section 27a
📖 What is section 27a? Meaning and definition
Section 27A of the Landlord and Tenant Act 1985 is a legal provision that enables either a landlord or a tenant to apply to a First-tier Tribunal (Property Chamber) for a determination regarding service charges. This application seeks a decision on whether a service charge is actually payable, by whom it is payable, to whom it is payable, and the amount that is reasonably payable. It also covers the date by which such a charge should be paid.
In practice, this section is frequently used when there is a dispute over the reasonableness of service charges, particularly those related to major works on a property. For example, if a landlord carries out significant repairs or improvements and then demands a service charge from the leaseholders, and the leaseholders believe the cost is too high or the works were unnecessary, they can apply under Section 27A for the tribunal to review the matter.
The tribunal's role is to assess the evidence presented by both parties, which often includes detailed bundles of documents. They will then make a determination on the disputed service charges. This determination is legally binding and clarifies the financial obligations of the parties involved, ensuring fairness in the payment of service charges for shared services or major works at a property.
The cases show that these applications are common for reviewing the reasonableness of service charges for major works, with the tribunal determining the payable sum. The hearings can be conducted remotely, and the tribunal's decision will set out the amounts payable and any other relevant orders.
📋 Requirements
- An application must be made for the determination of liability to pay service charges.
- The application must relate to service charges under the Landlord and Tenant Act 1985.
- There must be a dispute or need for determination regarding the payable amount or the reasonableness of charges, often concerning major works.
📝 Procedure
- An application is submitted to the First-tier Tribunal (Property Chamber).
- The tribunal considers evidence presented by both the applicant (e.g., a tenant or landlord) and the respondent.
- A hearing is held, which may be remote (e.g., video or telephone), where parties can present their case.
- The tribunal makes a determination on the liability to pay service charges and the reasonable sum payable.
- The tribunal issues a decision outlining its findings and any orders, such as the amount to be paid and by when.
💡 Examples
- A group of leaseholders applies to the tribunal under Section 27A because they believe the £341,326.02 demanded by their landlord for major works on their building is an unreasonable sum.
- A landlord seeks a determination from the tribunal to confirm that the service charges they are requesting from tenants for recent repairs are indeed payable and reasonable.
- Tenants dispute a bill for £10,146.09 for major works, and the tribunal uses Section 27A to decide if this amount is actually payable by them.
- The tribunal reviews a landlord's service charge demands for a property, determining the liability to pay under Section 27A after considering extensive documentation from both sides.
📚 Legal basis
- Landlord and Tenant Act 1985
❓ Frequently asked questions
What kind of charges can a tribunal determine under Section 27A?
The tribunal can determine the liability to pay service charges, including those for major works, and assess whether the amount requested is reasonable. This covers who pays, to whom, how much, and when.
Can a landlord also use Section 27A, or is it just for tenants?
Both landlords and tenants can make an application under Section 27A. A landlord might use it to get a tribunal determination confirming the reasonableness and payability of service charges they have demanded.
What happens at a Section 27A hearing?
At a Section 27A hearing, the tribunal will review all submitted documents and listen to arguments from both sides. The hearing can be held remotely, and the tribunal will then issue a formal decision.
What does 'determination of the liability to pay' mean?
This means the tribunal will decide if a service charge is legally owed, by whom, to whom, and the exact amount that is fair and reasonable to pay, especially if there's a disagreement about it.
Is the tribunal's decision under Section 27A legally binding?
Yes, the tribunal's decision on a Section 27A application is legally binding on the parties involved, meaning they must abide by the outcome regarding the service charges.
What if I disagree with the tribunal's decision?
If you disagree with the tribunal's decision, you may have grounds to appeal, though specific rules and time limits apply. It is advisable to seek advice from a qualified solicitor if you are considering an appeal.