Tribunal Determines Service Charges for Hillier Road Leaseholders

OUTCOME: Allowed in Part

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER

(RESIDENTIAL PROPERTY)

Case Reference

:

CHI/00HY/LSC/2023/0032

Property

: 64-72 [NAME] [APPELLANT], Devizes, Wiltshire [POSTCODE]

Applicant: [redacted]

Respondent: [redacted]

:

[COUNSEL], Counsel, instructed by [COMPANY].

Type of Application

: Applications for a determination of liability to pay and reasonableness of service [NAME] under section 27A of the Landlord and Tenant Act 1985

Tribunal members

:

Judge David Clarke

Michael Ayres FRICS

Michael Jenkinson

Date of Hearing: : 6 November 2023

_________________________________________________________

DETERMINATION AND STATEMENT OF REASONS

_____________________________________________

Determination

1. The Tribunal determines that for the major works, communal flooring, redecoration, and related management fee, a service charge is payable by each of the Applicants, being the year end cost of works, as follows:

In respect of 2022/23, a total of £9,365.04 comprising the following elements:

Major works: £3,455.66

Redecorations: £3,912.49

Flooring: £868.33

Management Fee (for those works): £1,029.56

[NAME] contribution: £99

In respect of 2023/24, a total of £9,940.01 comprising the following elements:

Major works: £311.67

Redecorations: £8,301.67

Management Fee (for those works): £1,076.67

[NAME] contribution: £250

2. The Tribunal makes an order under section 20C of the 1985 Act in favour of the Applicant that any costs incurred by the Respondent in connection with these proceedings are not to be regarded as relevant costs to be taken into account in determining the amount of the service charge payable by the Applicants.

3. The Tribunal also makes an order in favour of the Applicants under Paragraph 5A of Schedule 11 to the 2022 Act extinguishing any liability to pay a particular administration charge in relation to the litigation costs of the Respondent in this case.

4. This determination is subject to the Respondent repainting the door to flat 66 as soon as possible and to the satisfaction of [RESPONDENT]. It is also subject to the Respondent dealing with and removing the stain on the carpet on the landing and resolving what caused the stain, since it was unclear at the hearing what was the source of the problem. These issues are to be resolved prior to recovery of the 2023/2024 service [NAME].

Statement of Reasons

The Applications

1. This Application is made under section 27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) by all [NAME] of a property known as 64-72 [NAME] [APPELLANT], Devizes, Wiltshire for a determination of their liability to pay and reasonableness of service [NAME]. The Applicants are [NAME] [NAME] (64), [NAME] (65), [NAME] and [NAME] (66), [NAME] and [NAME] (67), [NAME] (68), [NAME] [NAME] (69), [NAME] (70), [NAME] and [NAME] (71) and [NAME] (72) (“the Applicants”).

2. The Application was made on 4 March 2023 by the [NAME] jointly and was signed by [NAME] and [NAME]. At the hearing, the primary spokespersons were [NAME] and [NAME] but all those present were able to contribute when they wished to do so. [NAME] [NAME] was unable to be present for health reasons. The Applicants sought a determination in respect of the years 2022, 2023 and 2024, but it was clarified that the reference should be to two financial years, each ending on March 31, namely 2022-2023 and 2023-2024.

3. Two further applications were included, namely an application for an order under section 20C of the 1985 Act and for an order under paragraph 5A of Schedule 11 of the Commonhold and Leasehold Reform Act 2002.

4. The Respondent was represented by Mr [COUNSEL] of Counsel. The Respondent’s solicitors, [RESPONDENT], prepared a bundle of 1018 pages, a significant proportion of which consisted of the witness statements (with many exhibits) of employees of the Respondent, namely [RESPONDENT], a [NAME], [RESPONDENT], head of service [NAME], [NAME], a [NAME] and [NAME], a customer [NAME] officer.

5. Directions were issued on two occasions, namely on 21 June 2023 and, after a Case Management Conference (“CMC”), on 19 July 2023. At the CMC, the Applicants confirmed that their challenge to the service [NAME] in 2022-23 and in 2023-24 related to five items, namely their general liability for major works undertaken and now recently completed, the redecoration undertaken as part of those major works, the communal flooring provided, and the management fees charged during those works; and in relation to the historic [NAME] contributions.

6. No provision was made for an inspection at the CMC. The Tribunal determined on receipt of the bundle of papers that it did not consider an inspection was required.

Relevant facts

7. The Application covers a single building comprising 9 flats numbered 64-72 [NAME] [APPELLANT], Devizes Wiltshire (“the Building”). The Applicants are the long [NAME] of the flats contained within the Building. Five of the flats are held under shared ownership, the remaining four on full leasehold. Seven flats are two bedroom and two flats have only one bedroom. Nothing turns on either the different bases of ownership or the size of the flats. Some of the current [NAME] were first purchasers when the Building was developed; others have purchased recently.

8. The Building was part of a former barracks and was redeveloped in 2005-7 into residential accommodation. The Respondent, then [COMPANY], purchased the freehold in 2007 and was subsequently merged with two other housing associations into [NAME].

9. At the heart of the Applicants argument, as presented in their Statement of Case, is that when the [COMPANY] were first sold in 2007, a member of the staff of the Respondent (then [COMPANY]) ‘categorically told’ the purchasers that they would only be responsible for the upkeep and maintenance costs associated with the interior of their flat while the repair and upkeep of the exterior would be the responsibility of [NAME]. Unfortunately for the Applicants, who said that this was the basis on which they believed that they were not liable for the cost of major works to the Building, they have no written record or confirmation of this conversation and the Respondent has no record either. The person alleged to have made this representation no longer works for the Respondent.

10. In 2013, the Respondent undertook communal and external redecoration. Only one complaint (from Mr [NAME]) about the quality of painting to the windows was received. These works were preceded by a notice under section 20 of the 1985 Act dated 7 May 2013 initiating the usual consultation process with the then [NAME]. However, though the costs of the 2013 works were added to the accounts of the [NAME] in May 2015, these costs were swiftly removed in June 2015. It was explained to the Tribunal by [NAME] that they were removed because of the realisation of the oversight of the Respondent of not invoicing the Applicants within 18 months of incurring those costs as required by section 20B of the 1985 Act. It does not appear that either the adding of these costs to [NAME] accounts or the subsequent removal were made known to all the [NAME]. The Respondent did produce in evidence, through [RESPONDENT], a letter dated 3 July 2015 to Mr [NAME]. In response to his complaint, he was informed that ‘you will not be charged for the works that have already taken place due to an oversight on our part in relation to timings of invoicing’. But in the context of a response to a complaint about the inadequate painting of his windows, this paragraph was open to being interpreted as relating to the previous work to his windows alone.

11. The [NAME] as a whole did not apparently receive any written explanation of why they were not charged for the 2013 works. However, [NAME] produced in evidence minutes of a meeting dated 28 September 2015 with only three flats represented (one of whom has since sold) where there is note that the Respondent’s representative explained that the reason that ‘past cyclical redecorations were not charged is due to legislation’ requiring [NAME] to charge within 18 months. The reason for such a long period between the works being done and consideration of the complaint and charging for the work was not explained to the Tribunal.

12. Further remedial works to the Building were carried out in 2016. For reasons that were again not disclosed, the Respondent did not fully consult in advance of these works as required by section 20 of the Act. The Respondent then ‘took the view’ not to charge at all for these works. It presumably decided not to apply to the First-tier Tribunal for dispensation under section 20ZA of the 1985 Act. It also chose not to charge the sum of £250 per flat, permitted by the 1985 Act when consultation has not taken place, again it is said by omitting to invoice within the specified period.

13. [NAME] noted that these failures resulted in a ‘windfall’ to the Applicants (but not at all in fact to those who have purchased since 2016) though it was not seen as a windfall by the longer term residents since the Applicants claimed that they had reason to believe that they were not liable anyway.

14. In 2019 and 2020 respectively, [NAME] [NAME] purchased Flat 64 and [NAME] and [NAME] purchased flat 67. During the conveyancing process, the Respondent completed its section of the Leasehold Enquiries Form (“LPE”). In response to question 4.9 – “Is any increase in the Service Charge over 10% or £100, which ever is the greater, anticipated in the next two years?”. The answer given is no. The previous question, 4.8., asked “Are any section 20 works proposed to the Property?”. The answer was that they were anticipated and the ‘drop down’ box gave details.

15. On 16 March 2022, the Respondent served a section 20 notice on each of the Respondents in relation to the major works which the Applicants dispute in this case. The validity of the notice is not disputed and the evidence of the tendering process, given by [NAME], was not challenged. Following the notice, (no observations from any of the Applicants was received) the Respondent sought quotations for the works specified in the notice. Two responses were submitted, both from contractors who hold Qualifying Long Term Agreements with the Respondent. [NAME] was the firm selected on the basis of the cost but also on the basis that they were currently working in Wiltshire.

16. The Applicants did raise in their paperwork that the works undertaken and now completed straddled two financial years. They also noted that the costs had increased, largely because many more windows had been replaced or repaired than had been envisaged. Mr [NAME] correctly identified in his skeleton argument that the statutory notice requirements under section 20 relate to the planned works and not to the financial years into which the completion of the works is done. Moreover, at the hearing, it was pointed out the specification of the works included a cost for replacement of the timber window frames where necessary - it was just the exact number that had to await the erection of the scaffolding for proper assessment. The Applicants did not thereafter press this point at the hearing.

17. Work commenced on 6 October 2022 and after the scaffolding was erected. [NAME] was able to assess the work required to some of the timber windows prior to being repainted. In the end, eleven windows needed replacing or major repair which increased the overall cost. A small area of felt flat roofing cover was identified as nearing the end of its life and starting to leak and stain the ceiling of the rear stairwell. It was decided to replace this as additional work while the scaffolding was in position.

18. By the date of the hearing, the works had been completed and the ‘snagging’ list of matters that required attention completed (with two exceptions referred to below).

The Leases

19. As is usual in these cases, the Tribunal was supplied with a copy of just one of the nine leases, namely the Lease of Flat 68 (“the Lease”), and the Tribunal was told that the terms of the leases of the other eight flats were in identical form. The Lease is in a form found widely in blocks of flats containing long residential leases. The important features for the purposes of this decision are as follows.

(i) The Tenant covenants to pay a service charge (clauses 3.2.2 and 7.2).

(ii) The service charge amount for each flat is one-ninth of the costs to be taken into account in determining the Service Charge (clauses 7.1 and 7.4).

(iii) There is provision for a reserve (sinking) fund (clause 7.4.2).

(iv) The service charge includes all those costs incurred by the Landlord in performing its covenants to insure, maintain and redecorate the Building and all external parts thereof . . “ (clauses 5.2-5.4).

(v) The costs include the costs of employing persons in management and maintenance of the Building (clauses 7.5.3).

20. It is worth setting out the exact wording of part of clause 5.3, one of the Landlord’s covenants:

“That (subject to payment of the rent and service charge . . .) the Landlord shall maintain repair redecorate renew . . the roof foundations and main structure of the Building . . .”

The arguments on the issues

21. It will be convenient to set out the arguments and submissions of the parties on each issue in turn, dealing with the five areas of dispute identified in the CMC. The first area, the major works, included a number of separate matters relating to those works. In addition to the general issue of liability to pay, it will be also convenient to summarise the views and evidence relating to such additional matters, some of which were raised more specifically at the hearing, such as the roof repairs undertaken as part of the major works and, more generally, the complaints about communication issues.

A. Major works: (i) Liability to pay the service charge.

22. The [NAME] claim of the Applicants in the Application dated 4 March 2023, and later in the position statement prepared, was that the Applicants were not liable for the costs of the major works to the exterior of the Building because they had been led to believe that they were not responsible for exterior decoration and repairs. They relied on three matters, outlined in the factual summary above. These were that residents purchasing in 2007 were told by a representative of the Respondent that they would not be liable for such exterior works; that no [NAME] had been made previously for work undertaken in 2013 and 2016; and that two residents who had purchased in 2020 and 2021 had been told that service [NAME] would not increase beyond 10% or £100 for a period of two years.

23. The Respondent, through the Statement of Case and detailed skeleton argument compiled by Mr [NAME], submitted that the Applicants were liable to pay for the major works. The [NAME] point is that the Lease so provides. Clause 5.3, set out above, makes it clear that the covenant by the Landlord to repair the exterior is subject to the [NAME] paying their share of the service charge.

24. The provisions in the Lease could only be supplanted by the clearest of evidence and the Respondent submitted that there was no such clear evidence presented by the Applicants. The oral assurance by a representative of the Respondent in 2007 that they would not be liable for such exterior works cannot override the Lease terms and cannot amount to an estoppel on which the Applicants can rely. In any event, even if properly evidenced as an unequivocal promise or assurance, it could only assist the person or persons to whom it was made. Though no [NAME] were made in 2013 and 2016 for works undertaken, the Respondent produced evidence in explanation and there was no claim by the Applicants of any representation being given by the Respondent about the future. As for the responses to the LPE questions to [NAME] [NAME], and to [NAME] and [RESPONDENT] (see paragraph 14 above), the Respondent submitted that, at its highest, this submission could only assist the two flats for which LPEs exist but that, in any event, the answers in the LPE do not amount to an estoppel. It was submitted that they were not clear and unequivocal and were capable of more than one interpretation. (The Tribunal noted that it appeared that the further details supplied in the drop box in 4.8 did not get reproduced if and when the form was printed off). The LPE replies by the Respondent also made it clear that some section 20 works were anticipated. In any event, the representation of ‘not more that 10% or £100’ was limited to a two-year period that expired on 13 September 2022 in respect of number 64 and 6 April 2023 for number 67.

25. It was clear to the Tribunal at the hearing that all of the Applicants felt strongly on this issue. But by the end of the day, although the Applicants did not formally withdraw their submission, it was clear that they were reluctantly accepting that in legal terms their argument could not be sustained.

A. Major works; (ii) Historic neglect

26. In the Application, the Applicants questioned why the Respondents had not followed a six-year cycle of maintenance. They submitted that this resulted in more work being needed for the major works just completed so the amount now sought from them would be less had issues had been dealt with earlier. They also said that work that was needed was only done after a lot of pressure. The only evidence submitted in relation to that submission related to the windows. The Tribunal was told that eleven of the timber windows had rotted and had to be replaced. Some photos taken before the recent work showed windows clearly in need of replacement.

27. The Respondent denied any historic neglect. Mr [RESPONDENT] submitted that it is well established that historic neglect, even if shown, does not touch on the question of whether the costs were reasonably incurred: [COMPANY] v Griffin [2014] UKUT 206. But in any event, he said, correctly, that the Lease does not specifically require maintenance every six years; and, as the Applicants accepted, works had been undertaken in 2013, six years after the conversion of the property, again in 2016 and then in 2022-3, again after a period of six years.

A. Major works; (iii) Roof repairs

28. The major works included some repair to the roofing of the Building. These were added to the decision to undertake decorative works and repairs as necessary to the windows after a drone survey in 2021 identified that works were required (there had been some temporary repairs before this date). It was convenient and cost effective to do those repairs at the same time. There was a possible suggestion in the papers that the Applicants considered a drone survey was an unnecessary extra expense but this was not pursued at the hearing and there was no evidence to support any such contention. The Applicants did not question the necessity for the repairs that were undertaken but only raised one specific issue relating to the quality of the works. The specification for the works mentioned the requirement to meet ‘British Standards’ and the Applicants questioned whether the decision not to mechanically fix the replacement roof tiles were in breach of those standards.

29. At the hearing, and only previously in the last minute ‘skeleton argument’ submitted by the Applicants, there were some complaints about the standard of the completed roof works on the basis of two photographs supplied in the Respondent’s witness statements, one to a ridge mitre said to show poor quality work, and another to a flash band where it was not clear if the band had been properly replaced. This was briefly supported at the hearing by [NAME], who said he worked professionally as a roofer and considered the completed works of a poor quality, but without giving further detail.

30. The Respondent explained that the decision not to mechanically fix tiles was taken on professional advice and the specification was for replacement of ridge tiles ‘where necessary’ and these tiles had not originally been mechanically fixed. However, in any event after the complaint, the tiles were mechanically fixed. It was not accepted that any of the work was not of a reasonable standard and the Applicants had not raised the issue of the work not being of a reasonable standard in their Application.

A. Major works; (iv) Communication issues

31. The Applicants paperwork includes a series of complaints about poor communication to the residents from the Respondent. A considerable amount of correspondence by both letter and emails were included in the bundle. These show that the Applicants did have significant concerns but they also demonstrate that the Respondent, through various employees, did respond to them, sometimes diligently, in other cases eventually. In particular, [NAME], a recently appointed customer [NAME] officer, gave a detailed witness statement exhibiting all the responses made. The Respondent denied that it had demonstrated poor communication to the Applicants.

32. While the Tribunal accepts that the Applicants have some strongly held views about the communication and the quality of the information supplied, it is satisfied that there is nothing in the details of the communications between the parties that can have any impact on the issue it has to determine, namely whether the service charge is payable and whether the amount demanded is reasonable.

B. Redecoration

33. The redecoration of the Building comprised a major part of the works undertaken but was listed as a separate item for consideration at the CMC. There were three submissions of the Applicants relating to redecoration:

1. The schedule of works included an item to ‘sheet up all communal areas’ at a cost of £6250 but this had not been done and this amount should be excluded from the service charge costs.

2. The Applicants believed that inferior paint had been used instead of the quality [NAME] and Crown paints specified.

3. The quality of decoration was poor to the windows and in the internal communal areas.

34. On the papers, it seemed that the Applicants had a strong case in respect of the sum of £6,250. It was clear that sheets had not been used (after the first day) to cover the carpet in the communal areas – it was explained that the sheets when first used were a slip hazard and since the old flooring was to be replaced it was better to allow drips of paint to occur. The sum seemed excessive in any event. But at the hearing, a close examination of the specification revealed the problem was in the way the spreadsheet had been compiled. The words ‘Sheet up all communal areas’ were followed by a comma before the figure of £6250 in the next column. However, that sum also related to all the painting internally of the communal areas – six further lines on the spreadsheet. It was therefore made clear at the hearing that the sum of £6,250 did not relate to the provision of sheeting alone.

35. The Applicants felt very strongly that wrong paint had been used. The specified paint was [NAME] for the exterior and Crown for the interior. On 20 February 2023, a photograph was sent to [NAME] of an opened tin of Leyland Trade acrylic primer undercoat in the communal landing area and another opened tin of paint on the exterior scaffolding was seen. The Applicants said that they were concerned that there was poor quality paint used and they should not pay for what had been done. None of the Applicants actually saw the paint from those tins being applied. [NAME] testified that the paint tins had been brought onto the site for the carpenter to take away and had been left overnight. But as a result of the complaint, the contractor, [NAME], was informed and a report undertaken to ascertain the quality of the finished painting by a [NAME] representative. This report was in the bundle as an exhibit. That report indicates that it is quite hard to test that paint once applied is [NAME]; but comments further that timber is often delivered to the site pre-primed and he would be happy if a further primer undercoat had been added prior to painting. In any event, the conclusion was that the quality of the work and finish was of a good commercial standard.

36. As to the final quality of the decoration, it became apparent that only one of the complaints that had been put to the Respondent remained outstanding. The door to Mr [RESPONDENT] flat had been ‘painted shut’. This was explained as meaning ‘painted while shut’ so that when the door was opened a strip round the door was left unpainted. Mr [RESPONDENT] for the Respondent undertook to the Tribunal that this would be remedied as soon as possible without further cost. There was in the bundle various photographs of some poor painting to various windows but it is the understanding of the Tribunal that such defects have been rectified.

C. Communal Flooring

37. The Applicants submitted to the CMC that the newly fitted communal carpets were not fit for purpose. They included in their paperwork photographs of the paint damage to the old carpeting and some of the new carpet not properly fitted. They also said at the hearing that staining has appeared. The Respondent replied that the photograph of the newly laid carpet was taken before the stair nosings had been fitted and that the new carpet is a high-grade, high-wearing Supacord.

38. At the hearing, the outstanding issue was the staining. The Applicants stated that there had been a stain on the landing area on the old carpet and the stain had reappeared when the new carpet was laid. In response to a question, [NAME] said he had taken a look at the stain and he will try to have it removed by cleaning. For the Applicants, it was said that the stain was soft and spongy and had come through the previous carpet in the same way.

D. Management Fee.

39. The Applicants submitted that the 15% management fee on the overall costs of the major works were not appropriate or proportionate. They consider that the ‘actual input’ from the Respondent was not good and they were unable to trust the Respondent to oversee the work. They cite the many problems that needed to be resolved and the number of issues related to ‘snagging’ at completion of the works.

40. The Respondent set out the range of tasks covered by the 15% fee and noted that the principle of charging a management fee for overhead costs is well established – London Borough of Southwark v Paul [2013] UKUT 375. [NAME] pointed to the evidence of [NAME] who provided evidence of the work involved in managing the project. The challenge to the standard of management work was not accepted.

E. [NAME]

41. The Applicants contended that it was now unreasonable to charge them for the major works because the costs to them now would be very much less had the [NAME] required by the Lease been operated in an effective and realistic way between 2007 and the present day. If that had been done then most or a majority of the costs per flat of over £19,000 could have been met from the [NAME].

42. It was disclosed at the hearing by [NAME] that the [NAME] contributions over the last 15 years had been about £60 per flat until 2018 and then an increase to £87 and then to £99. The Respondent admitted that it had had a blanket reserve fund approach across all of its [COMPANY] rather than assessing the needs of each separately. In effect, the Respondent has admitted that the sums previously requested were too low since it is now asking for £250 per flat in 2023-24.

43. Moreover, it has now completed a 30-year maintenance plan for the Building and concluded that the [NAME] contribution needs to be at £1,475 per year. The Tribunal notes with some surprise that this would result in the [NAME] increasing by £13,275 every year; and, as the residents have to pay for the works that have just been done, it may be unreasonable to plan for such a significant increase in such a short period.

44. Nevertheless, Mr [NAME] submitted that the adequacy or otherwise of the amount of historic [NAME] contributions does not impact in any way on the question of whether the costs of the works were reasonably incurred. He also correctly noted that an annual reserve fund contribution of more than £250 per annum does not require statutory consultation, in the circumstances of the next few years - [ADDRESS] (1998) [COMPANY] v Vejani [2016] UKUT 365.

Determination

45. The Applicants came to this Tribunal and presented some very genuine grievances. The Tribunal is satisfied that in the past the Building was not managed well by the Respondent. For a [COMPANY] with a large stock of [COMPANY], it is surprising that it failed to complete the section 20 consultation process properly in 2013; and it then astonishingly repeated this failure in 2016 and could not even get right the collection of £250 per flat that the law permitted. It was aware, certainly by 2015, that the [NAME] were under the impression that they did not have to pay for major external repairs yet the only evidence they could produce that they sought to correct that impression was minutes of the meeting produced in evidence by [NAME] in September 2015 (with only three flats represented) where the Respondent’s representative only explained that the reason that past cyclical redecorations were not charged was due to legislation requiring [NAME] to charge within 18 months. It was only in 2022 that the Respondent asked its solicitor to write to all [NAME] explaining how the leases required them to contribute to the repairs and decoration to the exterior and communal areas.

46. The Applicants also have the right to be aggrieved about the approach of the Respondent to the [NAME] with annual contributions not being reviewed and not increased for 11 years and then remaining at a modest sum until 2023/24. As was said at the hearing, had the [NAME] been contributing realistic sums, they would now face a much lower charge; and those who have purchased recently would have had the benefit of contributions from previous owners.

47. [NAME] in her detailed witness statement sets out the details of the communications with the Applicants. It is not necessary to rehearse any of the detail. The Respondent certainly did respond to complaints and issues raised and has records about doing so. Yet until recently, it is clear to the Tribunal that communications were not good enough. [NAME] bears no responsibility for any shortcomings – the Applicants indicated at the hearing that relations and communications have improved considerably since she was appointed less than two years ago. But the Tribunal understands the Applicants previous frustrations. But the communication issues have no relevance to the issues the Tribunal has to decide.

48. The justified complaints about some of the decoration as it occurred have been put right by the Respondent – with the exception of repainting the door to number 66 which was painted when closed. That must be done properly. The Tribunal did have concerns about the Respondent’s explanation for the open tins of the wrong paint on the scaffolding and in the hallway. The suggestion that it was brought onto the site by a carpenter is possible but seems improbable. However, the evidence that it was used instead of the correct paint has not been found. As an undercoat it was more likely that it was being used before painting with a topcoat and the [NAME] report suggests that if this was the case it was good practice.

49. The Respondent indicated through [RESPONDENT] that it would deal with and remove the stain on the carpet on the landing. It will need to resolving what caused the stain, since it was unclear at the hearing what was the source of the problem.

50. The management fee complained about is the 15% of the total cost of the major works. Such a charge is well established – London Borough of Southwark v Paul [2013] UKUT 375. The percentage of 15% is reasonable.

51. As to the inadequacy of the [NAME] contributions, the Respondent is correct in its submission that the adequacy or otherwise of the amount of historic [NAME] contributions does not impact in any way on the question of whether the costs of the necessary works now being undertaken were reasonably incurred.

52. The Tribunal upholds all the legal submissions of the Respondent. The Tribunal therefore determines that for the major works, communal flooring redecoration, and related management fee, a service charge is payable by each of the Applicants, being the year end cost of works, as follows:

Major works: £3,455.66

Redecorations: £3,912.49

Flooring: £868.33

Management Fee (for those works): £1,029.56

[NAME] contribution: £99

Major works: £311.67

Redecorations: £8,301.67

Management Fee (for those works): £1,076.67

[NAME] contribution: £250

53. This determination is subject to the Respondent repainting the door to flat 66 as soon as possible and to the satisfaction of [RESPONDENT]. It is also subject to the Respondent dealing with and removing the stain on the carpet on the landing and resolving what caused the stain, since it was unclear at the hearing what was the source of the problem. These remedies to the two outstanding matters arising for the major works should be resolved prior to recovery of the 2023/2024 service [NAME].

54. The Respondent indicated at the outset that it did not wish to recover its costs of this Application either directly from individual [NAME] or through the service charge. It therefore argued that orders in relation to costs are not required. The Tribunal considers that, since the Respondent has indicated that costs are not being claimed, it is better that this result is embodied in formal orders. In doing so, the Tribunal is not basing its decision on any shortcomings of the Respondent.

55. The Tribunal therefore makes an order under section 20C of the 1985 Act in favour of the Applicant that any costs incurred by the Respondent in connection with these proceedings are not to be regarded as relevant costs to be taken into account in determining the amount of the service charge payable by the Applicants.

56. The Tribunal also makes an order in favour of the Applicants under Paragraph 5A of Schedule 11 to the 2022 Act extinguishing any liability to pay a particular administration charge in relation to the litigation costs of the Respondent in this case.

Closing Remarks

57. For the Applicants, the result of the case is that they find themselves liable in full for the service [NAME] which the Tribunal determines have been lawfully made. They are liable under the terms of the Lease and the sums have been incurred properly and are not unreasonable.

58. The Respondent indicated that it will promptly discuss with each of the [NAME] the mechanisms that they have under their Discretionary Payment Application process. In view of the past history of this matter, the Tribunal hopes that the Respondent will be as helpful and generous as possible in the terms offered to enable these [NAME] to afford the payments necessary.

Postscript – Flat 69 – [NAME]

59. [NAME] was one of two Applicants not to appear at the hearing. It was indicated at the start of the hearing that she was too ill to attend. She is the leaseholder of Flat 69, a ground floor property which is the only flat not to use the communal hallway. It was clear from the papers that until 2018-19 her [NAME] contributions were levied at a lower rate than for the other eight flats.

60. It transpired after the hearing was concluded that [NAME] had written to the Tribunal office objecting to the service [NAME] on the ground that she should not be charged. The papers were sent to the wrong address for the Tribunal; were returned to her eventually and reposted by her on 1 November but were not received in the office until 6 November, the day of the hearing in Bath.

61. In her submission, [NAME] says that flat 69 is a ‘lean to’ and completely separated from the other eight flats. It has no use of the communal facilities. She was not charged for any communal facilities for over ten years after her purchase in 2007. She refers to [NAME] witness statement which sets out the way that [NAME] were dealt with differently for Flat 69 prior to 2018/19. She records that the ‘block was treated as one’ after 2017/18 but she was given no reason for the change. She says that her service [NAME] since 2018 until this case have only been for services that she receives.

62. She also indicated that some painting on her property had not been completed.

63. If the Tribunal had received this submission in time, it would have called for a copy of the lease of flat 69 to ascertain if it requires [NAME] [NAME] to pay the same service charge as the other eight flats. The Tribunal is not now able to act as the hearing was concluded before [NAME]’s letter was brought to its attention.

64. In the circumstances, the Tribunal hopes that the Respondent might ask its solicitor to check the terms of the lease of flat 69 and to ask the solicitor to write to [COUNSEL] with a full explanation. If it does require her to pay one ninth of the complete service charge (as it may well do) then an explanation will help her to understand why she has to pay.

Right of Appeal

65. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the [NAME] office which has been dealing with the case ([EMAIL] ). 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.

66. 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.

67. 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 that the party who is making the application for permission to appeal is seeking.

21 November 2023