Automated Summary
Key Facts
This case involves a tenant's challenge to service charges for the years 2014-2017, 2019-2020 at Flat 5, Rostrevor Mansions. The Tribunal found certain service charges unreasonable, including items like Bath & Shower Sealant, Handrail Cement, Carpeting, and Scaffolding. The Tribunal allowed the tenant's application under Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002, determining that the respondents' costs in connection with the proceedings are not to be regarded as relevant costs for service charge purposes.
Issues
- The Tribunal considered the Applicant's application under Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002. The Tribunal allowed the application, determining that the Respondents' costs incurred in connection with the proceedings should not be regarded as relevant costs to be taken into account in determining the amount of any service charge or administration charge payable by the Applicant.
- The Tribunal determined the reasonableness of service charges for the years 2014, 2015, 2016, 2017, 2019, and 2020. Specific items like bath & shower sealant, handrail cement, and scaffolding were found to be unreasonable or partially unreasonable, while others like external painting were found reasonable. The Tribunal applied the principle that service charges are only payable if reasonably incurred.
Holdings
The Tribunal allowed the Applicant's application under Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002, precluding the Respondents from recovering their costs in relation to the application by way of service charge or administration charge. The Tribunal found specific service charges for 2014-2020 unreasonable and not payable, including Bath & Shower Sealant, Handrail Cement, Carpeting, Scaffolding, Electric Meter Cupboard repairs, and CCTV Camera Signs. For items with insufficient invoice breakdowns, the Tribunal applied a commonsense approximation to reduce costs. The Tribunal determined that costs incurred by the Respondents in connection with the proceedings are not to be regarded as relevant costs for service charges or administration charges.
Remedies
The Tribunal allowed the Applicant's application under Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002, which prevents the Respondents from recovering their costs in relation to the proceedings by way of service charge or administration charge.
Legal Principles
- The tribunal adopted a 'robust, commonsense approach' to resolving disputes when documentation was lacking and the sums involved were relatively modest, rather than requiring further evidence or adjourning proceedings, which was deemed proportionate and in line with the Tribunal's overriding objective.
- The tribunal recognized that the burden of proof is a last resort, not a first one, and that the tribunal's primary task is to evaluate all evidence presented, rather than relying on the adversarial notion of burden of proof.
- The tribunal has wide discretion to determine whether costs incurred by a landlord in connection with proceedings should be regarded as relevant costs for service charge purposes, with the principle being to ensure fair treatment between landlord and tenant, considering all relevant circumstances.
Precedent Name
- Conway v Jam Factory Freehold Limited
- Cannon v 38 Lambs Conduit LLP
- Tenants of Langford Court v Doren Ltd
- Arnold v Britton
- Redrow Regeneration (Barking) Ltd v Ryan Edwards
- James Scicluna v Zippy Stitch Ltd & Ors
- London Borough of Havering v Macdonald
- Daejan Investments Ltd v Benson
- The Gateway (Leeds) Management Ltd v Mrs Bahareh Naghash & Mr Iman Shamsizadeh
- SCMLLA (Freehold) Limited
- Knapper v Francis
Cited Statute
- Commonhold and Leasehold Reform Act 2002
- Leasehold Reform Housing and Urban Development Act 1993
- Landlord and Tenant Act 1985
- Tribunals, Courts and Enforcement Act 2007
Judge Name
- Mr M Ayres
- Judge A Cresswell
Passage Text
- 163. On the basis of evidence available to it, the Tribunal cannot be satisfied that it is reasonable to charge the phase 2 scaffolding invoice to the service charge account and disallows it in its total sum of £1,140.
- 185. The costs incurred by the Respondents in connection with the proceedings before the Tribunal are not to be regarded as relevant costs to be taken into account in determining the amount of the service charge payable by the Applicant in this or any other year.
- 176. The Tribunal records that the recommended standard, to be found in technical releases 03/11 (Residential Service Charge Accounts) issued by ICAEW states that Service Charge accounts should be prepared on the accruals basis. This method of accounting recognises costs in the accounts when the expense was incurred rather than when the invoice is paid.