguments); (5) It had taken 1 year to get a fire safety certificate and fire extinguishers. 49. [NAME_9] was asked about the grounds maintenance. She informed the Tribunal that [NAME_10] would not agree to the hours the others proposed, or to any increase in the summer months. The Applicant and Mrs [NAME_7] considered that 6 hours per week in the summer period, and 4 hours in the winter, was justifiable. [NAME_10] said 3 hours was sufficient in the summer and 1 hour in the winter, because the [NAME_1] does not get much leaf fall, and there is very little ongoing maintenance required, they said. Determination

9 50. At the end of the hearing the Tribunal members retired to consider all matters, and informed the parties orally that it would be appointing [NAME_9] as manager of the [NAME_1] for 3 years from 1 February 2024 to 31 January 2027, with reasons to follow in writing.

51. Those reasons are:

52. The Tribunal is satisfied that the section 22 Notice is valid.

53. It was not in dispute that the grounds for making an order were made out.

54. It is just and convenient to make an order, because, firstly, the [NAME_1] urgently requires co-ordinated management of works, in particular to the garages and roof. We agree that an impasse has been reached which must be overcome.

55. Secondly, the Tribunal was impressed by [NAME_9]’s attitude and commitment to management of this [NAME_1]. It might not be an easy task, admittedly, but the main reason for that has been the lack of co- operation of, and friction created by, [NAME_10]. The preponderance of evidence (the Applicant, Mrs [NAME_7] [NAME_7] and [NAME_9]) testifies as to that, we find. An example of this is what the Tribunal considers to be unrealistically low hours for grounds maintenance advanced by [NAME_10].

56. Thirdly, the lack of experience as a court manager cannot be an impediment; otherwise no proposed manager could ever be appointed for the very first time.

57. Fourth, we are satisfied that, with suitable co-operation from all leaseholders, the section 20 process can be progressed reasonably effectively. Stage 1 was undertaken without difficulty; we have no reason to consider stages 2 and 3 would not go as equally smoothly.

58. Fifth, whilst [NAME_9] is (rightly) reluctant to go to law to enforce leaseholders’ obligations or progress the works, the Tribunal has faith, given its findings find in paragraph 55 above, that [NAME_15] will resort to all available remedies in the Tribunal or Court, albeit if (and only if) necessary.

59. As to duration, we consider that 3 years should be the initial appointment, given that works are intended to be phased over at least 2 years after full consultation is completed. A 3 year appointment allows for a suitable buffer.

60. The application being successful, we determine that [NAME_10] shall reimburse the Applicant the application fee of £100 and the hearing fee of £200, within 28 days.

10 Judge:

S J Evans Date: 24/1/24

ANNEX – RIGHTS OF APPEAL

1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written Application for permission must be made to the First-Tier 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 to 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 [NAME_1] and the case number), state the grounds of appeal and state the result the party making the Application is seeking.

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P

FIRST-TIER TRIBUNAL [NAME_1] CHAMBER ([NAME_1])

Case reference

:

CAM/00KF/LAM/2023/0001

[NAME_1] :

Mont Dol, 58 Chalkwell Ave, Westcliff- on-Sea, Essex SS) 8NN. Applicant : [redacted] appointed manager) Respondent : [redacted] : Application as to whether an administration charge is payable, under para 5, Sch 11 CLRA 2002 Tribunal :

Judge Stephen Evans Judge [NAME_8]

Date of original decision :

15 October 2025

Date of decision : 2 March 2026

DECISION

© CROWN COPYRIGHT

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DECISION

(1) The Tribunal determines that an administration charge is payable pursuant to clause 2(17) of the lease by the Respondents in respect of the Applicant’s costs of the s.27A proceedings.

(2) If an in so far as the Tribunal needs to do so, it considers that it would be just and equitable to make an order in respect of the Applicant’s litigation costs pursuant to paragraph 5A of Sch 11 of CLRA 2002. The Respondents’ failure to pay their due proportion for the major works was the reason for the Applicant’s s.27A application, which was almost wholly successful;

(3) If the costs sum cannot be agreed, either the Applicant or the Respondents will need to issue a further application to this Tribunal for a determination of the amount pursuant to paragraph 5(1) of Sch 11 CLRA.

Background 1. On 24 January 2024 the Tribunal made a management order appointing the Applicant as Manager pursuant to s.24 Landlord and Tenant Act 1987 of the [NAME_1].

2. Between May 2024 and August 2024 major works were caried out on the [NAME_1] costing over £102,000. The Applicant had demanded the Respondents’ due proportion for these works, but they had failed to pay. Another leaseholder is said to have given a loan to the Applicant to enable the major works to proceed.

3. Proceedings were later brought in this Tribunal by the Applicant under s.27A Landlord And Tenant Act 2025 (payability and reasonableness of service charges) in CAM/00KF/LSC/2025/0608. The Respondents to that application are the Respondents to this application, being the [NAME_13] of flats 3 and 4 in the [NAME_1]. With the exception of 1 small reduction, the Tribunal found in its decision dated 15 October 2025 that the costs of major works challenged by the Respondents were all reasonable in amount and repairs had been undertaken to a reasonable standard.

4. On 5 November 2025 the Applicant applied to the Tribunal on form Order 1 for directions, which she categorised as a clarification of her duty, particularly whether she was entitled to “debit the accounts of the defaulting leaseholders [i.e. the Respondents] with the costs incurred in the tribunal proceedings CAM/00KF/LSC/2025/0608”.

5. This application was not copied to the Respondents, and the Tribunal directed that it should be.

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6. On 12 February 2026 Tribunal Judge Evans gave directions that the Tribunal was minded to treat the application of 5 November 2025 as an application pursuant to para 5 of Sch 11 of the Commonhold and Leasehold Reform Act as to whether an administration charge is payable by the Respondents.

7. It directed the Respondents to give a response, which they did. It also gave the Applicant the opportunity for a short reply, which she did on 20 February 2026. The Applicant’s representations 8. In her application supported by a 64 page bundle, the Applicant states that it is her understanding that she may be allowed to debit the costs of the service charge proceedings paid by her (particularly to lawyers [NAME_20]) as an administration charge pursuant to clause 2(17) of the Lease.

9. Clause 2(17) provides a covenant on the Respondents:

[redacted] the lessor and/or the superior lessor incidental to the preparation and service of a notice under section 146 and/or section 147 of the Law of [NAME_1] Act 1925 notwithstanding forfeiture is avoided otherwise than by relief granted by the court.”

10. The Applicant in her application then makes a reference to “as per 69 [NAME_21]?” - ostensibly a reference to [NAME_22] on Sea v Oram & Ghoorun [2011] EWCA Civ 1258, [2012] HLR 12.

11. She later states the purpose of the application is to ensure that she acts lawfully and equitably, and to prevent prejudice to the [NAME_13], who would otherwise bear the burden of costs as a service charge pursuant to paragraph 25 of the management order, caused solely by the Respondents’ defaults.

12. In her reply the Applicant maintains that the costs were incurred solely as a consequence of the Respondents’ default and are not routine management expenses; to require [NAME_13] to bear those costs through the service charge would be inequitable.

13. She further asks the Tribunal whether it would be willing to determine the amount payable if payability is established, and she gives figures. She also requests what she calls a modest fee for her time incurred as a direct consequence of the Respondents’ actions.

The Respondent’s representations

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14. The Respondent’s representations may be summarised as follows:

(1) They do not admit that any administration charge is payable.

(2) No administration charge demand has been served. No sum has been specified and no summary of rights and obligations has been provided. In those circumstances, there is no validly demanded administration charge payable.

(3) The Manager’s powers and entitlement to costs are governed by the management order. Clauses 17–19 of that order permit the Manager to instruct legal representatives and, subject to reasonableness, to be reimbursed for such costs from the service charge account.

(4) The Respondents do not accept that the management order or the lease authorises the recovery of tribunal litigation costs by way of an administration charge levied directly against individual leaseholders. The management order provides a specific mechanism for recovery, and the Applicant is put to strict proof of any alternative contractual or statutory entitlement.

(5) Further and in any event, the Applicant’s decision to instruct solicitors and counsel was voluntary. The First-tier Tribunal is intended to operate as a low-cost jurisdiction, and any attempt to recover substantial litigation costs via an administration charge could be seen as unreasonable within the meaning of Schedule 11 to the Commonhold and Leasehold Reform Act 2002.

The relevant law 15. Schedule 11 of the 2002 Act provides, so far as is material: “1(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,

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(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. …. 4(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. (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. … 5(1)An application 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 application under sub-paragraph (1) may be made in respect of a matter which— (a)has been agreed or admitted by the tenant,

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(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…”

16. [NAME_22] on Sea v Oram & Ghoorun [2011] EWCA Civ 1258, [2012] HLR 12 was a case in the civil courts. The Lease contained a service charge clause 1(b), and another clause called 3(12), which is in near identical terms to clause 2(17) in the instant case. Similar to this case also, the landlord carried out major works to the premises, and 2 of the leaseholders refused to pay. The leaseholders’ application to the Tribunal for a determination that their proportion of the costs of the works was not payable was not successful. Thereafter they still did not pay.

17. The freeholder landlord thus brought a claim in the county court seeking (1) the arrears of service charge (2) the costs of the tribunal proceedings pursuant to clause 3(12). Both a direct judge and a circuit judge agreed the leaseholders should pay both (1) and (2).

18. In between the district judge’s hearing and the circuit judge’s hearing, the landlord served a s.146 notice.

19. [ADDRESS] of Appeal dismissed a second appeal by the leaseholders. It dismissed counsel for the leaseholders’ argument that the landlord’s costs in the tribunal were not incidental to the preparation and service of a s.146 notice.

20. In so doing, [NAME_23] held:

“18…There is no doubt that the Freeholders incurred costs in the repair of the common parts of the Building in performance of their obligation under cl.4(1). That, in turn, created a liability on the tenants, including the [NAME_13], to reimburse the Freeholders for those costs under cl.1(b). The amount of that liability comes within the definition of service charge in s.18 of the Landlord and Tenant Act 1985 but cannot be enforced except in accordance with the terms of s.81 of the Housing Act 1996 and, in the case of a long lease, as defined, in accordance with the provisions of s.168 of the Commonhold and Leasehold Reform Act 2002. Each of those sections requires the amount of the

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tenant's liability to have been finally determined by the leasehold valuation tribunal. Moreover each of those sections requires or recognises that even when so determined the enforcement of that liability is subject to the provisions of s.146 even if the lease treats it as an additional rent recoverable as such. In short the enforcement of the liability of the tenants under cl.1(b) required first the determination of the tribunal and second a s.146 notice.

19 I do not doubt that the covenant contained in cl.3(12) is separate and independent of that contained in cl.1(b). It does not follow that if the Freeholders' cost of the repairs was only recoverable under cl.1(b) its costs of the proceedings before the tribunal were only so recoverable. Indeed I do not consider that the Freeholders' costs of the proceedings before the tribunal come within the terms of cl.1(b) at all. They were not incurred in performing the landlord's obligation to repair, the apportionment of such costs or the collection of such costs.

20 In those circumstances the district judge was right to have concentrated on the terms of cl.3(12)…

21 The district judge considered this matter at a time before any s.146 notice had been served. This accounts for her conclusion in [6] of her judgment and the decision of the circuit judge in [10] of his. Whilst neither of them spelled out the exact nature of the liability of the [NAME_13] under cl.3(12), there is no doubt as to their conclusions. I agree with them…

22 …

23 I reach these conclusions without regret. The proceedings before the tribunal were necessitated by the refusal of the [NAME_13], two out of the six tenants of the Building, to pay anything in respect of the Freeholders' costs of the repairs. If, as the [NAME_13] contended, the costs of the proceedings were only recoverable by the Freeholders under cl.1(b) then such proportion of the costs as was in excess of the [NAME_13]' rateable proportion would have been payable by the other four tenants who had paid their due share of the cost of the repairs and were not concerned in the proceedings before the tribunal.” Discussion and determination 23. The Management Order of 24 January 2024 provides (para. 26) that:

“The Manager may recover (subject to such provisions of the leases as may allow) administrative charges from individual tenants for their costs incurred in collecting ground rent, service charges and insurance which includes the cost of reminder letters, transfer of files to solicitors and letters before action.

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Such charges will be subject to legal requirements as set out in Schedule 11 of the Commonhold And Leasehold Reform Act 2002.”

24. It is thus clear that the Management Order does not provide any freestanding ability on the part of the Manager to demand an administration charge. The ability to do so is subject to (a) the Lease and (b) Schedule 11 of CLRA 2002.

25. Further, the Respondents point to paragraphs 17-19 of the Management Order which give the Manager power to bring s.27A proceedings and to incur solicitor and counsels costs; and entitlement to reimbursement from the service charge account in respect of costs, disbursements or VAT reasonably incurred in doing so.

26. However, 2 points are prevalent. It is notable that para 19 ends with these words:

“If costs paid from the service charge are subsequently recovered from another party, those costs must be refunded to the service charge account.”

27. It follows that the Management Order does not provide that the Manager may only recover her costs of proceedings through the service charge.

28. Secondly, in 69 [NAME_21] the CA found the [NAME_13]’ argument that the costs were still recoverable from all persons through the service charges to be unattractive.

29. The real question here is therefore whether the Manager can invoke para 26 of the Order.

30. The answer does not lie in 69 [NAME_21]. That CA case only illustrates that a landlord’s tribunal costs, even if incurred before the service of a s.146 notice, may be considered costs incidental to the preparation and service of such a notice if the circumstances permit.

31. Although not essential to the Tribunal’s decision herein, the Applicant’s case does not appear distinguishable from the material facts in 69 [NAME_21], at least up to the point of the freeholder’s issue of proceedings in the county court.

32. As to whether an administration charge is payable, the Tribunal finds as follows:

33. The Tribunal is bound to find that clause 2(17) in this case is an administration charge within the meaning of Sch 11, para 1 of CLRA 2002: see Christoforou v Standard Apartments Ltd [2013] UKUT 0586 (LC); [2014] L. & T.R. 12 in which [NAME_24] held at [32] that para 1(1) “would

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include costs incurred in the preparation of s.146 notices or schedules of dilapidations which are routinely the subject of indemnity covenants in residential leases.”

34. In Drewett & Anor v Bold & Anor [2006] EWLands LRX_90_2005 (04 May 2006), the landlords sent a without prejudice letter setting out the amount of the costs it expected for a retrospective grant of a licence to carry out alterations. The Lands Tribunal rejected the argument by the landlord that a demand complying with para 4 of Sch 11 was necessary before the LVT could have determined whether an administration charge was payable. The LT was unable to accept the argument that the word “payable” in paragraph 1 means “due”. See HHJ Huskinson at paragraphs 36 and 40-41 of the decision.

35. In that last paragraph the LT gave an example of a landlord who had made clear to a tenant that a large sum by way of administration charge was payable but the landlord was not prepared to serve a demand yet; it would be strange if the tenant was unable to obtain resolution of whether the charge was a reasonable charge. Also, the LT held at [43] that the fact that there is a dispute between the Landlords and the Tenant which had not yet been concluded does not deprive the LVT (now FTT) of jurisdiction to consider the questions in paragraph 5 of Sch 11.

36. Accordingly, the Respondents’ second argument in this case must fail; it is open to this Tribunal to determine whether an administration charge is payable.

37. The Tribunal determines that an administration charge is payable pursuant to clause 2(17) of the lease by the Respondents to the Applicant in respect of the Applicant’s costs of the s.27A proceedings.

38. If an in so far as the Tribunal needs to do, it considers that it would be just and equitable to make an order in respect of the Applicant’s litigation costs pursuant to paragraph 5A of Sch 11 of CLRA 2002. The Respondents’ failure to pay their due proportion of service charge for the major works was the reason for the Applicant’s s.27A application, which was almost wholly successful, just as in 69 [NAME_21]. It would not be just to make all leaseholders bear the costs.

39. However, unlike [NAME_25], the Respondents here have not had any inking prior to the Applicant’s Reply on 20 February 2026 as to what the sum claimed in costs might be. Moreover, there is little detail in that Reply, except as to a breakdown of dates and sums. Given that para 2 of Sch 11 provides that a variable administration charge is payable only to the extent that the amount of the charge is reasonable, the Tribunal considers the parties must now seek to negotiate a figure, with or without a formal demand. It would not be in accordance with the overriding objective for the Tribunal to assess it at this stage, or determine a date by which any sum must be paid.

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40. If the sum cannot be agreed, either the Applicant or the Respondents will need to issue an application to this Tribunal for a determination of the amount pursuant to paragraph 5(1) of Sch 11 CLRA 2002.

Judge:

S J Evans Date: 2/3/26

ANNEX – RIGHTS OF APPEAL 1. If a Party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written Application for permission must be made to the First-Tier at the Regional Office which has been dealing with the case.

4. The Application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the [NAME_1] and the case number), state the grounds of appeal and state the result the Party making the Application is seeking