Tenant Successfully Challenges Service Charge Demand

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CHI/19UD/LSC/2024/0031/BS Property : [ADDRESS], [POSTCODE] Applicants : [redacted] : Mr [COUNSEL]

Respondent : [redacted] : Mr [COUNSEL] of application : Determination of liability to pay and reasonableness of service charges Section 27A Landlord and Tenant Act 1985 Tribunal members : Valuer Chair R Waterhouse FRICS, [NAME] D Cotterell FRICS Venue : Courts of Justice, [ADDRESS], Bournemouth Date of Hearing

Date of Decision : :

2 December 2024

17 December 2024

DECISION

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DECISION OF THE TRIBUNAL:- Initial Comment 1.The Tribunal is very grateful to the parties for their careful explanations of their submissions. Procedural History Background 2.The Applicants made an application for determination of liability to pay and reasonableness of service charges for the year 2023/2024. 3.The application was received on 20 February 2024 4. The Applicants further seek orders pursuant to Section 20C of the Landlord and Tenant Act 1985 and paragraph 5A of Schedule 11 of the Commonhold and Leasehold Reform Act 2002.

5. The dispute relates to works and scaffolding to repair balconies, renew balustrades and upgrade gutters, facias and downpipes.

6. Directions were issued on 19 July 2024 listing the application for a case management and dispute resolution hearing on 13 September 2024.

7. A case management and dispute resolution hearing took place at Havant Justice Centre as directed and was attended remotely by [NAME] and [NAME] from [NAME] and [NAME] for the Applicant and in person; [APPELLANT] and [RESPONDENT] for the Respondent.

8. Further directions were issued on 13 September 2024 setting a timetable for the exchange of documents preparatory to a determination on the papers.

9. By a case management application dated 9 October 2024 the Respondent requests an oral hearing to enable their witnesses to attend in person.

10. The Tribunal approved the case management application in accordance with rule 31 of the tribunal procedure Rules 2013. The Tribunal notes the Applicant had made an earlier case management application referencing potential issues in travelling the distance to Havant Justice Centre for hearing. The hearing will therefore take place at a venue closer to the subject property.

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Preliminary Matters 11. The Tribunal confirmed with the parties that the documents before the Tribunal comprised a 267-page bundle. The Hearing The Nature of the Property 12. The Applicants are all leaseholders of [ADDRESS], [POSTCODE]. The subject property is contained in a block of flats built around 1986 across ground, first and second floor.

13. The parties agree that the block has in recent years not been maintained to the level warranted and this has led to a back log of issues requiring repair. Relationship of Parties involved with Launceston House 14. The Tribunal understands that the freehold of the building resides in 442 [COMPANY]. The Company Secretary is Mr [COUNSEL]. The Managing Agent for the block is Mr [COUNSEL]. The company proposed by the managing agent to carry out the works is [NAME] which is owned by Mr [NAME]. Mr and Mrs [NAME] are joint leaseholders for Flat 11. The Discussion 15. The Tribunal identified that the validity of the Invoice was a preliminary issue to be considered.

16. The Applicant at p 27 para 27 of their “Submission To First Tier Tribunal Property Chamber (Residential Property)”. 17. “The invoice sent for the interim Service Charge (see Service Charge dated 11/02/2024 at page 100) does not include the correct information advising leaseholders how to raise their concerns or challenge the charges. The Service Charge Invoice is therefore not a lawful demand.” 18. The Applicant confirmed that the Invoice on p 113 of the submission contained a demand for Flat 11 for £4605.70 dated 11 February 2024, but it was not accompanied by a Summary of Rights and Obligations document.

4 19. The Respondent explained the background of the repairs to the building and the series of meetings that had taken place over the months before the invoice explaining the proposed works. The Respondent confirmed that the Invoice dated 11 February 2024 was not accompanied by a Summary of Rights and Obligation document. The Law 20. Landlord and Tenant Act 1985 21B Notice to accompany demands for service charges (1) A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenants of dwelling in relation to service charges. (2) The Secretary of State may make regulations prescribing requirements as to the form and context of such summaries of rights and obligations. (3) A tenant may withhold payment of a service charge which has been demanded from him if subsection (1) is not complied with in relation to demand. (4) Where a tenant withholds a service charge under this section, any provisions of the lease relating to non-payment or late payment of service charges do not have effect in relation to the period for which he so withholds it. (5) Regulations under subsection (2) may make different provisions for different purposes. (6) Regulations under subsection (2) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. Decision 21. The Tribunal gave its decision verbally at the hearing. This written decision confirms that decision. The law states, “Section 21 B (1) A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenants of dwelling in relation to service charges.”

22. The Tribunal has no discretion in the application of Section 21 B Landlord and Tenant Act 1985, the Tribunal finds that no summary of rights and obligations accompanied the Invoice, and accordingly the sum demanded under the Invoice of 11 February 2024 are not payable. Other matters

5 23. The Applicant also applied for an order under Section 20C of the Landlord and Tenant Act 1985. Such an application gives the Tribunal the power to order that any costs incurred by the Landlord in the proceedings of this Tribunal cannot be passed onto the Tenant by way of an additional item in the service charge. The Tribunal given the decision that section 21B procedure was not followed by the Landlord makes such an order that any costs incurred by the Landlord in these proceedings cannot be sought from the Applicant by way of service charge.

24. The Applicant additionally applied under Para 5A Schedule 11 of the Commonhold and Leasehold Reform Act 2002. Such an application gives the Tribunal the power to order that any costs incurred by the Landlord in the proceedings of this Tribunal cannot be passed to the Tenant by way of an administration charge in respect of litigation costs.

25. The Tribunal also orders that the [NAME] reimburses the Applicant their hearing and application fee.

26. Should either party wish to make representations on paragraphs 23, 24 and 25 above then these should be made in writing to the Tribunal copied to the other party by the 3 January 2025.

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RIGHTS OF APPEAL 1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written Application by email to [EMAIL] to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking. 7