Tenant Successfully Challenges Unreasonable Service Charges

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : LON/00AN/LSC/2024/0123 Property : Flat 5, Q Block, [NAME], [ADDRESS] [POSTCODE] Applicant: [redacted] Respondent : [redacted] : N/A 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 : Judge Tagliavini Mrs S Redmond MRICS Venue : 10 [ADDRESS] [POSTCODE]

Date of decision :

25 February 2025 DECISION

The tribunal’s summary decision

(1) The tribunal determines that the difference of £560.43 between the estimated

and actual block electricity costs is unreasonable and not payable by the

applicant.

(2) The tribunal makes an order requiring the respondent to reimburse the

applicant the £100 [NAME] fee paid with 14 days of the date of this

decision being sent to the parties.

The [NAME]

1. This is an [NAME] made pursuant to s.27A of the Landlord and Tenant Act

1985 in which the applicant seeks the tribunal’s determination as to the

reasonableness of a balancing charge of £611.40 for the service charge year

ended 31 March 2023.

Background

2. In support of the [NAME] the tenant provided supporting documentation

establishing the [NAME] of the balancing charge to his service charge

account. The subject property at Flat 5, Q Block, [NAME], [ADDRESS] [POSTCODE] (‘the flat’) is a 2 bedroom flat in a purpose built block of 10 flats on 4 floors.

3. The applicant holds a leasehold interest subject to an assignment dated 22

August 2016 of the lease dated 14 March 2008 granting a term of 125 years with effect from 1st January 2005.

4. Directions were given by the tribunal in which it was directed a paper

determination would be made. Subsequently, the respondent was debarred

from defending the [NAME] by an order of the tribunal dated 27 January

2025. No [NAME] to set this decision aside was made by the respondent.

5. Therefore, the [NAME] was determined by the tribunal on the basis of the

documents provided by the applicant only.

6. The applicant asserted that the balancing charge of £611.40 for service charges

in 2022/2023 represent electricity charges which are disproportionate to the

size of the block which uses electricity to light its communal areas only.

Therefore, even when taking into account the increase in electricity costs the

balancing charge is excessive and unreasonable.

7. The tribunal was provided with a copy of a letter dated 13 October 2023

informing the applicant of the actual service charges for the year 1 April 2022

to 31 March 2023 which showed a balancing charge due of £611.40. This

statement also showed an estimate charge for block electricity charges of

£60.00 and an actual charge of £620.43 leaving a difference of £560.43. There were a few other differences in estimated and actual costs for a number of

other items of minimal value, with the exception of £111.92 actual costs of

bulk refuse disposal as against the estimated costs of £10.64. Although this

specific item was not challenged by the applicant.

The tribunal’s reasons

8. The applicant’s lease requires the applicant to contribute in the specified

percentage to the sum of The Estate Service Charge and the Building Service

Charge. The lease provides for the landlord to amend estimated service charges to reflect the actual costs incurred including the costs of services e.g. electricity provided to the Estate, the Building and the Common Parts.

9. However, in the absence of any explanation by the respondent for the

substantial increase in block electricity costs, the tribunal determines the excess of £560.43 is unreasonable and is not payable by the applicant.

10. The tribunal consider it appropriate to and makes an order requiring the

respondent to reimburse the applicant with the cost (£100) of [NAME] the

[NAME] within 14 days of this decision being sent to the parties.

Name: Judge Tagliavini

Date: 25 February 2025

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] 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).